TCU EnergyNew Institute Institute

Teaching and Research For Our Domestic Energy Future

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Rees Jones Hall The Global Dilemma

Energy

Food

Water **Global Energy Reality** • U.S = 100 Q-BTUs 85% FF, 8% Nuclear, 7% Renewables • World = 500 Quads 20% U.S., 17% China (2x), 16% Europe • 2030….600 Quads!!!

Who will produce it? How will they produce it? Life In the Fast Lane!

U.S. OIL IMPORTS

Averaging $750 million to almost $1 Billion a day!!!

WE ARE A BUYER!!!

Our Debt approaches $17 Trillion! Global Sellers-Buyers

What will the U.S. be by 2030? The U.S. Game Changer!!

Several layers of steel tubes encased in cement protect groundwater supplies

Protective casing to shale

Depth = 2 Miles Multistage Hydraulic Fracturing Domestic Independent Producers ??

Shale Discoveries = Barnett, Haynesville, Fayetteville, Marcellus, Bakken, Eagle Ford, Niobrara, Antrim, etc Abundance-Energy Security - 100+ years of secure natural gas resource

Game Changer!! “The Big Boys” • Jan ‘10.. TOTAL & Chesapeake—Now #3, $2.5 Billion! • March 10’… - & XTO Energy—$41 Billion!! • May ‘10..Quicksilver Resources partners with ENI (Italy) • May ‘10... Shell …$4.7 B! buys East Resources (Marcellus) • Nov ‘10… Chevron acquires Atlas Energy $4B! (Marcellus) • Dec ‘10 …CNOOC ….1B! in Chesapeake Energy-Barnett • Jan ’11..Quicksilver lease agreement-Reliance Energy (India) • Feb 1 ‘11… CNOOC -1/3 of Niobrara (Colo) with CHK • May 5 ‘11… Chevron Buys Chief O&G in Marcelleus • Jan 2012… Marubeni (Japan) in Eagle Ford (52,000 acres) • Feb 2013… CNOOC -1/2 of Chk in northern Oklahoma

Are “The Big Boys” now “In the Driver’s Seat” ? Shale Plays: What to do?

Regulation or Incentives?

• Water Use & Recycling • Size of Fracking Operations • Methane Emissions • Disposal & Earthquakes • Well Casing & Cement Design • Other Remember: It’s Domestic!

The Future!!

$3.50-$4.50 Shale Oil

Nat Gas Prices

Alaska…Shublik Shale!

The Wolfberry! Expanding Markets!!

Back-Up Fuel-Renewables

Base Fuel-Electricity CNG Transportation Fuel LNG

Ultra Clean Hydrogen Source

Clean Air-Clean Fuel For Texas!! Alternative Fueled Vehicles AFV’s Choosing Natural Gas Vehicles

• Do we have enough natural gas?

• Do we have the infrastructure?

• What are the benefits?

• What are the costs? NGVs = Should we go there!!

>1,000

1.8 b gal/yr

112 to 800!

>3,000 UPS—1000 New LNG Trucks! Building 4 New Filling Stations in: Knoxville-Nashville-Memphis-DFW NGVs: The Real “Green Vehicles”

• Natural Gas vehicles…

Reduce CO 2 emissions 20-30%

Reduce CO emissions 70-90%

Reduce NOx emissions 75-95%

Reduce Particulate Matter emissions 90%

Reduce VOC emissions 89% …compared to or diesel 2009-Today

• Altech Eco • Encana Oil & Gas • Pinnacle CNG Systems, LLC • American Honda Motor Co • Enterprise Rent-A-Car • Purple Land Management • American Lung Association • Emissions Solutions, Inc • Pioneer Resources • ANGI-Energy Systems • EOG Resources • Quicksilver Resources • Atmos Energy • EWI Risk Services • Republic Services, Inc • AT&T, Fleet Operations • Fort Worth Chamber • SiEnergy Co. • BAF Technologies • Fort Worth Transit Authority (The “T”) • Smith Family Investments • Barnett Shale Energy Education Council • Freese & Nichols engineering • SWEPCO USA • BNSF Railroad • Garland ISD • TCU Energy Institute • Burns & McDonnell Engineering • IPAA –Ind. Petrol. Assoc of America • TCU Institute for Environmental Studies • Chesapeake Energy • Jetta Operating Company • Tandy Center For Executive Leadership • City of Fort Worth • Jack B. Kelly, Inc • Texas Gas Association • Clean Energy Fuels • J-W Power Company • Trillium, USA • Coalition, Inc • Marriott Hotels, USA • UPS • CoServe Inc • NASCO (A) North America SuperCorridor • UT-Arlington Research Institute • Crumbie Energy Group • National Fuel Marketing • Vista Sand • Cygnet Inc • Navistar, Inc • Vodik Labs • Dale Gas Partners • North Central Texas Council of Gov’ts • Western Production Co. • Dallas Transit—DART • NGV America • Wynne Motor Coaches • Devon Energy • NGV Texas • XTO Energy • DFW Clean Cites • Inc • Zeit Energy • Dillon Transport • Pioneer Resources

Mission: Promote Natural Gas Transportation Markets!! NGVs in Austin

State Capitol

Demo

Clean Air-Clean Fuel For Texas!! State Legislators The Texas NGV Clean Transportation Triangle—10% of US Business Transportation Sector

Texas SB-20

• 20% of TERP Money (Texas Emissions Reduction Plan)--$20-$30 million

• 20% for new stations offering public LNG and CNG—grants for 20 new stations

• 80% for government rebates for fleet owners for HDVs-500 Trucks !

Clean Air-Clean Fuel For Texas!! National NGV Stations to Get Natural Gas Fueling Outlets

Leading the Pack!!

150 New NGV Travel Stations!! Shell & TA Centers!

Shell Oil and chain TravelCenters of America agreed to build and operate at least 100 natural gas fueling stations for heavy-duty trucks along U.S. Interstates. GE & Chesapeake "CNG In A Box” Lowers Cost!!

**GE Home Refueling Unit--$500!! 60 million homes already have Nat Gas! 3M to Make Fuel Tanks for Natural Gas Vehicles

Less-expensive, higher-performance, lighter, and higher-capacity fuel tanks—which it hopes will jump-start the market for natural gas-fueled vehicles. Low Pressure Tanks!!! 13 Governors Support NGVs

______

Gary R. Herbert Paul R. LePage Governor, State of Utah Governor, State of Maine

______April 27, 2012 Susana Martinez Earl Ray Tomblin Governor, State of New Mexico Governor, State of West Virginia RE: Request for Information - Multi-State Natural Gas Vehicle Procurement

______For many Americans, high gasoline prices create a financial strain in an already difficult economic Steven L. Beshear Rick Perry environment. As governors, we share the concerns of citizens and are committed to finding solutions. A Governor, State of Kentucky Governor, State of Texas bipartisan partnership between governors and auto manufacturers in the U.S. makes sense and has the potential to create new options for alternative fuel vehicles and transportation fuel diversity.

Abundant, affordable, clean-burning natural gas presents a tremendous opportunity for America to ______end, we are committed to explore the aggregation of our annual state fleet vehicle procurements to John R. Kasich Phil Bryant Governor, State of Ohio Governor, State of Mississippi provide an incentive to manufacture affordable, functional natural gas vehicles. In coordination with this letter, we are releasing to all auto manufacturers in the U.S. a request for information (RFI) intended to assist our states in gathering the necessary information for developing a multi-state solicitation.

Recently, automakers announced several new original equipment manufactured natural gas vehicles. ______

We believe this multi-state effort can create even more momentum. We appreciate your thoughtful Bobby Jindal evaluation of our upcoming RFI and the opportunity to work together to make American energy security Governor, State of Louisiana a reality.

Sincerely,

______

Mary Fallin John Hickenlooper Governor, State of Oklahoma Governor, State of Colorado Now 24 Governors!!

______

Matthew H. Mead Tom Corbett Governor, State of Wyoming Governor, State of Pennsylvania

Honda & Detroit

2013 GM, Ford and Chrysler

2014 F-150!!!

Since 1999 NGdiesel • Nat Gas injected into Diesel • 50%-60% Nat gas to Diesel • Dispersion Efficiency • Reduces Fuel Consumption • Reduces Price • Reduces Emissions

GE pushes natural gas/diesel power for drill rig generators...Nov 12, 2013 (CNBC) Natural Gas

NG Diesel

Cleaner, Cheaper, Efficient General Dempsey-Chair, Joint Chiefs of Staff June 27, 2012—Ft. Worth

Domestic Military Bases Today Change?? Tomorrow?? Imports Rare Earth Elements “Green Technologies” Oil

China…97%

Opec--$1B/day

Batteries, Magnets, Control Rods, Lasers China Looks to West For Energy

Jan 2011-Chesapeake, CNOOC strike second shale deal for $1.3 B

March 2013 - China Petrochemical (Sinopec) & Chesapeake for $1 B

March 2013 – CNOOC buys NEXEN (Canada) for $15 B

Past 2 years– Asian companies have completed $31 B in North American Acquisitions and Ventures …Wall Street Journal 2/27/2013

*China’s ENN—500 new NGV Refueling Stations in U.S. (Reuters, March 2013)

*Canada, Mitsubishi and PetroChina plan new export terminal in Kitimat, BC

U.S. surpasses Russia as world’s top oil and natural gas producer with output at 25 million barrels per day...Oct 2013 Natural Gas Exports??

Louisiana Cheniere Energy It’s a Global Play

And a Global Market!! Nat Gas to Mexico Buyer!!

2012…80% gas imported was from U.S. New Los Ramones Pipeline South Texas to Guanajuato, Mexico Projected = 3 billion cf/day 2015!!

Seller!! Who’s against U.S. Gas Exports?

Others?? ExxonMobil Energy Outlook to 2040 • Natural Gas to Outpace all Energy Sources through 2040 increasing by 65%. • Asia will lead the way in NG Consumption • Global Demand for Natural Gas will increase by over 200 Bcf/day. • Globally, Natural Gas will overtake Coal for Electrical Generation. • U.S. to be a net Nat Gas Exporter by 2020! Nat Gas to Hydrogen: The Energy End Game Global Sellers-Buyers

What will the U.S. be by 2030? Who’s in the Driver’s Seat? We ARE!!!!! 1. Grass Roots NGV Organizations in U.S. 2. Fleet Conversions-Large and Small Companies 3. Infrastructure/Vehicles--Detroit 4. Future-Jobs, Business Growth 5. It’s Domestic!!

That’s what happened 100 years ago!

1909 Model T Dr. Ken Morgan, Director www.energyinstitute.tcu.edu Our Energy Fuel Use

U.S. Consumption of Alternative Fuels Growth of NGVs

• There are about 140,000 NGVs on U.S. roads today and more than 14.8 million worldwide . • According to the American Public Transit Association, nearly one-fifth of all transit buses were run by compressed natural gas (CNG) or liquid natural gas (LNG) in 2012. • The fastest growing NGV segment is waste collection and transfer vehicles. • More than 35 airports in the U.S . have natural gas vehicles in their own fleets. • NGV Global estimates there will be more than 50 million natural gas vehicles worldwide within the next 10 years , or about 9% of the world transportation fleets

Source: NGV America