It is a well-known fact that much of the world's energy is consumed in North America. What is perhaps less well-known is that much of the world's energy is also produced on the continent.
Solar
The United States is one of the most important solar markets in the world. The country is expected to add 3.3 GW of capacity in 2012, a 74% increase over 2011.
Canada and Mexico are building up their solar arsenals as well. Canadian Solar recently closed a deal to develop 16 power projects in Ontario, while Mexico is striving to generate 5% of its electricity from solar power by 2030.
Nuclear
The U.S. is home to the most nuclear power plants in the world. Its 104 active plants produce 101,240 megawatts of electricity. Canada has 18 plants, and Mexico has two.
Nuclear generation has tripled in the U.S. since 1980, though it has basically leveled off over the past six years. The last new reactor to come online in the U.S. was in Tennessee in 1996. We may see an uptick in those power generation numbers sooner rather than later, however, because this past February, the U.S. Nuclear Regulatory Commission issued construction approval to Southern Co. to build two new reactors. It was the first such approval issued in over 30 years.
Coal
Churning out around 1 billion tons of coal a year, the U.S. is the second largest coal producer in the world after China. It ranks fourth in the world in coal exports; Canada is seventh.
U.S. coal reserves are vast. At the current rate of use, the country's 261 billion tons of coal reserves could last 235 years. Though its numbers pale in comparison to the U.S., on a global scale Canada also has significant reserves, totaling close to 10 billion tons.
Oil
The United States is the third largest oil producer in the world, after Russia and Saudi Arabia. Canada comes in sixth, and Mexico is seventh.
| Country | Oil Production |
|---|---|
| United States | 9,688,000 |
| Canada | 3,483,000 |
| Mexico | 2,983,000 |
Source: CIA World Factbook. Data is from 2010, most recent numbers available.
Production in all three countries is expected to climb in the coming years. The potential is especially great for Mexico and Canada. Our neighbor to the north is home to the world's third largest petroleum reserves, and our neighbor to the south looks like it is finally opening its oil industry up to foreign expertise.
And of course here at home, we are experiencing our own oil boom thanks to advances in technology and drilling techniques.
Natural gas
All three North American countries are ranked in the top 20 of the world's natural gas producers. The U.S. is first, Canada is fourth, and Mexico is 16th.
The American shale plays really dominate this story. Across the country, natural gas is being produced at levels so high that the price of methane has been completely decimated in recent years. As a result, there is more and more support to build out infrastructure that supports natural gas vehicles. Coal-fired power plants are also being converted to burn natural gas, and there is currently a fierce debate about the value of exporting liquefied natural gas versus consuming it domestically.
Geopolitical risk
Arguably the most stable region in the world, there is still risk investing in energy in North America, the two biggest sources being politics and public opposition.
In the United States and Canada, there is significant opposition to fossil fuel production and the build-out of energy infrastructure. Whether it be the source of energy, like Canada's oil sands, or the methods used in extraction, like hydraulic fracturing, environmental concerns have quashed a number of initiatives. The midstream sector has been the most visible target of this opposition of late, and there is no longer such a thing as a sure bet for pipeline projects in North America.
Public opposition is not limited to fossil fuel development. There is also opposition to government subsidies for renewables, which some claim are absolutely necessary to grow those industries. While most people are not against solar power or biofuels per se, many do question the wisdom of government intervention in said projects.
In Mexico, the most recent presidential election will ultimately decide the extent to which foreign energy companies can partner with its state-owned oil company, Pemex. The company has had a monopoly on oil production in the country since the late 1930s, and contracts with other producers have been few and far between.
Players
Suncor Energy (NYSE: SU )
Suncor is Canada's biggest energy company. The company is heavily invested in developing Alberta's oil sands; more than half of its production in 2011 came from the controversial source. Suncor expects to continue to ramp up production in the oil sands this year, growing output from 304,700 barrels of oil equivalent per day to a range of 325,000 to 355,000 BOE per day.
Continental Resources (NYSE: CLR )
Continental is one of the top 10 petroleum liquids producers in the U.S. The company holds the largest land position in the Bakken shale and is growing production at a break-neck pace. Output increased 66% from 2010 to 2011 and was up 14% sequentially for the most recent quarter.
Chesapeake Energy (NYSE: CHK )
Chesapeake is having one heck of a year -- and not in a good way. A major cash shortfall has forced the company to liquidate assets in an attempt to raise billions of dollars. On top of that, a recent Reuters report revealed that CEO Aubrey McClendon and Chesapeake's board of directors seemingly forgot they were running a public company responsible to shareholders.
The company is the second largest producer of U.S. natural gas, and though the future of Chesapeake is a very large question mark right now, it holds some of the most important assets in the U.S. and is still worth watching.
Enbridge (NYSE: ENB )
Enbridge is Canada's largest midstream outfit by market cap, barely larger than its rival TransCanada. These days, it's tough to tell which Canadian pipeline giant has the brightest future. Both companies are trying to gain approval for major projects and are coming up short.
At least in the case of Enbridge, the Canadian government supports its Northern Gateway pipeline, even if environmentalists and local citizens don't. TransCanada must win approval from the U.S. State Department for its second bid for its Keystone XL pipeline, which also faces intense opposition from environmentalists and American citizenry.
Schlumberger (NYSE: SLB )
Schlumberger is the world's largest oil-field-services company. It is also one of the few companies that has had access to Mexico's oil industry. Schlumberger has leveraged its technological expertise to successfully complete projects across the country, producing crude from an aging field and utilizing hydraulic fracturing in the northern part of the country, among other efforts. It is currently in the running to win contracts in 22 fields in Mexico.
Suggestions for further reading:
- Mexico's Changing Energy Picture
- A Little Truth About Energy
- Let's Let Canada be our Economic Mentor
- Canada Takes the LNG Lead
- America's Pipe Dream
No comments:
Post a Comment