1. The Outlook for Energy A View to 2030 & Impact Of Global Geopolitics Presented by: Dr. Eduardo G. Del Valle EGDV CONSULTANTS, INC Miami, May 5, 2011 Florida International University 29 th Annual Journalist & Editors Workshop on Latin America and the Caribbean “Latin America’s Energy Future”

2. Energy sources evolve; new technologies have huge influence on both supply and demand Quadrillion BTUs Global Demand By Fuel 18001900200018501950 Biomass Coal Oil Gas Nuclear Other Renewables Source: Smil, Energy Transitions; ExxonMobil Hydro Standard of living improved dramatically over past century driven by technology and abundant energy. By 2030 demand projected at 6 times 1950 level with increasing diverse energy mix; GDP 20 times 1950 level 1901- First gasoline- powered automobile mass produced 1884- First steam turbine 1980 – First U.S. windfarm consisting of 20 turbines built in New Hampshire 1954 – Modern silicon solar cell invented 1859- First oil well drilled in Titusville, PA

3. 3 100 countries 15 demand sectors 20 fuel types Energy Outlook Basis technology & policy

4. Geopolitical Forces/Conflicts that Impact Outlook Resource nationalism is making access to new reserves more difficult and/or more costly Examples: Russia, Venezuela, Bolivia, Ecuador, some African countries Revolution in communications is increasing societal expectations in less developed countries and social pressures for more freedom and a better life are building 400 million Chinese with capacity to move from bicycle to vehicles. From cooking with wood to cooking with electricity India will follow Cumulative environmental impact? Chinese oil companies aggressiveness in pursuit of new energy reserves is pre-empting Western Oil companies from economically accessing new supplies. Prrivate sector companies cannot compete with promises of additional Chinese government assistance for economic and social development Up to now Western government have abastained from reacting, but will this posture last?

5. Geopolitical Forces/Conflicts that Impact Outlook The complex corporate social difficulties that arise working in unstable political/social environments that are prone to corruption and human rights violations What is the appropriate responsibility of oil companies to ensure that human rights are respected and the monies generated from their investment are properly channeled for economic development Should Western democracies develop legal protocols to assist oil companies in these complex balancing acts Combination of producing countries budgetary pressures coupled with climate change uncertainties are making longer term planning and capital investment decisions increasingly complex and risky Non-Opec production has been unable to keep up with growth in demand– not a good sign Legal and regulatory framework: Climate change lesgislation, subsidies, environmental restrictions, government mandates and taxation Middle East Instability – where will it lead? There is no known technology today that is expected to have any major impact in altering the projected energy mix by 2030

6. 6 Population + Improved Standard of living Drives Energy Demand Growth Billion PopulationGDPEnergy Demand Trillion 2005$Quadrillion BTUs Average Growth / Yr. 2005 – 2030 0.9% Average Growth / Yr. 2005 – 2030 2.8% Average Growth / Yr. 2005 – 2030 1.2%

7. China India Other Non OECD Latin America Africa Middle East Economic Growth Fastest in Non-OECD Trillion 2005$ GDP Europe OECD Other OECD United States Non OECD 4.9% ~ 40% of GDP by 2030 OECD 2.0% Average Growth / Yr. 2005-2030 China and India grow at 6%/yr Source: ExxonMobil Energy Outlook

8. Expanding Economies Drive demand up by 35% Quadrillion BTUs OECD United States Europe OECD Other Quadrillion BTUs Non OECD China India Middle East Other Latin America Africa OECD energy demand flat due to increased energy efficiency, even as GDP rises 60% Non OECD demand up > 70%. Higher electricity demand and increased vehicle ownership due to rising prosperity Source: ExxonMobil Energy Outlook

9. 9 167 300 Quadrillion BTUs 2005 2030 1.3% 0.9% 0.3% 1.7% Transportation Demand by Sector -- Efficiency is key Demand would have grown by 84 MBDOE were not for efficiency gains Transportation consumes 70% of oil demand

10. Energy Efficiencies to Accelerate Rate of energy efficiency improvements expected to dramatically accelerate by 50% driven by higher prices and advances in technology Source: Energy Information Administration Efficiency gains saves 55 MBDOE

11. Transportation Demand Grows 40% MBDOE Demand Light Duty Heavy Duty Aviation Marine Rail Commercial Personal Light Duty Demand MBDOE Non OECD OECD Growth heavily concentrated in Asia. Rising personal income produces steep increase in vehicle ownership, up by 80% by 2030 400 million vehicles more than today, but demand offset by efficiency gains Source: ExxonMobil Energy Outlook

12. Electricity Demand will grow by 80% k TWh By Sector Transportation Heavy Industry Other Industry Residential Commercial By Region k TWh Non OECD OECD Demand will grow 150% in NonOECD in conjunction with broader prosperity and rising income Source: ExxonMobil Energy Outlook

13. 13 $0/ton CO 2 $30/ton CO 2 2010 cents/kWh Future U.S. Power Costs Baseload, Startup 2025 $60/ton CO 2 Thermal PV

14. 14 k TWh By Generation Wind & Solar Oil Coal Nuclear Other Renewables Gas Global Capacity GW Power Generation Mix Evolves Wind Solar Nuclear Global Capacity Utilized

15. Power Generation by Fuel Quadrillion BTUs North America Quadrillion BTUs EuropeAsia Pacific Quadrillion BTUs Oil Gas Coal Nuclear Renewables Source: ExxonMobil Energy Outlook Natural Gas and Coal will show the greatest growth. 90% of new power gen in China will be from Coal. A big impediment and source of conflict with the objective to reduce GHG.

16. Energy-Related CO 2 Emissions Tons per Person Emissions per Capita 2005 2010 2030 Billion Tons By Region OECD Other Non OECD India China Energy related CO2 emissions in Non-OECD countries exceed by 40% those of OECD, and are doubling those of OECD by 2030 Source: ExxonMobil Energy Outlook

17. 0.7% Quadrillion BTUs Global Demand by Fuel 2005 2030 0.7% 2.0% 0.4% 2.3% 2.1% 9.9% World Average Growth/Yr. ’05 to ’30 – 1.2% Source: ExxonMobil Energy Outlook Oil, Gas and Coal will still provide over 80% of total energy demand by 2030

18. 18 MBDOE Liquids Demand MBDOE Liquids Supply Non-OPEC Crude & Condensate Canadian Oil Sands NGL, OPEC Condensate, Other Biofuels Global Liquids Liquids Supply 2005 OPEC Non-OPEC 2030 Average Growth / Yr. 2005 – 2030 0.8% ~29 ~35 ~36 OPEC Crude ~27 Dependence on OPEC will continue to grow

19. 19 Development Challenges and Solutions 8 billion people 100% increase in global GDP 35% increase in energy demand 300 quadrillion BTUs saved via efficiency or equivalent to 55 MBDOE All reliable, affordable energy supplies needed World development continues, while lives improve and economies grow Increase Efficiency Expand Supplies Mitigate Emissions