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[Session 4] PANEL: Current Trends in Alternative Investments by Greg Murphy

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APAFS2019
19th PRIC

Published in: Economy & Finance
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[Session 4] PANEL: Current Trends in Alternative Investments by Greg Murphy

  1. 1. Energy Evolution November 2019
  2. 2. TORTOISE SUSTAINABLE PLATFORM Our strategies align with the following UN Sustainable Development Goals to help achieve sustainable energy and water sources More than 700 million people, or 10% ofthe world population, still live in extreme poverty and is struggling to fulfil the most basic needs like health, education and access to water and sanitation,to name a few Energy is central to nearly every major challenge and opportunity the world faces today. Be it for jobs, security, climate change, food production or increasing incomes, access to energy forall is essential Investments in infrastructure – transport, irrigation, energy and information and communication technology – arecrucial to achieving sustainable development and empowering communities in manycountries Climate change is now affecting every country on every continent. It is disrupting national economies and affecting lives, costing people, communitiesand countries dearly today and even more tomorrow The platform focuses on sustainability and impact strategies, harnessing years of investment expertise in infrastructure, water and the energy transition theme,including listed and private renewable energy infrastructure 2
  3. 3. TODAY’S TOPICS • More excited about the future of energy today than any time in the firm’s history – Transition to cleaner energy can happen quickly and economically – U.S. exporting low-cost energy to the rest of the world • How midstream energy is part of the solution • Tortoise is positioned to take advantage of this transition 3
  4. 4. ENERGY DEMAND IS INCREASING Total world energy demand has grown in 35 of the last 36 years Worldpopulation Global energy demand Source: Bloomberg, BP Statistical Review of World Energy 2019 4,500 5,000 5,500 6,000 6,500 7,000 7,500 8,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 WorldPopulation(millions) Milliontonsofoilequivalent 4
  5. 5. THE NEED TO REDUCE POVERTY AND EMISSIONS Source: IEA Energy Access Outlook 2017 Annual number of people gaining electricity access by fuel type 2000-2012 62 million 2012-2015 103 million 1 million people Coal Gas Oil Hydro Solar Geothermal Other Decentralized renewables Coal generation remains the dominate energy fuel source, offsetting emission reductions in other countries 5
  6. 6. FUTURE GLOBAL ENERGY NEEDS – ADDRESSING ENERGY POVERTY There are 1 billion people globally that do not have access to electricity while 53 countries, representing 1.6 billion people (21% of world population), consume less electricity per capita annually than a refrigerator on average As of 6/30/2019. Source: CIA, IEA Energy Access Outlook 2017,Whirlpool Average annual electricity consumption per capita 62 84 122 336 444 524 683 0 100 200 300 400 500 600 700 800 Madagascar Ethiopia Nigeria Bangladesh Pakistan Africa Whirlpool refrigerator 6
  7. 7. Power sector will play most significant role in the energy transition as it represents the single largest source of carbon emissions within the energy system. GLOBAL CARBON EMISSIONS ARE INCREASING Source: IEA, Switch. Data represents estimated 2014 global anthropogenic CO2 emissions Agriculture Industry 38% 19% Transportation 25% 17% Power generation Billion tonnes of CO2 7
  8. 8. U.S. CARBON EMISSION REDUCTIONS OVER THE LAST 10 YEARS 8 Source: BP Statistical Review 10-Year Change in C02 Emissions by Top 10 Emitters 2,500 2,000 1,500 1,000 500 - (500) (1,000) China India Iran Saudi Arabia South Korea Canada Russia Germany Japan US MillionstonnesofCarbonDioxide
  9. 9. NOT ALL FOSSIL FUELS ARE CREATED EQUAL Natural gas emits approximately half the CO2 hard coal 44%of the UN’s CO2 emission reduction goal for 2030 could be met by converting coal consumption to natural gas Source: EIA, EPD 0 50 100 150 200 Carbon emissions by sources 250 Wood Coal (anthracite) Oil sands Diesel fuel Gasoline and heating oil Propane Natural Gas PoundsofCO2perMMBtu 9
  10. 10. ENERGY SUPPLY HAS EVOLVED Major shifts in the source of energy consumed occur over time, though the increase in global demand for energy remains a relative constant 10 Natural Gas Biofuels (wood) HydropowerCoal Nuclear As of 6/30/2019. Source: Vaclav Smil and BP Statistical Review of WorldEnergy Crude oil Renewables Global consumption of energy (%) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1800 1808 1816 1824 1832 1840 1848 1856 1864 1872 1880 1888 1896 1904 1912 1920 1928 1936 1944 1952 1960 1968 1976 1984 1992 2000 2008 2016
  11. 11. AS MIDDLE CLASS POPULATION GROWS, ENERGY SOURCE MATTERS 11 Energy transition propelling growth of global middle class population while lowering emissions Source: Brookings Institute, BP,Federal Reserve Bank of St. Louis, TCA. These charts contains projections, there is no guarantee these projections will be met. 0 1,000 2,000 3,000 4,000 5,000 6,000 2015 2020E 2025E 2030E MiddleClassPopulation(millions) 0 5,000 10,000 15,000 20,000 25,000 30,000 2005 2010 2015 2020E 2025E 2030E 2035E 2040E Emissions(milliontonnesofCO2) China and India emissions 35,000 Middle class population NorthAmerica Europe LatinAmerica Africa Asia Pacific CO2 emissions - high case CO2 emissions - lowcase
  12. 12. Source: BP Energy Outlook Source: Tortoise estimates based on BTU Analytics, EIA, EPD, IHS and Wood Mackenzie as of 9/30/2019 The projections on this page are based on industry estimates and are no guarantee of future outcomes. HOW THE U.S. IS PART OF THE SOLUTION 12 0 20 40 60 80 120 100 140 160 180 200 1970 1980 1990 2000 2010 2020e 2030e 2040e Billiontoe Global energy demand expected to grow 0 1 2 3 4 5 6 7 8 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e 2022e 2023e 2024e Millionbarrelsperday 18 16 14 12 10 8 6 4 2 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e 2022e 2023e 2024e Millionbarrelsperday Crude oil 0 15 30 45 60 75 90 105 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Billioncubicfeetperday U.S. production can help fill that demand Natural gas Natural gas liquids(NGLs) 2019e 2020e 2021e 2022e 2023e 2024e
  13. 13. U.S. EXPORTING LOW COST ENERGY TO THE REST OF THE WORLD 13 Crude oil exports After 40 years, U.S.-produced crude oil now exported outside NorthAmerica NGLs exports Ethane used for various consumer products now being shipped internationally Liquefied natural gasexports Liquefied natural gas now transported internationally Source: WoodMac, IHS.These charts contains projections, there is no guarantee these projections will be met. 0 5 10 15 20 25 2015 2020e 2025e 2030e 2035e 2040e Billioncubicfeetperday 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 2015 2020e 2025e 2030e 2035e 2040e Millionbarrelsperday 0 2 4 6 8 10 2015 2020e 2025e 2030e 2035e 2040e Millionbarrelsperday
  14. 14. INVESTMENT OPPORTUNITY $16.0 $14.0 $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 2019-20E 2021-25E CumulativeInvestmennt(trillions$) 2026-30E 2031-35E ~$15 trillion of global infrastructure investment expected by 2035 As of 6/30/2019. Source: BNEF, INGAA This page contains projections, there is no guarantee these projections will be met. Cumulative infrastructure investment forecast Power generation Transmission & distribution North American MidstreamInfrastructure 14
  15. 15. TORTOISE IS A SOLUTIONS PROVIDER Tortoise provides investors access to public and private strategies across the capital structure •Midstream energy •Energy transition •Renewable energy •Infrastructure •Global water Essential assets Impact 15
  16. 16. Tortoise is positioned to take advantage of this transition
  17. 17. www.tortoiseadvisors.com

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