1

Carlos PascualSpecial Envoy and Coordinator for

International Energy AffairsBureau of Energy Resources

U.S. Department of StateNovember 22, 2013

Global Energy OutlookAtlantic Council

Energy & Economic Summit

2

Consumption

19931995

19971999

20012003

20052007

20092011

20130

5

10

15

20

25Oil Supply and Demand

Mill

ion

barr

els

per d

ayU.S. Oil Import Dependence

Source and Notes: EIA, Short Term Energy Outlook (2012). Figures for 2012-13 are projections.

Crude, other

Crude, Onshore L480

2

4

6

8

10

12

14

0%

10%

20%

30%

40%

50%

60%

70%Oil Imports

Volume (left axis, Mb/d)

Share of consumption (right axis, %)

BiofuelsTight Oil

Other Onshore

OffshoreAlaska

Other

2006

Impo

rts

= 60

%

2012

Impo

rts

= 40

%

3

Oil Prices continue to fluctuate around $110

Source: EIA, November 2013

Jan 03, 2011

Apr 03, 2011

Jul 03, 2011

Oct 03, 2011

Jan 03, 2012

Apr 03, 2012

Jul 03, 2012

Oct 03, 2012

Jan 03, 2013

Apr 03, 2013

Jul 03, 2013

Oct 03, 2013

70

80

90

100

110

120

130

$/ba

rrel

Brent Crude Oil Price

4

Oil Supply Disruptions Elevated Since Early 2011

Source: EIA, October 2013

Jan 2011

Mar 2011

May 2011

Jul 2011

Sep 2011

Nov 2011

Jan 2012

Mar 2012

May 2012

Jul 2012

Sep 2012

Nov 2012

Jan 2013

Mar 2013

May 2013

Jul 2013

Sep 2013

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

LibyaIraqIranNigeriaYemenSyriaSudan / S. SudanOther Non-OPEC

Mill

ion

barr

els p

er d

ay

Oil Supply Disruptions

5

2012 OPEC Pro

duction

2012 Call on O

PEC Crude

Falling O

ECD Demand

OPEC NGLs su

pply growth

Non-OPEC su

pply growth

Rising non-O

ECD Demand

2013 Call on O

PEC Crude

28.5

29.0

29.5

30.0

30.5

31.0

U.S.

Other

Declining need for OPEC crude in 2013

Source: EIA, August 2013

Evolution in the Market’s Need for OPEC Crude Oil

Reduce Call

Increase Call 2013 Call on

OPEC crude is 0.4 Mb/d less than the 2012 Call and 0.7 Mb/d less than 2012 OPEC Production

Mill

ion

barr

els

per d

ay

6

2005 2010 2015 2020 2025 2030 2035 20400

100

200

300

400

500

600

700

800

900Total Non-OECDTotal OECDUnited StatesChinaIndia

Tota

l Pri

mar

y En

ergy

Con

sum

ption

(q

uadr

illio

n Bt

u)Challenge to Energy Governance

Source: EIA, IEO 2013

7

0

100

200

300

400

500

600

700

800

AlaskaAlaskaAlaskaAlaskaAlaskaAlaskaAlaskaAlaskaAlaskaAlaskaAlaskaAlaskaAlaskaAlaskaAlaskaAlaskaAlaskaAlaskaAlaskaAlaska

Gas Supply and Demand

Billi

on C

ubic

Met

ers

Consumption

Shale Gas

Tight Gas

Lower 48 Offshore Conventional

Coalbed MethaneAlaska

Lower 48 Onshore Conventional

Source and Notes: EIA, AEO 2013

U.S. gas imports continue to fall

2005 Imports = 17%

2012 Imports = 7%

19931995

19971999

20012003

20052007

20092011

20130

20

40

60

80

100

120

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

0.18Gas Imports

Volume (left axis, bcm)

Share of Consumption (right axis, %)

8

Japan and South Korea$15.65

UK $10.66

India $13.75

Lake Charles $3.15

Rio de Janeiro$14.65

Global Gas Markets

Bahia Blanca$15.65

World LNG Estimated November 2013 Landed and Hub Prices ($US/mmbtu)

Spain $10.90

Belgium $10.40

China $15.25

Reserves (bcm)

Mozambique 2825

Tanzania 565

Israel 407

Production (bcm)

2008 2035

Russia 662 881

Iran 130 279

Turkmenistan 71 136

Canada 175 192

United States 575 779

Norway 102 127

Australia 45 155

Qatar 78 260

Indonesia 74 119

Nigeria 32 119

Algeria 82 168

Latin America Total

148 292

Source: IEA, FERC, media and industry estimates.

Henry Hub $3.58

NBP $10.75

Altamira $16.40

9

LNG Export Capacity GrowthLNG Estimated Export Volumes

2012 2013 2014 2015 2016 2017 2018 2019 2020 -

100

200

300

400

500

600

700

800

900

1,000

FIDPlanned

Expo

rt V

olum

e (B

CM)

2014: Australia: Queensland Curtis (11.7)Libya: Marsa-el-Brega (3.0)Papua New Guinea: Hides (9.0)

2015: Algeria: Gassi Touil (5.5)Australia: Gladstone (10.8), Gorgon T1 (7.2), Australia Pacific (12.42) Indonesia: Dongi Senoro (2.8)Qatar: Debottlenecking (10.8)

2017: Australia: Gorgon T3 (7.2), Icthys (11.6)Canada: Kitimat (6.9), BC LNG (2.8)Equatorial Guinea: EGLNG (6.1)Papua New Guinea: PNG (4.1)Peru: Peru LNG (4.1)USA: Freeport (18.2)

2018: Australia: Browse (16.6), Bonaparte (2.8), Shell (4.1)Indonesia: Tangguh (5.2), Abadi (3.45)Israel: Levant LNG (13.8)Mozambique: Mozambique LNG 1, 2 (13.8)USA: Sabine Pass Phase 2 (12.42), Lake Charles (22.1)

2013: Algeria: Skikda (5.5)

2016: Australia: Gorgon T2 (7.2), Prelude (5.0), Wheatstone (12.3)USA: Sabine Pass Phase 1 (12.42)

2020Australia: Gorgon T4 (7.2), Australia (15.8), Brunei (5.52), Iran LNG (13.3), Mozambique (27.6), Nigeria (46.23), Papua New Guinea (16.56), Russia (62.1), USA (146.6)Tanzania (13.8)

2011 Top Ten LNG Exporters

1. Qatar: 30%2. Malaysia: 11%3. Indonesia: 10%4. Australia: 9%5. Nigeria: 7%6. Algeria: 6%7. T&T: 6%8. Russia: 4%9. Oman: 3%10. Egypt: 3%

Country: Facility (volume in bcm)Sources: PIRA

2019: Cameroon: Cameroon LNG (4.8)Canada: Shell LNG (16.6)

10

0%

5%

10%

15%

20%

25%LNG Pipeline

LNG Is Integrating Gas Markets

Data source: BP Statistical Review 2013

Pipeline and LNG Trade as a Share of Global Gas Consumption

Annual growth rate 2001-12:- Global gas consumption 2.8% - Global gas trade 5%- LNG trade 8.1%

11

Diverging Gas Prices, Spot Deals Lead Growing LNG Trade

Data source: EIA, PIRA

Price ($/mmbtu) LNG Imports (bcm)

20002001

20022003

20042005

20062007

20082009

20102011

2012 -

2

4

6

8

10

12

14

16

18

-

50

100

150

200

250

300

350 Asia-Pacific Long-Term LNG

Europe Long-Term LNG

U.S. Long-Term LNG

Asia-Pacific Spot LNG

Europe Spot LNG

U.S. Spot LNG

Asia (average spot)

U.K. (NBP)

U.S. (Henry Hub)

The share of consumption in major markets met by LNG imports rises from 8% to 16%

12

2010 2015 2020 2025 2030 20350

1000

2000

3000

4000

5000

China India Other Emerging Asia Japan OECD Asia, ex Japan ROW

Asia’s Role in Global Gas Consumption

1.6 tcm growth to 2035

Bcm 2010 2020 2035

OECD Asia 182 206 236 China 110 304 544 India 64 92 178 Other Asia 219 264 389 World 3,307 3,943 4,955

trillion cubic meters per annum (tcm)

Source: EIA

13

Natural Gas: Infrastructure and Policy

Sources: EIA, IEA, Industry Sources

14

China: Natural Gas Infrastructure and Policy

Sources: PetroChina, Industry Sources

Myanmar (12 bcm)

Uzbekistan (5-10 bcm)

Turkmenistan (65 bcm)

Kazakhstan (5-10 bcm) Russia (38 bcm)

Natural Gas Pipeline

Crude Oil Pipeline

Refined Product Pipeline

15

Shtokman Field Yamal Fields

Chayanda FieldsSakhalin

IslandKovykta Field

0 50 100 150 200 250 300 350 400 450 500

Billi

on C

ubic

Met

ers

Russia: Natural Gas Infrastructure and Policy

Sources: RIA NOVOSTI, AEI, Gazprom, BP Statistical Review (2013)

Oil Pipelines

Gas Pipelines

Priority Gas Pipelines

Halted Gas Pipelines

Russian Gas Exports and Projected Export Capacity

Sakhalin-2 (13)Shtokman (12)Yamal LNG (20)

Vladivostok (6.8)Pechora (6)De-Kastri (6)

Yamal 1(33)

Blue Stream

(16)

Nord Stream 1 & 2(55)

Ukrainian GTS(142.5)

BelarusianGTS

(44.5)

Other(19.5)

Central AsiaCenter

(80)

Yamal 2(15)

SouthStream

(63)

Altai*(30)

Pipeline to Europe(130)

LNG – Including Re-exports

(14.8)

Pipelineto FSU

(56)

Primarily Gas Consumer

Primarily Oil Consumer

Oil & Gas Consumer

Oil & Gas Competitors

2012Exports

PipelineCapacity

LNGCapacity

16

Framework for Analysis

Infrastructure• Regasification capacity• Storage• Connecting pipelines• Transnational pipelines• Tanker availability

Market Elements• Wholesale price deregulation• Separate gas marketing from

transit (unbundling)• Third party access

• Regasification• Pipelines• Storage

• Market players• Regulatory capacity• Relax destination clauses• Market-based indexation

Risk and Finance• Transit security• Infrastructure finance and

capital markets• Storage & Pipelines• Regasification• Liquefaction

• Commodity trade and financial markets

• Contract requirements

Market Data• Natural gas demand• Natural gas production• Import volumes

• Pipeline• LNG

• Prices• Production• Import• Wholesale• Retail

Europe Gas Trade 2012-2018Ni

geria

17

Data source: Gas Infrastructure Europe and IEA Medium-Term Gas Market Report 2013

Trinidad and Tobago, others

Qatar

Norw

ay

Russia

Russ

ia

OECD Europe Gas Demand 2012: 513 bcm2018: 525 bcm

LNG Imports2012: 66 bcm2018: 81 bcm

Pipeline Imports 2012: 185 bcm2018: 195 bcm

LNG Terminals● Existing or Under Construction● ProposedGas Flows• Pipeline• LNG

18

Russia

South Stream

SCPX

TANAP

Shah DenizTAP

Aphrodite (Cyprus)

Leviathan (Israel)

Tamar (Israel)

Eurasian gas infrastructure and gas discoveries

Source: BP, South Stream, IEA, Economist, EIA

Selected natural gas fields

CountryField name

Estimated Recoverable

reserves (bcm)

Cyprus Aphrodite 196

Israel Mari-B 42

Dalit 14

Tamar 280

Leviathan 540

Tanin 33.6

Karish 50.4

Palestinian Territories

Gaza Marine 28

AzerbaijanShah Deniz 84

Romania Domino 1 42-84