Canada's Role in the Global Energy Market

Canada’s Role in the Global Energy Market The Energy Roundtable October 11, 2011 Greg Stringham Canadian Association of Petroleum Producers

Canada’s Energy in a Global Context Jobs and Economic Growth  Creating jobs & Gov’t revenues  Key component of Canada’s economy Energy Security  6th largest supplier of crude oil  3rd largest supplier of natural gas Environmental Sustainability  GHG emissions, land and water  Technological advancements  Strong government regulation  Open, transparent reporting 2

Global Primary Energy Demand• Significant energy demand growth:  Population, standards of living• Need all forms of energy:  Increasing role for renewables  Continuing reliance on hydrocarbons  Increasing role for non- conventional crude oil & natural gas• Environmental challenges• Technology is a key lever for sustainable growth Current Policies Scenario 3

Two Methods of Oil Sands Recovery Drilling: 80% of reserves Mining: 20% of reservesPhoto: ConocoPhillips - Surmont 4 Schematic: Devon - Jackfish

Global Crude Oil Reserves by Country World Oil Reserves Open to 300 Private Sector 260 Oil Sands 250 Open to 56% 211 Restricted Private 175 (79%) Sector Other 200 44%billion barrels 137 150 115 102 92 100 60 46 50 37 30 25 20 19 0 sia ria an aq a da na a n ar i t a ab es ai bi by ta el Ir Ir at i s na ge w Ch ra at zu Dh hs Ru Li Q Ku Ni iA Ca St ak ne u ud d zh Ab Ve ite Sa Ka Un Source: Oil & Gas Journal Dec. 2010 5

International Companies Active in Canada United States Asia Europe Middle East Apache Canada China Investment BP Canada TAQA North Corp. Chevron Canada JACOS (JAPEX) Shell ConocoPhillips Korea Investment Statoil Corp. Devon Canada Korea National Oil Total E&P Co. EOG Resources PetroChina Canada Inc. ExxonMobil PTT Exploration & Production (Thailand) Marathon Oil Sinopec Murphy Oil 6

Canadian Oil Sands & Conventional Production 7

Top 10 World Crude Oil Producers in 2010 RussiaSaudi Arabia USA Iran ChinaCanada 2010 Mexico 2025 Nigeria UAE Kuwait 0 2 4 6 8 10 12 Million Barrels per Day Sources: U.S. Dept. of Energy, Energy Information Administration & CAPP

Canadian & U.S. Crude Oil PipelineProposals 9

Canadian Natural Gas Resource is Growing 2010 Produced 2000 Produced Remaining Remaining Shale/Tight/CBM 390 TCF* 70 years of supply 700 - 1300 TCF* 100+ years of supply *Estimates include Alberta’s 180 – 400 TCF • Technological advances have “unlocked” vast unconventional gas resources. *Estimated Recoverable Marketable Gas: Source: CSUG 10

EnvironmentalResponsibility

Responsible Environmental Development 25 Oil Sands GHG Emissions/bbl• Reducing GHG Emissions 20  Using less energy input 29%  Use energy more efficiently 15 g co2 eq./mj• CO2 Capture and Storage 10  Governments investing over $3 billion – partners with industry 5• Water 0  Increasing water recycle  Using saline water for steam• Land  New tailings technologies accelerate reclamation  Smaller footprint and faster reclamation

Global Energy Related Emissions Global Emissions Canada’s 2% OECD Europe Industrial Processes & Non-OECD Europe & Eurasia Waste 9.9% Transport Agriculture & Forestry 27.5% Japan 8.4% China India Oil Sands 6.5% Canada Residential 5.9% Other Fossil Fuel Australia/New Zealand 16.1% Manufacturing, Commercial & Construction Other 11.5% Electricity & Heat Generation United States 14.2% GHG emissions from oil sands:  just over 1/1000th of global GHG emissions  6.5% of Canada’s GHG emissionsSources:1. U.S. Dept. of Energy/EIA  29% reduction in intensity from 19902. Environment Canada 14

Carbon Price – Europe & Alberta Alberta Carbon Price CDN $15/tonneSource: ICE Futures Report Monthly Utilities Report & CAPP 16

Regulation and Transparency• Industry  Responsible Canadian Energy Oil Sands Progress Report  Corporate Sustainability Reports• Government & Regulators  Fully transparent process and reporting: • project applications, environmental impact assessments, hearings • Pre-production, production and reclamation phases• Independent Third Parties  Royal Society of Canada report • science-based, independent analysis of the environmental aspects of Canada’s oil sands  Academic and NGO publications 17

Proposed European Fuel Quality DirectiveIndustry is not opposed to CO2 reduction policiesPrinciples:• Not be based on selective discrimination  No reason to single out Canadian Oil Sands• Avoid duplication  Account for Canadian carbon reduction law (carbon price)• Base policy on sound science  Broad carbon footprint (lifecycle) study underway• Do not penalize transparency  Canada has transparent reporting, others do not 18

Well-to-Wheels GHG emissions for Oil Sands and Conventional Crudes (European Supply) 700 Well-to-retail Pump Fuel Combustion 600 Kg CO2e per barrel of Refined Products 500 400 300 200 100 0 Middle East Venezuela Canada Oil Angola Nigerian Venezuela- Iraq-Kirkuk Mexico- Caspian Sea Iraq- Saudi Brent Blend Heavy (1) Part Upg. Sands (2) Light Bachaquero Maya Basarah Medium 1) Steam injection is used for production.Source: IHS/CERA Oil Sands, Greenhouse Gases, and European Oil Supply - April 2011 2) Based on 2009 supply data. 19

Creating Jobs

Canadian Oil Sands – TransAtlantic Connections• Oil/Gas/Energy Companies  BP, Shell, Total, Statoil and others• Financial Institutions• Investment Funds• Suppliers of Goods and Services  Construction, Machinery, Equipment, Engineering, Geology, etc. 21

European Suppliers to Canada’s Oil Sands (1) 22

European Suppliers in Canada’s Oil Sands (2) 23

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Canada's Role in the Global Energy Market

by Canadian Association of Petroleum Producers (CAPP) on Oct 24, 2011

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Canada’s Role in the Global Energy Market — Presentation Transcript