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8 Νοε 2013 (πριν από 3 χρόνια και 5 μήνες)

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Energy Independence

National & State by State

Wyoming Infrastructure Authority

September 9, 2013


Ed Hirs


Hillhouse Resources, LLC & University of Houston


ed@hillhouseresources.com


What were past Policies?

Crude Oil




Mandatory Crude Oil Import Quota (1959
-
1974)


Crude Oil Price Controls (pre
-
1972 and
post
-
1972; 1973
-
1979)


Strategic Petroleum Reserve (1973
-
now)

Why Worry?

94% of crude reserves are held by
sovereign nations, not the US.


World oil prices have risen during the
greatest recession of the past 80 years.


RAND estimates the probability of a
significant, negative supply shock of at
least 8% over the next decade.

Prices with 10 mmbopd Shock

With oil at $80/bbl and 80 mmbopd current
world consumption



YGESG’s elasticity of demand =
-
0.04



Shock Price = $330/bbl




Nordhaus’ elasticity of demand =
-
0.015



Shock Price = $746/bbl


Price

$/bbl

1

2

3

$
80

$400

4

5

6

Time

Months

6 Month Disruption

~$563 billion in consumer loss, calculated simply at 19.55 million barrels per day X 6 months X 30 days per
month X ($400
-

$80)/2

Figure One

MMbbl/day


$/bbl

Domestic Demand

World and Domestic
Price: Yr 1


C

Domestic Price: Yr 5

Yr 10 No Imports

Domestic Supply Curve Only

B



A



Price with No Imports
: Yr 10


P
W

P
Yr5

P
Yr10

Yr 5 Reduced Imports + Domestic Supply

Limiting Imports

Costs & Gains


From 2010 to 2020, limiting imports costs
$40 billion in Consumers Surplus



Over the same period, the US gains
Domestic Producers Surplus of $227
billion



The net gain to the US economy is $187
billion without considering costs of shocks!

Shale Oil Technology Development




Morgan Stanley data indicate the nation’s
LOWEST average marginal cost for shale
oil is $51/bbl, not including the costs of
leasing. This is lower than that in the
Bakken or in the Eagle Ford.


The highest cost Saudi crude is $25/bbl


Why is shale oil economic?

What are economic substitutes?

Focus on new liquids or substitutes that can be:



Refined to be priced at the pump competitively
with crude oil based products


Delivered “seamlessly” to Consumer


Cannot be subsidized by the federal government


Development of numerous commercial plants by
different companies by the end of 2020

Coal to Liquids

Does it pass the requirements?



At $86/bbl CTL is economically competitive with
crude oil price (at a ~$100K/bbl capital cost)


CO2 sequestration costs are ~$2.94/bbl


1 plant in the USA today (legacy plant of the US
Synfuels Corp) and 20 proposed CTL plants (4
of which are in design phase)

Gas to Liquids


Gas to Liquids production plants have
been announced around the world


10 mcf per bbl of product produced


Based on NYMEX forward curve, the price
of gas will be as much as $5/mcf, and the
price of ultra
-
low Sulfur Diesel will be as
low as $2.75 per gallon




Gas to Liquids

To produce 1 bbl of ultra low Sulfur Diesel:


Revenue: 42 gal/bbl X $2.75

=

$ 115.50

Cost: 10 mcf/bbl X $5.00


=


50.00





Gross Profit per bbl:

$ 65.50



Or about $23.9 million per year for a 1,000
bbl per day plant

9/12/2013

14

Hillhouse Resources

Hawkins Ranch Regional Productive Setting

Silverspoon
, 2008

9/12/2013

15

Hillhouse Resources

Hawkins Ranch Oligocene Lower Frio Tex
Miss.Section

Slope
-
Basin Floor Turbidite Section




Thick (50
-
300 ft)


Geopressured

14
-
17
ppg


Prolific Producers


Silverspoon
, Sanborn Fields


Lower Frio Tex Miss. Section

9/12/2013

16

Hillhouse Resources

Hawkins Ranch Prospect Summary

Wyoming



Natural gas production is now back at
2007 levels due to lack of takeaway
capacity


Not unique to Wyoming

National takeaway problem

GTL

Technology

SASOL is the industry leader



Alberta plant


103,900 bbl/day in two phases


1 Bcf/day feedstock


C$5 billion estimated cost


Lake Charles plant


96,000 bbl/day in two phases


$16 billion estimated cost

GTL

Technology

Smaller, modular plants have been planned
for years…



Shift Resources, Canada


Greyrock
, California


CompactGTL
, UK


Ventech

Engineers International, TX


Oxford Catalysts/
Velocys


GTL

Technology

Smaller, modular plants have been planned
for years…



Costs are estimated at $100,000 per
flowing bbl of capacity


Operating costs of $15/bbl


One currently under construction by
Ventech

with
Velocys
/Oxford


Sources

“Crude Oil Imports and National Security,” Yale Graduates Energy
Study Group, SSRN.com


What You Need to Know About Energy
, National Academies Press,
2009


“Synfuels to Replace Crude Oil Soon,” Yale Graduates Energy Study
Group, SSRN.com


The Unsustainable Costs of Partial Deregulation
, Paul W. MacAvoy,
Yale University Press 2007, SSRN.com





Energy Independence

National & State by State

Wyoming Infrastructure Authority

September 9, 2013


Ed Hirs


Hillhouse Resources, LLC & University of Houston


ed@hillhouseresources.com