the future of the u.s. oil supply security strategy
TRANSCRIPT
USAEE Washington DC July 2004
The future of the U.S. Oil SupplySecurity Strategy
Ramón EspinasaConsultant, Inter-American Development Bank (IDB)
and Andean Development Corporation (CAF)
USAEE Washington DC July 2004
6000
9000
12000
15000
18000
21000
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003US Crude Oil Balance (mbd)
US Consumption
US Production
US Imports
US imports have increased two and a half times over the last 15 years
USAEE Washington DC July 2004
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9000
12000
15000
18000
21000
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Persian Gulf
Rest of the World
WH
US Crude Oil Balance (mbd)
US Consumption
US Production
Four blocs: US, WH, PG, RoW
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1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Consumption LAC + Canada
Production LAC + Canada
Net WH Exports into US
WH Crude Oil Balance (mbd)
WH net exports into US have increased two fold since 1985
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2000
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1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
LAC
Canada
Net WH Oil exports into US (mbd)
LAC exports amount 80% of WH exports into US
USAEE Washington DC July 2004
25%
30%
35%
40%
45%
50%
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
60%
65%
70%
75%
80%
85%
Net WH Imports / Imports
US P + Net WH M / US C
US Net M WH / Total M and US P + M WH / US C (%)
Net WH imports amount 40% total US imports and WH supplies amount 65% US Consumption
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50000
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
RoW Production
Exports into the US
RoW Crude Oil Balance (mbd)
RoW Consumption
RoW Imports
RoW imports 15.5 Mbd more than threefold what it exports into the US (4.7 Mbd)
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1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
X PG into US
P-C RoW
X RoW into US
PG Crude Oil Balance (mbd)
PG Production
PG Consumption
PG exports 15.5 Mbd to RoW, and 2.5 Mbd to the USUS dependence on PG supplies is much larger than what appears at first sight
USAEE Washington DC July 2004
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17500
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22500
25000
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
Persian Gulf
Rest of the World
Western Hemisphere
US Crude Oil Balance (mbd)
US Consumption
US Production
US imports could increase by 2/3 to 2020 from 12 Mbd up to 20 Mbd
USAEE Washington DC July 2004
From the US perspective looking into the future there are two sources of supply: LAC and PG
5.6%
11.4
205RoW
2.2%1.2%1.3%15.3%9.3%P/R
27.28.13.91.02.8Production mMby
1221686293730Reserves mMbd
WorldPGLACCanadaUS
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15000
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25000
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
Consumption LAC + Canada
WH X US
Production LAC + Canada
WH Crude Oil Balance (mbd)
WH Growth:Production between 19 Mbd and 23 Mbd
USAEE Washington DC July 2004
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1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
Consumption LAC + Canada
WH X US
Production LAC + Canada
WH Crude Oil Balance (mbd)
WH Growth:Production between 19 Mbd and 23 Mbd
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18000
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
LAC Consumption
LAC Production
LAC Crude Oil Balance (mbd)
LAC Growth:Production between 15 Mbd and 18 Mbd
LAC Exports
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12000
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18000
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
LAC Consumption
LAC Production
LAC Crude Oil Balance (mbd)
LAC Growth:Production between 15 Mbd and 17 Mbd
LAC Exports
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10000
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
Net WH Exports into US
Net WH Exports into US (mbd)
WH Growth:Exports between 1.2 Mbd and 5 Mbd
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6000
7000
8000
9000
10000
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
Net WH Exports into US
Net WH Exports into US (mbd)
WH Growth:Exports between 1.2 Mbd and 5 Mbd
USAEE Washington DC July 2004
25%
30%
35%
40%
45%
50%
55%
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
Net Imports WH / M
US Net Imports WH / US Total Imports (%)
WH / US Imports between 33% and 50% at present 40%
USAEE Washington DC July 2004
45%
50%
55%
60%
65%
70%
75%
80%
85%
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
US P + Net M WH / US C
US Production + Imports WH / US Consumption (%)
WH Supplies between 45% and 60% at present 65%
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30000
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60000
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
RoW Consumption
RoW Production
RoW Crude Oil Balance (mbd)
RoW increases net imports by 8 Mbd (the same as the US)
RoW Imports
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40000
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
PG Consumption
PG Production
PG Crude Oil Balance (mbd)
PG: World supplier of last resortProduction between 34 Mbd and 40 Mbd
PG Exports
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1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
PG Consumption
PG Production
PG Crude Oil Balance (mbd)
PG: World supplier of last resortProduction between 34 Mbd and 40 Mbd
PG Exports
USAEE Washington DC July 2004
190
170Total
204013017 MbdExponential(2.5%)
-4013015 MbdLinear(245 mbd/y)
2 Mbd5 MbdBase
10 MbdProduction
2020Scenario
Investment LAC (mM$)
USAEE Washington DC July 2004
16
164 Mbd
212
168Total
44569640 MbdExponential(3.4%)
-569634 MbdLinear(670 mbd/y)
6 Mbd8 MbdBase
22 MbdProduction
2020Scenario
Investment PG (mM$)
USAEE Washington DC July 2004
Political Economy Issues• Together with the PG LAC is the world region with the largest oil growth
potential• Because of geographical proximity and political ties development of
LAC oil reserves should be a priority for the US• Neither the national states nor the LAC economies produce the savings
to finance oil investment• It is possible to put forward a win-win strategy• History of mutual distrust between Companies and Governments• Understand the need for each other• Role of national states and MLOs: increase mutual trust and reduce risk
USAEE Washington DC July 2004
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1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
US Crude Oil Domestic Firts Purchase Price $02/bl
US Crude Oil Domestic Firts Purchase Price $/bl
US Crude Oil first purchase price ($/b)
USAEE Washington DC July 2004
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1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Consumption LAC
LAC Exports in to the US
Production LAC
LAC Crude Oil Balance (mbd)
USAEE Washington DC July 2004
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500
1000
1500
2000
2500
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3500
4000
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Consumption Canada
Production CanadaExports into the US
Canada Crude Oil Balance (mbd)
USAEE Washington DC July 2004
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1000
1500
2000
2500
3000
3500
4000
4500
5000
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
Consumption Canada
Production Canada
Canada Crude Oil Balance (mbd)
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20000
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
Consumption LACLAC Exports in to the US
Production LAC
LAC Crude Oil Balance (mbd)
USAEE Washington DC July 2004
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10000
12500
15000
17500
20000
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
LAC
Persian Gulf
Rest of the World
Canada
US Crude Oil Balance (mbd)
US Consumption
US Production
Four blocs: US, WH, PG, RoW