Energy Markets: A Framework

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Energy Markets: A Framework

CITIZEN ENERGY PARTNERS
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War in Ukraine

Source: IEA (2022), World Energy Outlook 2022, IEA, Paris https://www.iea.org/reports/world-energy-outlook-2022, License: CC

2
BY 4.0 (report); CC BY NC SA 4.0 (Annex A)

World

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Total Energy Supply
87% Fossil Fuels 0.2% Solar, Wind, Other 254 EJ Total Energy 1973 81% Fossil Fuels 2.2% Solar, Wind, Other 606 EJ Total Energy 2019 +139% -7% +1,000% % Change Source: IEA (2021), Key World Energy Statistics 2021, IEA, Paris https://www.iea.org/reports/key-world-energy-statistics-2021, License: CC BY 4.0
1973 - 2019

Earth at Night

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Source: NASA Earth Observatory/NOAA NGDC

Natural gas demand by sector in India in the Stated Policies Scenario, 2000-2040

Source: IEA, Natural gas demand by sector in India in the Stated Policies Scenario, 2000-2040, IEA, Paris Licence: CC BY 4.0

https://www.iea.org/data-and-statistics/charts/natural-gas-demand-by-sector-in-india-in-the-stated-policies-scenario-2000-2040,

Buildings Transportation Other bcm 5 TODAY

Oil demand growth by sector, 2017-2030

Source: IEA, Oil demand growth by sector, 2017-2030, IEA, Paris https://www.iea.org/data-and-statistics/charts/oil-demandgrowth-by-sector-2017-2030, IEA. Licence: CC BY 4.0

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A Simple Framework for Energy Transition

Source: IEA (2022), World Energy Outlook 2022, IEA, Paris https://www.iea.org/reports/world-energy-outlook-2022, License: CC

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Lithium Demand by Scenario, 2020

- 2030

Kt of lithium carbonate equivalent

TODAY

Source: IEA, Committed mine production and primary demand for lithium, 2020-2030, IEA, Paris https://www.iea.org/data-andstatistics/charts/committed-mine-production-and-primary-demand-for-lithium-2020-2030, IEA. Licence: CC BY 4.0

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Lithium Price Rate of Change %

% Change

2022

Source: IEA, Scale of price increase for selected energy transition minerals and metals, IEA, Paris https://www.iea.org/data-andstatistics/charts/scale-of-price-increase-for-selected-energy-transition-minerals-and-metals, IEA. Licence: CC BY 4.0

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Change in investment by different groupings of oil and gas companies, 2022 vs 2019

Source: IEA, Change in investment by different groupings of oil and gas companies, 2022 vs 2019, IEA, Paris Licence: CC BY 4.0

https://www.iea.org/data-and-statistics/charts/change-in-investment-by-different-groupings-of-oil-and-gas-companies-2022-vs-2019,

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2022E ($B USD)

Global upstream spend 2010 - 2020

Oil Demand in the Sustainable Development Scenario

Source: IEA, Paris https://www.iea.org/data-and-statistics/charts/global-investments-in-oil-and-gas-upstream-in-nominal-termsand-percentage-change-from-previous-year-2010-2020, and https://www.iea.org/data-and-statistics/charts/global-oil-demand-inthe-sustainable-development-scenario-and-decline-in-supply-from-2019-to-2040,

4.0 11
IEA. Licence: CC BY
Oil Since 1861 12 $120 Ceiling $20 Floor Source:
Store
Crude
Ron Griess, The Chart
Crude Oil Since 1969 (adjusted for inflation) $120 $40 $80 Key Events 1. 1972 – 1973 Oil Embargo 2. Inflation peak: 14% in 1980 3. China Joins WTO 1 2 ~2001 - Present Supply shortfalls drive rising prices that enable the rapid development of U.S. shale New price band established between ~$45 and ~$110 13
The Chart Store 3
Source: Ron Griess,

U.S Ten-Year Treasury Yield 1954 - 2003

14 Source: Ron Griess, The Chart Store
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Oil
1970
1970 1980 $3.35 $32.50 1 2 Crude Oil $ / bbl Source:
The Chart Store
Crude
Prices in
- 1980
Ron Griess,
16 Nominal Value of $100 $215.89 $179.08 $148.02 $121.90 $90 $110 $130 $150 $170 $190 $210 $230 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Nominal Value of $100 at Different Rates of Inflation 8% 7% 6% 5% 4% 3% 2% 1%

Energy prices impact everything

Source: World Economic Forum, https://www.weforum.org/agenda/2022/09/inflation-rising-food-energy-prices-economy

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U.S Drilling Rig Count 1970 - Present

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Global Conventional Resource Discoveries & Exploration Spend

% change y/y

Chart Details

Annual new non-shale exploration discoveries, and exploration spend as a percentage of totals Drivers

Combination of low prices and climate pressure drives exploration spend to lowest level in decades

No immediate impact, but sets up a dangerous set of circumstances in the future

Source: IEA, Global conventional resources discoveries and exploration spending as % of total upstream investment, 2010-2020, IEA, Paris https://www.iea.org/data-and-statistics/charts/globalconventional-resources-discoveries-and-exploration-spending-as-of-total-upstream-investment-2010-2020, IEA. Licence: CC BY 4.0

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Oil Demand Growth – JP Morgan

20 Source: JP Morgan

Oil Inventories and OPEC Production vs Quotas – JP Morgan

21 Source: JP Morgan
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