Black & Veatch's CEO of Energy, Dean Oskvig gives an overview of findings from Black & Veatch's 2013 Natural Gas report.

1. 26September2013
PRESIDENT & CEO
B&V ENERGYDEAN OSKVIG
STRATEGIC DIRECTIONS
U.S. NATURAL GAS INDUSTRY

2. 26 September 2013DHO(125) |
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A/E
Vendor
Regulator
Law Firm
260 participants 50 participants

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Optimistic
92%
Neutral
5%
Pessimistic
3%
Outlook on Industry Growth
North America
Between Now and 2020
• Low prices
• Ample supply
• Growth drivers
•Power Generation
•Latter half of
decade
•60% gas by 2037
•Emerging
•LNG (exports)
•Transportation
•Petrochemicals

4. • Mercury and Air Toxics Standard (MATS)
• Regional Haze Program (BART, Best
Available Retrofit Technology)
• Greenhouse Gas Regulation
“BIG THREE” ENVIRONMENTAL
DRIVERS AFFECTING FUEL
CHOICES (DASH TO GAS) AND
ECONOMICS
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5. GAS PRICES AT UNSUSTAINABLE LEVEL
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Gas prices below $6.00 provide advantage over
other fuels
$3.60 + = $4.50 to $6.00 / MMBtu
Power Generation
Overall Demand
Environmental
Regulation
LNG Exports
Increased E&P

6. • Image challenge underway
Gallup: next to federal
government, O&G with
least positive image of
25 business sectors /
industries
• Recent collaboration is encouragingGas industry
historically fractious
• Public and private investment (jobs)
• Widespread across North America
Gas industry positioned to
support economic recovery
SPREADING GOOD NEWS
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7. TOP LONG-TERM INDUSTRY ISSUES
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Safety
Economic
Growth
Reliability
Rate &
Regulatory
Certainty

8. AGING INFRASTRUCTURE
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Disparity
Value Chain
Transmission
Other Stakeholders
Distribution
1 6 1Importance
Rank
VS.

9. • Distribution is target
• Widespread (70% of LDCs)
• NE, MW heaviest
• 20+ year projects
• Cost  (and will continue)
• Small  Large
AGING INFRASTRUCTURE
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10. CYBER SECURITY
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MYTH: Smaller companies
not as susceptible
• Perpetrators scan for vulnerability
• Attack may be delayed
Exposure
Interruptions to
explosions
“Wait and See”
High tolerance
for risk
Need
Proactivity, not
mandates

11. FUEL PROCUREMENT
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PURCHASE
• Short-term (<1 year)
contracts
• Buyers content
• Sellers content
TRANSPORT
• Long-term (>3 year)
contracts
• “Firm” capacity
•Controlling reliability
•Remarket excess

12. • Rate certainty
• Outgrowth of regulatory certainty
• #4 industry issue
• Regulation
• 67% view as negative impact
• Future is more stringent
• “Favored” practices: significant opinion variance
RATES & REGULATION
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Gas Utilities
Consumers
• Large Markets
• NE, MW

13. INTERSECTION OF GAS AND ELECTRICITY
CAUSING RELIABILITY CONCERNS
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Who gets the gas?
Can be stored
Daily “reservation”
Totally deregulated
(competition for resource)
Managed for availability
Isn’t stored
Instantaneous
Only partially deregulated
Managed for reliability

14. • Shale Gas
• Hydraulic fracturing consumes
vast amounts of water
• Recovered frac fluids present
an environmental challenge
• Coal Bed Methane
• In-situ water must be
evacuated
• Evacuated water presents an
environmental challenge
GAS OPPORTUNITIES ARE HUGE …
AND WATER SOLUTIONS ARE NEEDED
Hydrofrac Zone
Well is turned
horizontal
Shale
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15. WATER WITHDRAWAL BY POWER PLANT
TECHNOLOGY
0
100
200
300
400
500
600
700
800
900
Nuclear Coal Oil Gas Simple
CT
CC IGCC Solar
Thermal
Hydro Solar PV Wind Biofuel
WaterUse,gal/MWh
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Sources: July 2009 EPRI, Technology R&D Efforts Related to Energy and Water Linkage;
Black & Veatch data.

16. Water scarcity is demanding new solutions
• Integrate energy and water resource
planning / management
• Advanced technologies
• Alternative water supplies
• Conservation / efficiency
WATER SOLUTIONS /
STRATEGIES FOR ENERGY
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17. SUMMARY
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Widespread
Optimism
Safety #1 Gas Prices 
Economic
Recovery Thru
Gas
Distribution
Upgrade
Transport
Contracting
Availability /
Reliability
Water
Solutions

18. www.bv.com