game changers in crude and natural gas markets · 2017. 4. 11. · game changers in crude and...

43
David E. Dismukes, Ph.D. Center for Energy Studies Louisiana State University Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center for Energy Studies

Upload: others

Post on 03-Sep-2020

2 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

David E. Dismukes, Ph.D.Center for Energy StudiesLouisiana State University

Game Changers in Crude and Natural Gas Markets

Chevron Community Advisory Panel Meeting

September 17, 2012

Center for Energy Studies

Page 2: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Energy-RelatedCarbon Dioxide

81.2%

Summary and Take Away

2

• New natural gas supply availability is having considerable impacts on all energy markets today and on longer term, forward-looking basis.

• Shale revolution is now migrating into liquids and crude oil production. Facilitating additional natural gas production despite low prices.

• Considerable economic development opportunities.

• Early in the process, considerable uncertainties, considerable risks, difficult to attain information, play understandings still very preliminary – policy need to manage expectations despite the (justified) excitement.

Center for Energy Studies

© LSU Center for Energy Studies

Introduction

Page 3: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

Reminder – The Way Things Were

3© LSU Center for Energy Studies

Page 4: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

2.50

3.00

3.50

4.00

4.50

5.00

5.50

6.00

2004 2008 2012 2016 2020 2024 2028

Onshore (Lower 48) Offshore (Lower 48)

Mill

ion

Bar

rels

per

day

Relatively uninspiring U.S. crude oil production forecast.

Source: USDOE/EIA, Annual Energy Outlook, 2006 © LSU Center for Energy Studies

Long Term US Crude Oil Production Forecast (2006)

Center for Energy Studies Historic Trends

Page 5: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

2.5

4.5

6.5

8.5

10.5

12.5

14.5

16.5

18.5

20.5

2004 2008 2012 2016 2020 2024 2028

Onshore (Lower 48) Offshore (Lower 48)

Trill

ion

cubi

c fe

et

Natural gas production forecasted to decrease starting in 2016.

Source: USDOE/EIA, Annual Energy Outlook, 2006 © LSU Center for Energy Studies

Long Term US Natural Gas Production Forecast (2006)

Center for Energy Studies Historic Trends

Page 6: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Crude Oil and Natural Gas Prices

Center for Energy Studies Historic Trends

$0

$2

$4

$6

$8

$10

$12

$14

$16

$0

$20

$40

$60

$80

$100

$120

$140

$160

Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08

Crude Oil (WTI) Natural Gas (Henry Hub)

Source: Federal Reserve Bank

Cru

de O

il ($

/Bbl

) Natural G

as ($/Mcf)

Prices reflected the state of, and outlook for, energy markets.

6© LSU Center for Energy Studies

First energy price crisis

Recession

Page 7: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Dec

-96

Jun-

97

Dec

-97

Jun-

98

Dec

-98

Jun-

99

Dec

-99

Jun-

00

Dec

-00

Jun-

01

Dec

-01

Jun-

02

Dec

-02

Jun-

03

Dec

-03

Jun-

04

Dec

-04

Jun-

05

Dec

-05

Jun-

06

Dec

-06

61

62

63

64

65

66

67

68

Rig Count

Production

Source: Energy Information Administration, Department of Energy; and Baker-Hughes Inc.

3 percent increasein production

(Aug-99 to Sep-01)

131 percent increase in rigs

(Apr-02 to Aug-06)

Num

ber o

f Ope

ratin

g R

igs

12-M

onth

Mov

ing

Aver

age

(Bcf

/d)

158 percent increase in rigs

(Apr-99 to Jul-01)

4 percent decrease in production

(Feb-04 to Aug-06)

The maturing nature of US basins reflected in drilling productivity.Historic Monthly Rig Counts and Gas Production (1997-2006)

Center for Energy Studies Historic Trends

Page 8: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Source: Natural Gas: Can We Produce Enough?” Independent Petroleum Association of America, website: http://www.ipaa.org/govtrelations/factsheets/NaturalGasProdEnough.asp.

ANWR = 3.5 TCF

ANS = 35 TCF

Policy advocacy focused on restricted areas as a potential solution to the resource constraint problem.

Resource Estimates: Restricted Areas (Percent Restricted)

Center for Energy Studies Historic Trends

Page 9: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Source: National Petroleum Council

LNG provides 14% of the U.S. supply of natural gas by 2025.

© LSU Center for Energy Studies

NPC Forecast North American Supply Disposition

Center for Energy Studies Historic Trends

Page 10: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

What Changed? The Way Things Are

10

© LSU Center for Energy Studies

Page 11: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Unconventional vs. Conventional Geological Formations

Center for Energy Studies

11

© LSU Center for Energy Studies

Recent Trends

Page 12: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Source: Energy Tomorrow

Center for Energy Studies

Shale, Horizontal Drilling, and Fractionation

• Shale (unconventional) wells differ from “conventional” wells since they are drilled horizontally and not vertically.

• Horizontal segments are then “fractured” with higher pressure water, chemicals and silica to break up the formation.

• The fractionation process releases/liberates the hydrocarbons.

• Some environmental and water use concerns expressed in some areas of the country on this drilling process.

Recent Trends

Page 13: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

Production from a Typical Well and Shale Well

13© LSU Center for Energy Studies

Recent Trends

Illustrative production decline from a convention vs. shale producing well. As much as 80 percent of total production

thought to occur in the first two to three years.

Page 14: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Source: Energy Information Administration, U.S. Department of Energy

Domestic Shale Gas Basins and Plays

Center for Energy Studies

14

© LSU Center for Energy Studies

Unlike conventional resources, shale plays

(natural gas, liquids, and crudes) are

located almost

ubiquitously throughout the U.S. and

are the primary

reason for the decrease in overall and

regional natural gas

prices.

Recent Trends

Page 15: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

Game Changer 1: Natural Gas

15

© LSU Center for Energy Studies

Page 16: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

$/M

cf

Source: Energy Information Administration, U.S. Department of Energy.

Natural Gas Price Variability

Center for Energy Studies

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

Jan-97 Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11

average for period2000-2001 heating season

through 2008: $6.24(standard deviation: $2.39)

since 2009: $4.11(standard deviation: $0.70)

16

© LSU Center for Energy Studies

The 2001 to 2009 market trend of higher average prices coupled with high volatility is reversing itself and post 2009 prices are significantly lower.

Average 1997through 2000: $2.79(standard deviation: $1.28)

Natural Gas Trends

Page 17: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Dry

Nat

ural

Gas

Pro

ved

Res

erve

s (T

cf)

Source: Energy Information Administration, U.S. Department of Energy

Natural Gas Proved Reserves and Production

Center for Energy Studies

-

5

10

15

20

25

30

0

50

100

150

200

250

300

350

1970 1975 1980 1985 1990 1995 2000 2005 2010

Reserves

Production

Marketed P

roduction (Tcf)

17

© LSU Center for Energy Studies

Current U.S. natural gas reserves are approaching record levels not seen since 1970. Natural gas production is at levels that surpass historic peaks.

Natural Gas Trends

Page 18: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Impo

rts -

Bcf

Source: Energy Information Administration, U.S. Department of Energy

Natural Gas Imports

Center for Energy StudiesP

ercent of Total U.S

. Supply -%

0%

5%

10%

15%

20%

25%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

LNG Imports Pipeline Imports Imports as a Percent of Total Supply

18© LSU Center for Energy Studies

Natural gas imports, once thought the be the supply remedy for meeting future gas needs are falling to levels also not seen since the 1990s.

Natural Gas Trends

Page 19: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Res

erve

s -T

cf

Source: Energy Information Administration, U.S. Department of Energy

Annual Energy Outlook, Natural Gas Reserves

Center for Energy Studies

200

220

240

260

280

300

320

2010 2015 2020 2025 2030 2035

19© LSU Center for Energy Studies

Unconventional resources are not a “flash in the pan” and are anticipated to continue to increase over the next two decades or more.

Natural Gas Trends

Page 20: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Basin Competition

Center for Energy Studies

Source: MIT Energy Initiative. 20© LSU Center for Energy Studies

China1,275 Tcf

Australia396 Tcf

South Africa485 Tcf

Argentina774 Tcf

Brazil226 Tcf

Mexico681 Tcf

Canada388 Tcf

U.S. 862 Tcf

France180 Tcf

Poland187 Tcf

Algeria231 Tcf

Libya290 Tcf

Close to 6,000 TCF of shale gas opportunities around the world. Coupled with 9,000 Tcfin conventional suggest a potentially solid resource base for many decades.

Natural Gas Trends

Page 21: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

Forecast U.S. natural gas production, 1990-2035

21© LSU Center for Energy Studies

0

5

10

15

20

25

30

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Shale gas Tight gas Non-associated offshoreAlaska Coalbed methane Associated with oilNon-associated onshore

Tcf

Shale availability will drive U.S. natural gas supply.

Shale Gas Production

Assc. Gas Production

Page 22: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

(201

0 $/

MM

BTU

)

Source: Energy Information Administration, U.S. Department of Energy

Choosing Most Current Natural Gas Price Forecasts: AEO-2007 to AEO-2012

Center for Energy Studies

0

2

4

6

8

10

12

14

16

1997 2002 2007 2012 2017 2022 2027 2032

Actual Henry Hub AEO-2007 AEO-2008 AEO-2009AEO-2010 AEO-2011 AEO-2012

22© LSU Center for Energy Studies

Shale availability has significant impact on future price outlook.

Anticipated price outlook in 2009.

Anticipated price outlook today.

Natural Gas Trends

Page 23: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

Game Changer 2: Crude and Liquids

23

© LSU Center for Energy Studies

Page 24: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Crude Oil and Natural Gas Prices

Center for Energy Studies Crude Oil Trends

$0

$2

$4

$6

$8

$10

$12

$14

$16

$0

$20

$40

$60

$80

$100

$120

$140

$160

Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11

Crude Oil (WTI) Natural Gas (Henry Hub)

Source: Federal Reserve Bank

Cru

de O

il ($

/Bbl

)N

atural Gas ($/M

cf)

Two significant breaks (decoupling) of natural gas and crude oil prices.

24© LSU Center for Energy Studies

First price decoupling: Gas Up, Crude Down

Second price decoupling: Crude Up, Gas Down

Recession

Page 25: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

0

20

40

60

80

100

120

140

160

180

200

0

500

1,000

1,500

2,000

2,500

2000 2002 2004 2006 2008 2010

Onshore Offshore

Center for Energy Studies

Domestic Rig Counts – Onshore vs. Offshore

25

U.S

. Ons

hore

Rig

Cou

nt

Source: Baker Hughes.

U.S

. Offshore R

ig Count

Deepwater Horizon Spill

Onshore rig counts are moving close to their pre-recession levels, primarily motivated by increased crude oil drilling, not natural gas.

Crude Oil Trends

Page 26: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

26

Domestic Rig Count – Crude Oil vs. Natural Gas

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jul-87 Jul-90 Jul-93 Jul-96 Jul-99 Jul-02 Jul-05 Jul-08 Jul-11

Per

cent

of T

otal

Rig

s

Source: Baker Hughes.

Oil Rigs

Gas Rigs

For the first time in 16 years, the number of oil rigs is equivalent to gas rigs.

Crude Oil Trends

Page 27: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Rig Count and Crude Oil Price, (Each State Measured Relative to 1999 Activity)

Center for Energy Studies

$0

$2

$4

$6

$8

$10

$12

$14

0

200

400

600

800

1,000

1,200

1,400

Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11

N. Louisiana Texas PennsylvaniaNew Mexico Oklahoma WyomingColorado Natural Gas Price

Source: Baker Hughes; and Federal Reserve Bank of St. Louis.

Rig

Cou

nt (J

anua

ry 1

999

= 10

0)H

enry Hub ($/M

cf)

27© LSU Center for Energy Studies

Drilling rig activity increasing rapidly in liquids rich shale.

Crude Oil Trends

Page 28: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

Rig Count, North Louisiana (Haynesville) and Texas District 1 (Eagle Ford)

28© LSU Center for Energy Studies

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

0

100

200

300

400

500

600

700

800

900

1,000

Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11

North Louisiana Texas - District 1 Spot Price Differential

Rig

Cou

nt (J

anua

ry 2

009=

100)

$/BO

E

Indexing the rig change from January 2009 highlights the basin preference.

Haynesville is losing its competitive advantage due to the

liquids preference associated with other shales.

Source: Baker Hughes. Rig counts are indexed to the level of active drilling rigs in each reported area as of January 2009.

Crude Oil Trends

Page 29: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

29

© LSU Center for Energy Studies

Can you insert a slide that shows a

Crude Oil Trends

Page 30: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Annual Production, Unconventional Resources

Center for Energy Studies

30© LSU Center for Energy Studies

Bcf/d MMBBl/d

Source: Advanced Resource Intl; presentation to Cheniere Board, March 2011; Cheniere Research

0

1

2

3

4

5

6

7

8

2010 2011E 2012E 2013E 2014E 2015E 2020E0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0Includes Eagle Ford, W. Barnett, Bakken Shales;

Granite Wash, Piceance & Uinta Tight Sands

LiquidsGas

Liquids production from shale plays > 3 million barrels per day by 2020 Associated natural gas > 7 Bcf/d of “costless” supply (or about 2.3 Bcf/d per

every 1.0 MMBbls/d of shale-based liquids production).

Crude Oil Trends

Page 31: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

Closer to Home: Louisiana and the Tuscaloosa Marine Shale (“TMS”)

31

© LSU Center for Energy Studies

Page 32: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

Crude Oil Shale Opportunities -- Louisiana

32© LSU Center for Energy StudiesSource: Oil and Gas Journal and Louisiana Geological Survey.

• 1998 LGS Study primary publicly-available source of information on the formation.

• Lies between sands of the upper and lower Tuscaloosa.

• Approximately 2.7 MM acres.

• Varies in thickness from 500 feet (MS) to around 800 feet (LA).

• Shallowest opportunity around 10,000 feet – mostly between 11,000 to 12,000 –some areas as deep as 16,000 (EBR).

• Estimated potential resource of 7 BBbls.

Tuscaloosa Marine Shale

Page 33: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

Cumulative TMS Wells Drilled

33© LSU Center for Energy StudiesSource: Amelia Resources.

Tuscaloosa Marine Shale

Approximately 13 wells drilled to date.

Page 34: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Production Decline Curve Differences

Center for Energy Studies

34

© LSU Center for Energy Studies

Tuscaloosa Marine Shale

• Recently-drilled wells located primarily in southwestern MS and in the Florida parishes.

Page 35: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

Tuscaloosa Marine Shale Wells

35© LSU Center for Energy StudiesSource: Amelia Resources.

Tuscaloosa Marine Shale

Page 36: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

Tuscaloosa Trend Scout Report, Score Card

36© LSU Center for Energy StudiesSource: Amelia Resources.

Tuscaloosa Marine Shale

Page 37: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

TMS Daily Oil Production

37© LSU Center for Energy StudiesSource: Amelia Resources.

Tuscaloosa Marine Shale

Initial production (“IP”) rates important, but only one of several statistics that should be reviewed given typical production characteristics and uncertainty.

Page 38: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

The Early Days, Eagle Ford Shale

38© LSU Center for Energy StudiesSource: Amelia Resources.

Tuscaloosa Marine Shale

Page 39: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

United States Employment (2005 = 100)

39© LSU Center for Energy Studies

90

100

110

120

130

140

150

2005 2006 2007 2008 2009 2010 2011

Empl

oym

ent (

2005

= 1

00)

Oil and gas employment

Total emplyoment

Source: Bureau of Labor Statistics

Tuscaloosa Marine Shale

Oil and gas employment is almost 40 percent above its 2005 level while total U.S. employment struggles to regain four years of losses.

Page 40: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

U.S./Shale Producing State Employment (2005 = 100)

40© LSU Center for Energy Studies

94

96

98

100

102

104

106

108

2005 2006 2007 2008 2009 2010 2011

Empl

oym

ent (

2005

= 1

00)

States with major shale activity

Non-shale states

Shale states: LA, TX, AR, ND, UT, CO, & PASource: Bureau of Labor Statistics

Tuscaloosa Marine Shale

A comparison of total employment tells story beyond just oil and gas. Recession not as severe; recovery more robust.

Page 41: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

Conclusions

41

© LSU Center for Energy Studies

Page 42: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

Conclusions

42© LSU Center for Energy Studies

• Exceptional industry performance: employment up; reserves up; production up; investment/capacity up; and exports up.

• Traditional sectors of energy industry have proven they are high technology, high capital, and high growth – you’d have a hard time figuring that out watching the nightly news.

• Policy and perception continue to be things that plague continued industry development. It is hard to imagine the development and innovation that could arise if the current policy uncertainty were removed.

• Policy uncertainty is the biggest impediment to continued development. Significant short-term policy retrenchment on unconventional resources could lead to economic impacts that would pale in comparison to past financial and housing crisis.

Conclusions

Page 43: Game Changers in Crude and Natural Gas Markets · 2017. 4. 11. · Game Changers in Crude and Natural Gas Markets Chevron Community Advisory Panel Meeting September 17, 2012 Center

Center for Energy Studies

Questions, Comments and Discussion

43

[email protected]