1. Mazama ScienceClean and Green Energy Forum, Dana Point, CA, Dec 3-4, 2012 Oil and Gas Trends Educated guesses about future prices. Jonathan Callahan Mazama Science M AZAMA S CIENCE Data – Information – Knowledge

2. Mazama ScienceClean and Green Energy Forum, Dana Point, CA, Dec 3-4, 2012 2 Oil is a global market. Oil is a globally traded commodity. Humans use +/- 85 million barrels per day. Some nations are net oil exporters, others net importers.

3. Mazama ScienceClean and Green Energy Forum, Dana Point, CA, Dec 3-4, 2012 3 Top oil exporting nations: Not many free market democracies. OPEC mb d

4. Mazama ScienceClean and Green Energy Forum, Dana Point, CA, Dec 3-4, 2012 4 Top oil importing nations: US per capita consumption is 10x that of China. mbd

5. Mazama ScienceClean and Green Energy Forum, Dana Point, CA, Dec 3-4, 2012 5 The US is the #1 oil importer. We import more crude oil than we produce.

6. Mazama ScienceClean and Green Energy Forum, Dana Point, CA, Dec 3-4, 2012 6 China is the #2 oil importer. As nations develop, consumption rises rapidly.

7. Mazama ScienceClean and Green Energy Forum, Dana Point, CA, Dec 3-4, 2012 7 India is the #5 oil importer. When will Indian consumption slow down?

8. Mazama ScienceClean and Green Energy Forum, Dana Point, CA, Dec 3-4, 2012 8 Factors affecting long term prices: Demand in developing nations is rising rapidly. Demand in OECD nations is falling slowly. Global exporters are “not our people”. Over 2-20 years: upward pressure on oil prices

9. Mazama ScienceClean and Green Energy Forum, Dana Point, CA, Dec 3-4, 2012 9 Natural Gas is a local, seasonal market. The US natural gas market is mostly landlocked. Americans use +/- 65 billion cubic feet per day.

10. Mazama ScienceClean and Green Energy Forum, Dana Point, CA, Dec 3-4, 2012 10 The US is the #1 natural gas consumer. We are approaching zero net imports.

11. Mazama ScienceClean and Green Energy Forum, Dana Point, CA, Dec 3-4, 2012 11 Natural gas storage provides a seasonal buffer.

12. Mazama ScienceClean and Green Energy Forum, Dana Point, CA, Dec 3-4, 2012 12 Gas in storage has a strong seasonal cycle.

13. Mazama ScienceClean and Green Energy Forum, Dana Point, CA, Dec 3-4, 2012 13 This past winter,storage didn't empty out.

14. Mazama ScienceClean and Green Energy Forum, Dana Point, CA, Dec 3-4, 2012 14 Forecast says “full” is more likely than “empty”.

15. Mazama ScienceClean and Green Energy Forum, Dana Point, CA, Dec 3-4, 2012 15 Factors affecting short term prices: In recent years, storage is trending toward “full”. Forecast says “full” is more likely than “empty”. Storage is largely determined by weather. BUT!! Climate & weather are inherently unpredictable. Over 2-20 months: downward pressure on nat. gas prices