Energy Independence Study Prospectus

The Shale Revolutions Implications for North American Markets
A Multi-Client Study Prospectus

THE ROAD TO U.S. ENERGY INDEPENDENCE:
THE SHALE REVOLUTION AND ITS IMPLICATIONS FOR
NORTH AMERICA'S ENERGY MARKETS
OVERVIEW
THE ROAD TO U.S. ENERGY INDEPENDENCE addresses the complex implications for North
American pricing parity, crude and product flows, refining behavior and energy policy that
will arise from increasing oil and gas production and falling imports. It features a two-day
Client Forum (see page 5 for agenda), along with a written report and online database.
BACKGROUND
After 40 years of largely unsuccessful policy attempts to reduce U.S. energy import dependence,
imports are now in structural decline. The lack of demand growth has certainly played a role and the
combination of past and future energy policies will soon usher in a period of declining demand. However,
the reversal in net imports is primarily due to an abrupt shift in supply trends resulting from a
combination of continued progress in drilling technology, the creativity of upstream entrepreneurs in
utilizing that technology on a well known resource base, and a price level that has made pursuit of these
higher-cost opportunities economically attractive.
The trend has been extremely powerful in the case of natural gas, as the U.S. market rapidly turned from a
future of large LNG imports to one where it has the potential to be the next major LNG exporter. The
revolution has now moved on to liquids both crude and NGLs and while the U.S. is likely to remain
an importer for some time, the volumes will be in decline from this point forward and the composition
(both source and quality) will be rapidly changing. In fact, much of the conventional wisdom regarding
pricing parity, crude and product flows, refining behavior and even energy policy may no longer be
true in this new U.S. energy world.
These trends will not be news to those paying
attention to press reports. However, many of the
specific implications for the industry are complex
and have not yet been fully analyzed until now.
With the upcoming multi-client study, THE
ROAD TO U.S. ENERGY INDEPENDENCE: THE
SHALE REVOLUTION AND ITS IMPLICATIONS FOR
NORTH AMERICA'S ENERGY MARKETS, PIRA is
undertaking such an assessment. The studys
findings will be provided to clients during a two-
day forum (see agenda on page 5), as well as
through a written report and online database,
where each key sector will be addressed in
detail.
Net Imports Fall 85% from 2005 to 2030
As Production Grows and Demand Begins to Flatline
0
5
10
15
20
25
1990 1995 2000 2005 2010 2015 2020 2025 2030
MMB/D U.S. Oil Demand, Supply and Net Imports
NGLs, Biofuels & Other Shale Crude Non Shale Crude Demand Net Imports
PIRA Energy Group, 3 Park Avenue, 26
th
Floor, New York, NY 10016-5989 (Tel) 1-212-686-6808 (Fax) 1-212-686-6628
Copyright 2012 PIRA Energy Group. All rights reserved.
1

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The study addresses wide ranging issues such as pricing parity relationships between U.S. crudes and
international crudes; the response of U.S. refiners to changing incentives to run light sweet vs. heavier
crudes; the outlook for U.S. oil products, NGL and natural gas exports; and even the macroeconomic and
policy implications of a world of ever-declining imports.
STUDY FEATURES
Due for release in September 2012, THE ROAD TO U.S. ENERGY INDEPENDENCE through a live
forum, comprehensive written report, and online database features:
PIRA's most likely outlook for North American liquids production, including shale crude and
NGLs by formation, conventional onshore and offshore production, and the outlook for Canadian oil
sands and conventional production.
A summary of the pipeline infrastructure expected to be in place to carry the above production to
market. The role of rail and trucking to supplement pipeline movements will also be addressed.
PIRA's North American oil demand outlook by product, including the potential impact of natural
gas use in transportation.
Crude oil supply/demand balances in the major PADDs. Combined with the outlook for
infrastructure, this provides an assessment on whether we are likely to see bottlenecks drive price
relationships.
The outlook for U.S. crude oil imports in total and by grade, with special focus on the Gulf Coast.
Supporting this assumption will be an evaluation of the incentives and constraints for medium/heavy
crude refineries to run higher volumes of light crude.
The outlook for product exports from the U.S. assuming no political restrictions.
The outlook for NGL balances and the prospects for propane and butane exports.
PIRA's most likely outlook for North American natural gas production, including shale gas by
formation, conventional onshore and offshore production, and the outlook for Canadian production
and exports to the U.S.
The demand outlook for natural gas, including domestic demand in power generation, industry and
residential/commercial, along with the prospects for natural gas penetration in transportation,
examining light and heavy vehicle markets separately.
Anticipated LNG exports from the U.S. and Canada by location. The study will also assess the
potential for GTL plants and other options for the conversion of gas to liquids.
The macroeconomic outlook consistent with all of this, including the prospects for energy-
intensive industrial production, and the likely evolution of the U.S. trade balance.
Reference Case policy assumptions on trade limitations, biofuels, and fuel efficiency, reflecting the
potential changes in policy as supply security becomes less important over time.
A price outlook for the major Atlantic Basin crude grades, products, and refining margins
along with natural gas prices at key hubs.
In addition to the Reference Case, an outline of the key assumptions with the greatest range of
uncertainty and the development of a series of alternative outcomes for volumes and pricing.
These assumptions cover:
a. Production volumes of liquids and gas including the potential of state or federal policy restrictions.

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b. Upside potential on demand resulting from a more powerful industrial sector renaissance.
c. Policy limitations on product and/or natural gas exports
Identification of the likely winners and losers in the energy industry and elsewhere in the North
American economy.
Forecasts carried to the year 2030.
THE ROAD TO U.S. ENERGY INDEPENDENCE answers the following questions:
As the U.S. begins to reduce its crude imports, what crude qualities and sources will be displaced?
The reductions cannot be only from light sweet grades as the growth in domestic production of such
grades will ultimately exceed current import volumes.
What will these changes mean for relative crude pricing? What will set Gulf Coast light sweet
crude prices if the U.S. ceases to be a significant importer of that grade? If light-heavy differentials
narrow, how will refiners respond, including those refineries designed to run on medium/heavy sour
imports? What are the implications for heavy crude pricing and import volumes? Will the impact be
large enough to weaken global flat crude prices?
How will the U.S. dispose of ever growing volumes of natural gas and NGL production? What is
the potential for growing domestic use? What are the limits to exports?
Within North America, will the infrastructure required to move crude oil from North to South
(and possibly East and West) keep pace with production growth or will we be facing an
extended period of inland price disconnects?
How will energy policy evolve in a world where supply security may not be the principal policy
driver in the future? Will free market principles allow unlimited oil product and natural gas
exports? Or will America-first policies seek to add additional restrictions on exports in order to force
down U.S. prices? Will Canada be forced to respond by expanding efforts to increase its oil and gas
exports to Asia and other alternative markets?
Will enthusiasm for ethanol dissipate in this new world? Tough automobile fuel efficiency
standards? Natural gas use in transportation?
What will happen to production costs as drilling activity continues to accelerate? Will costs
increase as economic rents mount as was the case in the development of the Canadian oil sands
projects? Or will further improvements in technology and drilling productivity continue to drive costs
down as has been the case for shale gas to date?
Will the U.S. undergo a new energy-intensive manufacturing boom led by relatively (on a
global scale) cheap gas, gas liquids and electricity prices?
The answers to these questions are neither simple nor straightforward since they involve the interaction
between regional liquids supply and demand trends and balances, refining economics, pipeline and other
infrastructure assessments, and a potentially wide range of policy uncertainties. PIRA's ongoing detailed
analysis of oil and gas supply/demand and balances, along with our refinery databases and flow models,
make us uniquely qualified to carry out these assessments.


STUDY DELIVERABLES AND TIMING
Companies purchasing the study will be entitled to have three users to each of the following
deliverables (licensing options are available to add extra users):
CLIENT FORUM (September 10-11, 2012)
Given the importance of the topic and the uncertainties across the upstream and
downstream, oil and gas, domestic and international markets, etc., we believe that the
topic of U.S. energy independence warrants extensive discussion and the ability for
clients to probe the assumptions and methodology used in an open forum. Over the
course of two days, attendees will have the opportunity to see a presentation of the key
results, discuss those findings and their implications, and question the studys authors.
The preliminary agenda appears on the following page.

WRITTEN REPORT (Released prior to the Forum)
The report some 100+ pages in length explains the findings of the study and
outlines the bases underlying those results, while providing a discussion of the key
uncertainties that impact the major conclusions. The report also includes an executive
summary and the full set of charts, with descriptions, to be displayed during the two-day
forum.

ONLINE DATABASE (September 2012)
A comprehensive database providing historical data back through 1995 and forecasts
through 2030 in Excel spreadsheets for:
Shale oil production (crude and NGL) by formation and by U.S. state and Canadian
province; total crude by state and province; and total NGL by country.
Oil product demand by end-use sector and product.
Crude oil supply/demand balances for sub-regions within North America.
U.S. crude and product gross and net import projections with quality breakouts.
Price forecasts for key North American crude and product markets and the
relationship between North American and key international prices.

FEES AND OPTIONS
THE ROAD TO U.S. ENERGY INDEPENDENCE: THE SHALE REVOLUTION AND ITS IMPLICATIONS FOR
NORTH AMERICA'S ENERGY MARKETS can be purchased by both PIRA retainer clients as well as non-
clients. Existing PIRA retainer clients receive a reduced price. Companies that order before July
20, 2012, receive an early-bird discount.
The standard fee allows for three users to the study (and three invitations to the Forum); extra
report copies, database passwords and Forum invitations can also be purchased.
For detailed service pricing options, see the Acceptance Form on page 9.
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The Road to U.S. Energy Independence:
The Shale Revolution and Its Implications for
North America's Energy Markets
Client Forum
Monday and Tuesday, September 10-11, 2012
InterContinental Houston
2222 West Loop South
Houston, Texas, 77027
Tel: +1-713-627-7600

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Day 2: Tuesday, 8:00 a.m. 4:30 p.m.

Gas, Power, Macro, Policy and Pricing
8:00 8:30 a.m. Breakfast
8:30 9:40 a.m. Natural Gas Supply/Demand Outlook,
Pricing and Interactions with Liquids
9:40 10:20 a.m. Implications for Coal, Renewables,
Electricity, and Emissions
10:20 10:40 a.m. Break
10:40 11:20 a.m. U.S. Industrial Competitiveness and
Macroeconomic Implications
11:20 12:10 p.m. Crude and Product Pricing, Including
Location Differentials and Quality
Premiums
12:10 1:10 p.m. Lunch
1:10 2:00 p.m. Policy Issues
2:00 2:55 p.m. Alternative Scenarios and Implications
2:55 3:15 p.m. Break
3:15 4:30 p.m. Winners/Losers, Client Feedback
Concluding Remarks

Day 1: Monday, 10:00 a.m. 6:30 p.m.

Overview and Liquids Balances
10:00 11:00 a.m. Check-in
11:00 11:40 a.m. Study Overview
11:40 12:50 p.m. North American Liquids Production
Outlook and Uncertainties
12:50 1:40 p.m. Lunch
1:40 2:15 p.m. North American Liquids Demand
Outlook and Demand-Side Policy
Assumptions
2:15 3:00 p.m. Crude Oil Infrastructure Outlook and
Issues
3:00 3:20 p.m. Break
3:20 4:10 p.m. NGL Production, Petchem Demand,
Infrastructure, Export Balances and
Constraints
4:10 5:00 North American Refining Outlook:
Output and Crude Choice, Trade
Prospects and Issues
5:00 6:30 p.m. Cocktail Reception

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WHO WILL BENEFIT FROM THIS STUDY
Decisions by producers, refiners, farmers, vehicle manufacturers, energy end-users and others have been
made over the past decades under the presumption that growing U.S. imports of gas and oil would drive
pricing relationships, policy decisions, and the overall economic attractiveness of the U.S. as a place to
conduct energy intensive business. The process of reassessment began several years ago in the case of
natural gas, and it is time for a grassroots examination of the implications of the U.S. heading down the
road toward net energy independence and possibly even reaching that goal in the next decade. THE ROAD
TO U.S. ENERGY INDEPENDENCE will help market participants understand how market supply, demand,
trade, and policy actions will all interact to change the North American energy market and its relative
position in the world. The following market participants will all benefit from this study:
North American crude producers will gain a better understanding of both the evolving factors that
will determine the pricing for their crudes, new competition and the potential infrastructure limitations
that could cause periodic disconnects from normal parity relationship.
International crude producers will have a sense of how the U.S. crude import mix will evolve and
the implications for pricing in North America vs. alternative export destinations.
Refiners need to plan capacity changes based on the outlook for demand, feedstock supply, and
relative pricing. The paradigm of deep conversion of inexpensive heavy sour crudes will be challenged
by a surplus of attractively priced light sweet crude. The potential for growth in product exports and
the policy uncertainties surrounding them could prove to be a critical issue to downstream success.
Trading companies want to anticipate regional supply/demand changes and price dynamics as crude
imports decline and product exports increase. This analysis will aid in planning terminal and shipping
infrastructure needs to best capture future opportunities. Shipping companies will need to address some
of the same changes.
Biofuels producers may want to consider the future for their product if oil supply security becomes an
increasingly less important driver for U.S. energy policy.
Natural gas producers will want to examine how the key markets for their product will evolve,
especially the growing role of industrial and transportation use. The study will also provide perspective
n
the future as national priorities
re
ocations around the world. Will the U.S.
ow

natural gas ventures. This study will allow
for more informed decision-making on potential projects.
on the incentives and potential limits to LNG exports.
Car and truck manufacturers may want to consider both of the above trends as well as the questio
of whether proposed fuel efficiency standards could be weakened in
evolve away from energy security.
Industrial energy consumers will want a solid understanding of where energy prices in the U.S. a
heading and how they will compare with prices in other l
become a low energy cost location by global standards?
Policy-makers need to determine whether the current policy mix is appropriate timely insight into h
proposed changes in product quality regulations will affect supply, demand, price, and industry
profitability. This study will enable them to better evaluate the impact of future regulatory changes.
Financial institutions must make sound evaluations of how changing market conditions will affect the
economics and financing of new refining, upstream oil and

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ABOUT PIRA ENERGY GROUP
The PIRA Energy Group, founded in 1976, is an international energy consulting firm, offering Retainer
Client Services as well as customized consulting on a broad range of subjects in international oil, natural
gas (and LNG), coal, electricity, biofuels, freight markets, and related environmental issues. PIRA
provides evaluation of key U.S. and international energy issues that impact the behavior and performance
of the industry and its various markets and sectors. Currently, more than 500 companies worldwide retain
PIRA, including international and national integrated oil and gas companies, independent producers,
refiners, marketers, oil and gas pipelines, electric and gas utilities, industrials, trading companies,
financial institutions, and government agencies.
PIRA STUDY TEAM
Dr. Mark Schwartz (Study Leader; President and Managing Director, Scenario Planning Service) works
closely with PIRA's Global Oil and Natural Gas groups to evaluate the key assumptions underlying their
outlooks and to develop plausible alternative assumptions and outcomes. Before joining PIRA in 2002, he
was the Chief Economist of ExxonMobil Corp., where he was responsible for developing the companys
long-range economic and energy outlook. During his 25 years at Exxon he also had assignments in
Upstream Planning, Treasurers, and Corporate Planning functions. Mark holds a Ph.D. in economics from
the University of Pennsylvania.
Gregory J. Shuttlesworth (Executive Director, Natural Gas) directs PIRAs research covering all aspects
of North American natural gas fundamentals. His work is aimed at providing PIRA clients with in-depth
and timely analysis of how fast-breaking events will impact gas supply and demand, inter-fuel
competition, and the outlook for gas prices. He is a principal author of PIRAs Gas Forecast Monthly,
Gas Trade Monthly, Gas Regional Monthly and Gas Flash Weekly. Before founding PIRAs Natural Gas
Group in 1981, his professional career centered on global petroleum and related energy economics. He
held the positions of Senior Analyst at the petroleum-consulting firm of W.J. Levy Associates and Energy
Economist at the Chase Manhattan Bank. Greg is a graduate of Johns Hopkins University. He has a
B.A., M.B.A., and completed post-MBA studies in economics.
Richard Joswick (Managing Director, Global Oil Group) develops PIRAs outlook for crude and
products pricing, refinery margins, and inter-regional supply balances. He authors the monthly European
Oil Market Forecast and numerous special projects. Over the last few years he was the study leader for
the successful multi-client studies: Bottom of the Barrel: The Future for Residual Fuel Oil (2007 &
2012); Heart of the Barrel: The Future for Middle Distillate Fuels (2009); and Top of the Barrel: The
Future for Gasoline, Naphtha, and LPG (2011). He joined PIRA in 2004 after 20 years with ExxonMobil
in supply logistics, planning, refining, and engineering. During his time at ExxonMobil, he had
assignments developing near-term oil market forecasts, designing heavy oil upgrading processes and
evaluating refining economics. Rick has M.S. and B.S. degrees from Rutgers in chemical engineering.
David A. Zinamon (Managing Director, Refining and NGLs) specializes in NGLs, refined products,
refinery operations, alternative fuels and environmental matters, particularly as they affect petroleum
product markets. Among other activities, he directs PIRA's Global NGL Market Service and oversees
PIRAs World Refinery Database. Dave joined PIRA in 1984 after seven years of international energy
consulting experience with Chem Systems. This followed several years of manufacturing, marketing and
planning positions with Celanese Chemical, GAF Corp., and Airco. Dave has a B.Ch.E. from City
College of New York and an M.B.A. from Rutgers University.

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PIRA STUDY TEAM (continued)
F.W.A. (Bill) Fuller (Senior Director, International Oil) had over 30 years of energy forecasting and
analytical experience with Exxon International before joining PIRA in 1997. He now oversees PIRAs
analysis and forecasting of near-term industry oil balances, with particular emphasis on international
supplies, and monitors events impacting PIRAs oil market view. Bill has a B.S. in chemical engineering
from Cornell University.
Peter Jaquette (Senior Director, Global Oil Group) oversees PIRAs World Energy Demand Model and
is a key contributor to PIRA's Scenario Planning Service. He was the coordinator for PIRA's Planning for
Tomorrow study series. He joined PIRA in 2007 with more than 25 years of experience in corporate
strategic planning and economic consulting, including 14 years with ARCO and nine years with
Weyerhaeuser, where he was involved in evaluating cellulosic ethanol and other energy projects. Peter
has a B.A. in economics from Swarthmore College and an M.A. in economics from Stanford University.
Gary Greenstein (Director, Global Oil Group) joined PIRA following 38-year career with ExxonMobil,
where he was involved in all aspects of the refining business, including planning, operations, engineering,
and research. Gary has a B.Ch.E. from City College of New York, an M.S. in chemical engineering from
New Jersey Institute of Technology, and an M.B.A. from Fairleigh Dickinson University.
Dr. Naing Oo (Associate Director) joined PIRAs Global Oil Group in 1995. He focuses on quantitative
and econometric analysis for forecasting oil demand and prices. He is also involved in analysis on crude
and product balances and trade flows. Naing holds a Ph.D. in economics from the City University of New
York.
Su Hyung Ryu (Associate Director) focuses on crude and product price forecasts. Ms. Ryu maintains and
develops integrated oil demand and pricing models and information systems. Since joining PIRA in 1998,
she has participated in numerous benchmarking and competitive analysis projects, crude and product
marketing assessments, and asset valuations. Prior to joining PIRA, Su worked at Citibank Global
Banking, where she analyzed and developed investment database applications. She holds M.S. in business
computer information systems from Baruch College in New York.
Lila Noury (Associate Director, Political Risk) is responsible for analyzing political and economic issues
in key energy-producing and -consuming countries. Prior to joining PIRA, she analyzed Irans oil and gas
sector for a leading consulting firm in Iran. She also worked with Grameen Bank, a micro-finance
institution in Bangladesh, evaluating and researching alternative-energy programs. Lila has a B.A. in
economics and international relations from Bowdoin College and an M.A. from Columbia University in
international energy management and policy.
Miriam Levy (Senior Analyst, Global Oil) leads PIRA's upstream modeling efforts including a new
generation of play-by-play shale liquids models. She is responsible for the weekly Energy Market Recap,
and contributes to special projects and multi-client studies. From 2006 to 2009, she consulted electric
utilities on power procurement at NERA Economic Consulting. She also worked as an analyst at an
emerging markets hedge fund. Miriam has a B.A. in Ethics, Politics, and Economics from Yale University
and an M.A. from Columbia University in International Energy Management and Policy.

ACCEPTANCE FORM

(Company Name) _______________________________ wishes to subscribe to the multi-client study
THE ROAD TO U.S. ENERGY INDEPENDENCE: THE SHALE REVOLUTION AND ITS IMPLICATIONS FOR
NORTH AMERICA'S ENERGY MARKETS.

We understand and agree that the fees are as follows:

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PIRA Client Non-Client
3 Users Addl Users 3 Users Addl Users
Standard Fee* $21,500 $1,000 each $27,000 $1,250 each
Before July 20, 2012 $19,350 $900 each $24,300 $1,125 each
New York City-based companies, please add 8.375% sales tax; Long Island-based companies, please
add 8.625% sales tax; all other New York State companies, please add the county-appropriate sales tax.

Name/Title: _________________________________________________________________________
Company:___________________________________________________________________________
Address: ____________________________________________________________________________
____________________________________________________________________________________
Phone/Fax/e-mail: ____________________________________________________________________
Total Fee: ___________________________________________________________________________
Signature:___________________________________________________________________________

PLEASE MAIL OR FAX TO: PIRA Energy Group
Attn.: Managing Director, Client Services
3 Park Avenue, 26th Floor
New York, NY 10016-5989
Phone: 1-212-686-6808; Fax: 1-212-686-6628; sales@pira.com

Note: The Road to U.S. Energy Independence: The Shale Revolution and Its Implications for North
America's Energy Markets will contain no confidential technical information, to the best knowledge of PIRA.
However, except for information that is or becomes available to the public in printed publication, or is already in the
possession of subscriber or developed independently by subscriber, or is received by subscriber in good faith from a
third party, any information in the study is for the sole and confidential use of the subscriber. Subscribers agree to use
reasonable efforts to protect the confidential nature of the information supplied to them as part of this study.

Energy Independence Study Prospectus

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The Shale Revolutions Implications for North American Markets

A Multi-Client Study Prospectus

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