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Tight oil and shale gas –global implicationsWashington, March 2013Christof Rühl, Chief Economist, BP
© BP 2012
Tight oil and shale gas: global implications
Global energy trendsGlobal energy trends
- Characteristics
- Implications
© BP 2013Energy Outlook 2030
Population, income and energy growth
128 100
BillionPopulation GDP
Trillion $2011 PPP Billion toePrimary energy
9
12 OECDnon-OECD
6
8 OECDNon-OECD
75
100 OECDNon-OECD
64 50
0
3
0
2
0
25
© BP 2013
01990 2010 2030
01990 2010 2030
01990 2010 2030
Energy Outlook 2030
Industrialisation drives energy growth
Billion toe
18 18
By primary use By fuelBy regionBillion toe Billion toe
18
12
15
18
12
15
18
P 12
15
18
HydroNuclear
Renew.*
Non-OECD6
9
12
Non-OECD
6
9
12 Power generation Coal
GIndustry 6
9
12Coal
Gas
OECD
0
3
6
OECD
0
3
6
OtherTransport Oil
GasIndustry
0
3
6
Oil
Gas
© BP 2013Energy Outlook 2030
01990 2010 2030
01990 2010 2030 1990 2010 2030
*Includes biofuels
Fuel shares and energy pricesShares of world primary energy
50%
Energy prices$2011/boe
40%
50% Oil
Coal80
100
120 Oil - BrentGas - basketCoal - basket
20%
30%
Gas 40
60
80
0%
10% HydroNuclear Renewables* 0
20
40
© BP 2013Energy Outlook 2030
0%1965 1980 1995 2010 2025
*Includes biofuels1965 1980 1995 2010
Energy efficiency improvements
0 5
Energy intensity by regionToe per thousand $2011 GDP (PPP)
20050
Energy and GDPBillion toe Trillion $2011 (PPP)
0.4
0.5
China
US
150
200
40
50
0.2
0.3100
20
30
GDP (RHS)
0.0
0.1 WorldEU*
0
50
0
10Energy
© BP 2013Energy Outlook 2030
1870 1890 1910 1930 1950 1970 1990 2010 2030 1970 1990 2010 2030*Euro4 (France, Italy, Germany, UK) pre-1970
Energy supply growth
17
Demand SupplyBillion toe
16
17
NuclearHydro
Renew.*2030 level
14
15
Other
12
13
2011 OECD Non 2011 Oil Natural Coal Non
TightOther
Shale
© BP 2013
2011 OECD Non-OECD
2011 Oil Natural gas
Coal Non-fossil
Energy Outlook 2030
*Includes biofuels
Tight oil and shale gas: global implications
Global energy trendsGlobal energy trends
- Characteristics
- Implications
© BP 2013Energy Outlook 2030
Tight oil and shale gas: resources and production
60Billion toe
Current resources Production in 2030
0 9Billion toe
40
60 GasOil
0.6
0.9
0
20
0.0
0.3
0
sia
Pac
ific
. Am
eric
a
S. &
C.
Am
eric
a
Afri
ca
Eur
ope
&
Eur
asia
ddle
Eas
t 0.0
sia
Pac
ific
. Am
eric
a
S. &
C.
Am
eric
a
Afri
ca
Eur
ope
&
Eur
asia
ddle
Eas
t
© BP 2013
As N Mi
Energy Outlook 2030
As N Mi
Resources data © OECD/IEA 2012
US tight oil and shale gas: infrastructure requirements
Onshore oil & gas rigs 2011Thousands
Oil wells drilled and output
515
Mb/d
2 0
Thousands
4
5
12
15 2012* 20112010 Output (RHS)1.5
2.0
2
3
6
9
0.5
1.0
0
1
0
30.0
© BP 2013
Bakken Canada Colombia
Energy Outlook 2030
*Annualised from 1Q-3Q data
Global supply growth and tight oil
10%10
Liquids supply by type
45%105
Mb/dTight oil output
% of totalMb/d
8%
10%
8
10 ChinaRussiaS. AmericaN America
45%
75
90
105OPEC NGLs
OPEC crude
OPEC share (RHS)% of total
(RHS)
4%
6%
4
6N. America
45
60 Biofuels
Oil sands
0%
2%
0
2
30%0
15
30 Tight oil
Other non-OPECNGLs
© BP 2013
%2000 2010 2020 2030
%1990 2000 2010 2020 2030
Energy Outlook 2030
Global supply growth and shale gas
Bcf/dGas production by type and region Shale gas production
Bcf/d
400
500 Non-OECD otherNon-OECD shaleOECD shaleOECD th 12%
18%
60
80 RoWChinaEurope & EurasiaC d & M i
200
300 OECD other
6%
12%
40
Canada & MexicoUS
0
100
0%
6%
0
20 % of total (RHS)
© BP 2013Energy Outlook 2030
1990 2000 2010 2020 20300%0
1990 2000 2010 2020 2030
Tight oil and shale gas: global implications
Global energy trendsGlobal energy trends
- Characteristics
- Implications
© BP 2013Energy Outlook 2030
Unconventional oil and the call on OPEC
369
Mb/d
Call on OPEC & spare capacityMb/d
Unconventionals share of net global supply growth
100%
33
36
6
9 Spare capacityCall on OPEC (RHS)
75%
100% Biofuels
Oil sands
30
33
3
6
50%
Tight oil
27
30
0
3
0%
25%
© BP 2013
2000 2010 2020 20300%
2000-10 2010-20 2020-30
Energy Outlook 2030
Gas trade and market integration
20%80
Bcf/dLNG exports LNG diversification
10
15%
20%
60
80
% f t t l
8
10 Suppliers per importerCustomers per exporter
10%40
% of total consumption
(RHS)4
6
0%
5%
0
20LNG
0
2
© BP 2013Energy Outlook 2030
0%01990 2000 2010 2020 2030 1991 1996 2001 2006 2011
Tight oil and shale gas uncertaintiesShare of global supply growthRange of tight oil forecasts
(excludes NGLs)Mb/d Bcf/d
Range of shale gas forecasts
8
10 RangeBP
50%
75% Shale gasTight oil
80
100
120 RangeBP
4
6
25%
50%
40
60
80
0
2
0%
25%
0
20
40
© BP 2013
02010 2020 2030
Energy Outlook 2030
0%2000-10 2010-20 2020-30
02010 2020 2030
Oil and gas: reserves and production
EuropeN. America
FSU
Middle East
Asia Pacific
50%% share of global totalKey:
S. & C. America Africa
Asia Pacific
0%
2011 reserves2030 output
Africa
Net importers 2011
© BP 2013Energy Outlook 2030
Net exporters 2011Net importers 2011
Energy imbalances: import profiles
60
Energy imbalances to GDP ratioEnergy imbalancesChina EU US
300
Mtoe Toe per $Mln GDP PPP
20
40
60 ChinaUSEU
0
300
-20
0-600
-300
OilG
-80
-60
-40
-1,200
-900
90 10 30 90 10 30 90 10 30GasCoal
© BP 2013
1990 2000 2010 2020 2030
Energy Outlook 2030
199
20 203
199
20 203
199
20 203
Energy imbalances: export profilesEnergy imbalances to GDP ratioEnergy imbalances
Saudi Arabia Africa RussiaMtoe Toe per $Mln GDP PPP
1000
1200Saudi Arabia
Russia600
800OilGas
400
600
800 Africa400
Coal
0
200
400
0
200
0 0 0 0 0 0 0 0 0
© BP 2013
01990 2000 2010 2020 2030
Energy Outlook 2030
199
201
203
199
201
203
199
201
203
Energy and carbon emissionsCO2 emissions and primary energy
Billion tonnes CO2
Growth of CO2 emissions % p.a.Billion toe
15
18
40
50 Emissions from energy use
Primary energy (RHS)
6%
8%1970-1990
1990-2010
2010 2030
Gas6
9
12
20
30 (RHS)
2%
4%2010-2030
Oil
Gas
0
3
6
0
10
2%
0%
© BP 2013Energy Outlook 2030
001970 1990 2010 2030
-2%China EU US
Conclusion
4%% p.a. Economic growth needs
energy
3%Income
per
gy
Competition and innovation are the key to meeting this
1%
2%
Popul
capita need
− energy efficiency
0%
Population
Economic Efficiency New supply
− new supplies
Wide ranging implications
© BP 2013
growthy
gainspp y
Energy Outlook 2030
January 2013
Energy: prices demand growth
2000
Energy and GDPBillion toe Trillion $2011
Energy prices$2011/boe
150
200
40
50
80
100
120 Oil - BrentGas - basketCoal - basket
10020
30
GDP (RHS)40
60
80
0
50
0
10
Energy0
20
40
© BP 201323
1970 1990 2010 20301965 1980 1995 2010
The power sector leads primary energy growthGrowth by sector and fuel,
2011-2030Growth by sector and region,
2011-2030Billion toe Billion toe
2
3 HydroNuclearRenew.
2
3RoW
Middl E t
0
1 ElectricityGasBiofuels0
1Middle East
China & India
-1
Tran
spor
t
Indu
stry
Oth
er
Pow
er OilCoal-1
Tran
spor
t
Indu
stry
Oth
er
Pow
er
d aOECD
© BP 2013
Final energy use Inputs to powerFinal energy use Inputs to power
Energy Outlook 2030
Emerging economies dominate energy production
18FSU
Billion toe18
Billion toe
12
15FSU
S&C America
N. America12
15
6
9 Middle East
EuropeNon-OECD6
9
Non-OECD
0
3 Asia Pacific
AfricaOECD
0
3OECD
© BP 2013
01990 2000 2010 2020 2030
Energy Outlook 2030
01990 2000 2010 2020 2030
Energy: prices demand growth
2000
Energy and GDPBillion toe Trillion $2011
Energy prices$2011/boe
150
200
40
50
80
100
120 Oil - BrentGas - basketCoal - basket
10020
30
GDP (RHS)40
60
80
0
50
0
10
Energy0
20
40
© BP 201326
1970 1990 2010 20301965 1980 1995 2010
Shale gas: regional growth
120
Bcf/d ChinaBcf/d N. America Bcf/d EU
Sources of gas supply, by region
80
100
120 Net pipeline importsNet LNG importsShale gas production80
100
120
80
100
120
40
60Other domestic production
40
60
40
60
-20
0
20
-20
0
20
-20
0
20
© BP 2013Energy Outlook 2030
201990 2010 2030
Energy Outlook 2030
201990 2010 2030
201990 2010 2030
Global gas balance
500
Bcf/dDemand Supply
450
500
Other non-OECD
2030 levelOECD
350
400
Other OECDMiddle East
Chinanon OECD
Non-OECD
OECD
250
300N. America
Other OECD
© BP 2013Energy Outlook 2030
2011 OECD Non-OECD 2011 Non-shale Shale
Energy Outlook 2030
Coal consumption
O
Coal demand by regionBillion toe
5
Billion toeCoal demand by sector
5 Oil
IndustryChina China Chi
4
5
China China4
5
Industry
Other
y
India India
China
India
China
India2
3China
India
China
India2
3y
Power
OECD
India
OECD
Other Non-OECD
OECD0
1OECD
Other non-OECD
OECD0
1Power
© BP 2013Energy Outlook 2030
1990 2000 2010 2020 203001990 2000 2010 2020 2030
Non-fossil fuels
2 0
Billion toeOECD
2 0
Non-OECDBillion toe
1.5
2.0RenewablesBiofuelsHydro
1.5
2.0
1.0
HydroNuclear
Renewables in power
1.0
0.0
0.5Renewables in power
Biofuels0.0
0.5
© BP 2013
0.01990 2000 2010 2020 2030
0.01990 2000 2010 2020 2030
Energy Outlook 2030
Growth of renewables in powerRenewable power
% p.a.% share
Share of power generationGrowth 2011-30, and share of power
15%
20%Nuclear
1970-2000 12%
15%
20%
25% Growth (RHS)Share 2011Share 2030
Non-OECD5%
10%
R bl
6%
9%
10%
15%
OECD0%
5%
2000 2010 2020 2030
Renewables2000-2030
0%
3%
0%
5%
OECD Other Non OECD
© BP 2013
2000 2010 2020 20301970 1980 1990 2000
OECD Europe
Other OECD
Non-OECD
Energy Outlook 2030
Power generation and electricity useElectricity share of final consumption
50%
Shares of power output
100%
40%
50%
Other 80%
100%
NuclearOil
20%
30%Industry
40%
60% HydroGas
0%
10%Transport
0%
20%
Renew.
Coal
© BP 2013Energy Outlook 2030
0%1990 2010 2030 1970 1990 2010 2030
High oil prices are reducing oil’s share of primary energy
100%
Oil share in sector
12
Fuel economy of new carsLitres per 100 km
75%
100%
PowerOther
8
10
12 EUUS light vehiclesChina
50%IndustryTransport
4
6
8
0%
25%
0
2
4
© BP 2013
1965 1978 1991 2004 2017 2030
Energy Outlook 2030
01995 2005 2015 2025
