the shape of things to come: incorporating unproven...

The Shape of Things to Come: Incorporating Unproven Reserves of

Efficiency Savings into Energy Models

Bruce Biewald

Presentation to East Coast Energy GroupWashington, DC; November 10, 2004

22 Pearl StreetCambridge, MA 02139617.661.3248 bbiewald@synapse-energy.comwww.synapse-energy.com

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1. Marginal costs influence behavior2. The shape of CSE curves matters3. Unproven efficiency reserves are typically

ignored4. Unproven oil and gas reserves are not

ignored5. Research is needed to characterize

technological change and unproven efficiency reserves

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Prices for US Electricity, Gas, Oil (nominal $)

0

1

2

3

4

5

6

7

8

9

1019

70

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

cent

s/kW

h

Residential Electricity Price

Industrial Electricity Price

Petroleum (at 10,000 Btu/kWh)Natural Gas (at 10,000 Btu/kWh)

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Regional Clean Energy Plans

These reports are available on the web: www.repowermidwest.orgwww.poweringthesouth.orgwww.westernresourceadvocates.org/energy/bep.html

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Xenergy, Generic curve

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CSE Curve Data

• Xenergy, Generic curve• Solar Energy Research

Institute, 1981, US• Interlaboratory

Working Group on Energy-Efficient and Low-Carbon Technologies, 1997, US

• Tellus, 2002, Pacific NW

• American Council For an Energy-Efficient Economy, 1989, New York State (4)

• Marbek Resource Consultants and Willis Energy Services, 2003, British Columbia (2)

• LBL, 1999, US• SERI, 1981, US

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CSE Curve Data

• LBL, 1995, US• Amory Lovins, 1989, US• Optimal, 2003, New

York State• Xenergy, 2002,

California• Hewlett Energy

Foundation, 2002, California

• Northwest Power and Conservation Council, 2002, Pacific NW

• Tellus, 2001, Interior West

• Tellus, 2001, Pacific NW• Tellus, 2001, Utah• NYSERDA, 2003, New

York State (2)

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Solar Energy Research Institute, 1981, US

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Interlaboratory Working Group on Energy-Efficient and Low-Carbon Technologies, 1997, US

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Tellus, 2002, Pacific NW

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American Council For an Energy-Efficient Economy, 1989, New York State

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American Council For an Energy-Efficient Economy, 1989, New York State

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American Council For an Energy-Efficient Economy, 1989, New York State

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American Council For an Energy-Efficient Economy, 1989, New York State

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Marbek Resource Consultants and Willis Energy Services, 2003, British Columbia

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Marbek Resource Consultants and Willis Energy Services, 2003, British Columbia

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LBL, 1999, US

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SERI, 1981, US

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LBL, 1995, US

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Amory Lovins, 1989, US

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Optimal, 2003, New York State

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Xenergy, 2002, California

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Hewlett Energy Foundation, 2002, California

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Northwest Power and Conservation Council, 2002, Pacific NW

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Tellus, 2001, Interior West

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Tellus, 2001, Pacific NW

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Tellus, 2001, Utah

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NYSERDA, 2003, New York State

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NYSERDA, 2003, New York State

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EIA

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EIA

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Hydrocarbon Resource Classification

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US Oil and Gas (as of 1/1/2002)Crude Oil

(billion barrels)

Natural Gas (trillion

cubic feet)Undiscovered 56 222Inferred 49 232Unconventional and assoc. gas NA 611Total lower 48 unproved 105 1064Alaska 24 32Total unproved 130 1096Proven reserves 24 183Total technically recoverable 154 1279

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Oil and Gas MathUndiscovered

+ Inferred+ Proven reserves Geological and engineering data

demonstrate with reasonable certainty to be recoverable from know reservoirs under existing economic and operating conditions

= Technically recoverable reserves

Producible using current technology but without reference to economic profitability

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IEA Regional Shares

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Proven Reserves by Region

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Ultimately Recoverable

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World Original Resource Base

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Annual Production Scenarios

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Ultimately Recoverable Oil

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Gas Price Forecasts Since 1975

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Generic CSE curve corrected

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Research Ideas

• Analysis of CSE curves – past projections v. what actually happened

• Identify reasons for upturn in CSE price• Characterize reasons and quantify to the

extent possible – by technology.• Apply concepts from oil and gas reserves?