1. China and Its Impact on World Energy Consumption Dan Westbrook

2. Energy Consumption 2004

3. Energy Consumption vs. World Population 2004 Energy Consumption

4. $GDP*/BOE * 2004 GDP $PPP

5. Source: UN and DOE EIA Energy use grows with economic development US Australia Russia Brazil China India S. Korea Mexico Ireland Greece France UK Japan Malaysia energy demand and GDP per capita (1980-2002)

6. Source: UN and DOE EIA Energy use grows with economic development US Australia Russia Brazil China India S. Korea Mexico Ireland Greece France UK Japan Malaysia energy demand and GDP per capita (1980-2002) 4x GDP / 2X Energy

9. Issues Going Forward Political unrest / security of supply Growth in world economy, especially in India and China (and growth in overall population) Environmental issues – carbon tax? Development of new sources of energy

10. Thank You

11. Backup

16. 1.~ 23% of world’s primary energy comes from natural gas, 6% from Hydro, 6% from Nuclear, 28% from Coal, and 36% from oil 1.Oil R/P is ~ 40 (and it has been ~ 40 for the last 10 years, was actually lower prior to that time Gas R/P is ~ 65 (and has been over 60 for the last 20 years) Coal R/P ~ 200 yr 1. Today – production is ~ 82 mmbod spare capacity is few % (1 to 1.5 mmbod) 2. Early 80’s production was ~ 60 mmbod spare capacity was on the order of 25% 3.On a real basis, using CPI as the adjustment, the peak price for oil was in 1979 when it was just Almost $100/bbl 7.Average energy growth is just over 2% per year, average oil growth is just under 2% per year. 8.Main drivers for increase in price of oil: 1.Increased consumption – lower spare capacity 2.Geopolitical issues (Nigeria, Venezuela, Iraq, Iran 3.Hurricanes in 2005 4.Oil as a financial instrument 9.World oil reserves have been increasing as far back as you go. Due to improved exploration and Improved recovery 10.Carbon emissions up 4.8% in 2004, and 2.9% in 2005 11.Oil inventories are actually above average since Jan05 12.Refining capacity: global distillation usage was 86% in 2005, only 700,000 bod capacity added in 2005 13.Nuclear power plants: 4 new in 2005, 2 in Japan, 1 in Korea, 1 in India 14.Wind produced 0.7% of world’s electricity in 2005. BUT 30% growth / yr over last 10 years. US got 0.4% of electricity from wind 15.Only about 20 to 25% of the worlds energy is used for transportation, more in developed countries, Less in developing countries 16: Hubbard prediction: somewhere between a few years and 20 (non-open) or 30 years (OPEC) 17: CO2 atmospheric concenrtration was 280 ppm several hundred years ago, now 380 ppm