NATURAL GAS PANEL

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NATURAL GAS PANEL
TX Association of Manufacturers Energy
Summit November 16-17, 2006
Commissioner Victor G. Carrillo Railroad
Commission of Texas
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Congressman Joe Barton (R-TX) Chair, Energy
Commerce Principal author, EPACT
There is no greater issue facing our world over
the next century than energy.
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James Carville Democratic political pundit
Energy independence is the No. 1 national
security issue No matter how we ask the
question, thats what comes up.
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Imports
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2006 Average Daily U.S. Crude Oil Imports
2,500
2,000
1,500
MB/D
1,000
500
0
Iraq
Angola
Canada
Mexico
Nigeria
Algeria
Ecuador
Venezuela
Virgin Islands
Saudi Arabia
Other Countries
Source U.S. Energy Information Administration.
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2005 U.S. Natural Gas Imports
Tcf/yr
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High/Volatile Energy Prices (Nov 15, 2006)

• NYMEX Crude Oil 59/barrel
• Down 25 from 78 in mid July
• NYMEX Natural Gas8/mmBtu
• Peaked at 14/15 last winter
• U.S. Gasoline _at_ pump 2.23/gal av
• Down from 3.025/ gal av (Aug 7)

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SOLUTIONS?
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Potential Resources Currently Off-Limits
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Offshore Gulf Coast
GOM production (daily) 1.5 mm barrels oil
(30) 10 Bcf natural gas (20)
(Does not include onshore TX production)
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Deep Gulf Offshore Potential

• Chevron/Devon/Statoil Jack-2 Well
• 270 miles SW of New Orleans
• 7,000 water depth
• 28,175 TD
• 6,000 b/d light, sweet crude

Lower Tertiary Trend Potential Recoverable
Reserves Several billion barrels
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TEXAS OVERVIEW

• gt 6,900 active operators 229,050 producing
  wells
• 149,100 oil
• 79,950 natural gas

• 1 producer of oil natural gas in the U.S
• 348 million barrels oil (2005)
• 5.9 Tcf natural gas (2005)
• gt 25 of total U.S. natural gas demand

• gt 42,000 mi. of nat gas transmission
  gathering pipelines
• 26 total U.S. refinery capacity (TX 4.9
  mmbopd)
• Oil gas petrochemicals 100 billion
  industry in TX

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Total U.S. Land Rig ActivityNovember 10, 2006
OK,LA,WY, NM,CO,CA,AK 594
TEXAS 771
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TX Gas Production
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16.6bcf/day 6.04 Tcf/yr
2006 Production Annualized
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Barnett Shale Active Permits Producing
WellsOctober 2006
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Gas Well Gas Production inNewark, E. (Barnett
Shale) Field1993 -- 2005
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Barnett Shale Activity

• 162 operators
• 5,205 producing wells
• 2,538 active well permits
• 2.0 Tcf produced since 2000
• USGS 28 Tcf

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Liquefied Natural Gas

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Existing Proposed LNG Facilities
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Proposed Onshore LNG Supply Terminal Projects
Sabine Pass, (Golden Pass LNG)
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TRADITIONAL ENERGY SOURCES Oil Gas Coal Nuclear
RENEWABLE ENERGY SOURCES Wind Power Biomass Solar
Energy Geothermal Fuel Cells
LNG Clean Coal
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CONCLUDING THOUGHTS

• Encourage responsible development of natural
  resources
• Emphasize domestic oil gas EP
• LNG will play increasingly significant role
• Encourage diversification
• Clean coal, nuclear, renewables
  (wind/solar/biomass)
• Support technology advances
• (seismic imaging, directional drilling,
  completion)

• If we do this as a nation
• Natural gas supply should stabilize, and
• price volatility should be attenuated