EIA 2014 Production Report

8/11/2019 EIA 2014 Production Report

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www.eia.govU.S. Energy Information Administration Independent Statistics & Analysis

Outlook for U.S. shale oil and gas

Argus Americas Crude Summit

January 22, 2014 | Houston, TX

By

Adam Sieminski, EIA Administrator


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5/25

U.S. crude oil and natural gas production is up dramatically

since 2010 and will continue to grow rapidly; this has strategic

implications for the United States

Refinery operations/investment

Logistics infrastructure investment

Exports of petroleum products

Exports of crude oil and natural gas (LNG)

Operation of the Strategic Petroleum Reserve

5Argus Americas Crude SummitJanuary 22, 2014


6/25

U.S. natural gas prices remain well below crude oil prices

6

energy spot prices

2012 dollars per million Btu

Source: EIA, Annual Energy Outlook 2014 Early Release

HistoryProjections

2012

Henry Hub spot price

Argus Americas Crude SummitJanuary 22, 2014

Brent crude oil spot price

2018 2040

Ratio:

7.1Oil to gas

price ratio:

3.4

Ratio:

3.2


7/25

U.S. shale gas leads growth in total gas production through

2040 to reach half of U.S. output

7

U.S. dry natural gas production

trillion cubic feet


Associated with oilCoalbed methane

Tight gas

Shale gas

AlaskaNon-associated offshore

Non-associated onshore

ProjectionsHistory 2012


billion cubic feet per day


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U.S. dry gas consumption

trillion cubic feet


ProjectionsHistory

Industrial*

Electric

power

Commercial

Residential

Transportation**

11.2

4.1

1.7

11.0

3.6

9.1

4.2

0.7

8.5

2.9

*Includes combined heat-and-power and lease and plant fuel

**Includes pipeline fuel

U.S. natural gas consumption growth is driven by electric

power, industrial, and transportation use



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U.S. manufacturing output and natural gas use grows with low

natural gas prices, particularly in the near term

9

manufacturing natural gas consumption

quadrillion Btu



AluminumGlass

Iron and steel

Paper

Food

Refining and

related

Bulk chemicals

Other

Metal based


durables

manufacturing


10/25

U.S. natural gas use in the transportation sector grows rapidly with

the largest share in freight trucks

10

natural gas use by mode

trillion Btu



Freight trucks

Buses

Freight rail and marineLight-duty vehicles

22%


Approximate crude oil equivalent,

(thousand barrels per day) 2040

Freight trucks

Freight rail and marine

Buses

Light-duty vehicles

290

71

38

9


11/25

U.S. natural gas imports and exports

trillion cubic feet per year

Alaska LNG exports

Pipeline exports to Mexico

Pipeline exports to Canada

Lower 48 states LNG exports

Pipeline imports from Canada

LNG imports


11

-15

-10

-5

0

5

10

15

20

25


5.4 tcf of exports

(14.8 bcf/day)

2.0 tcf of imports(5.4 bcf/day)

U.S. natural gas gross exports exceed 5 tcf in 2025




12/25

U.S. becomes a net exporter of natural gas in the near future

12

U.S. dry natural gas

trillion cubic feet per year



ProjectionsHistory2012

Consumption

Domestic supply

Net exports

100

75

50

25

0

-25



13/25

Growing tight oil and offshore crude oil production drive U.S.

output close to historical high

13

U.S. crude oil production

million barrels per day


Tight oil

Alaska

Other lower 48 onshore

Lower 48 offshore



U.S. maximum production level of

9.6 million barrels per day in 1970


14/25

U.S. transportation sector motor gasoline demand declines, while

diesel fuel accounts for a growing portion of the market

14

transportation energy consumption by fuel

quadrillion Btu




59% Motor gasoline

Jet fuel

CNG/LNG

12% 13%3%

44%

31%

3% 4%Other*

Diesel22%

2030

47%

13%

3%

30%

1%

2040

Ethanol4%

5%5%

*Includes aviation gasoline, propane, residual fuel oil, lubricants,

electricity, and liquid hydrogen


15/25

U.S. petroleum product imports and exports


Other petroleum

product imports

Distillate exports

Motor gasoline exports

Other petroleumproduct exports

Distillate imports

Motor gasoline imports


Argus Americas Crude SummitJanuary 22, 2014 15

U.S. maintains status as a net exporter of petroleum products


Total petroleum product

net exports


16/25

U.S. dependence on imported liquids declines, particularly in

the near term

16

U.S. liquid fuel supply



Consumption

Domestic supply

Net imports40%

32%

ProjectionsHistory2012

2005

60%


25%

2016 2040


17/25

U.S. energy-related CO2emissions remain below the 2005 level

throughout the projection period

17

carbon dioxide emissions

billion metric tons



2005


Energy-related carbon dioxide

emissions are 9% below the 2005

level in 2020 and 7% below the

2005 level in 2040.


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Top ten countries with technically recoverable shale resources

Shale oil

rank country billion barrels

1 Russia 75

2 United States 58

3 China 32

4 Argentina 27

5 Libya 26

6 Venezuela 13

7 Mexico 13

8 Pakistan 9

9 Canada 9

10 Indonesia 8

World total 345

Shale gas

rank country trillion cubic feet

1 China 1,115

2 Argentina 802

3 Algeria 707

4 United States 665

5 Canada 573

6 Mexico 545

7 Australia 437

8 South Africa 390

9 Russia 285

10 Brazil 245

World total 7,299

Note: ARI estimates U.S. shale oil resources at 48 billion barrels and U.S. shale gas resources at 1,161 trillion cubic feet.

Source: United States: EIA and USGS; Other basins: ARI.



19/25

Reproducibility of shale development may have limits

Many factors support production from U.S. shale resources that donot exist in many other countries:

Resource quality and geologic distribution details matter

Major private ownership of subsurface mineral rights, often by

surface owners, provides a strong incentive for development

Availability of many independent operators and supporting

contractors with critical expertise and advanced technology

Pre-existing gathering and pipeline infrastructure

Public acceptance of hydraulic fracturing as well as related

activities, including transportation of material, and availabilityand disposal of water/wastewater; population density



20/25

Geopolitical implications of shale resources

Shale oil is both light and sweet the rapid growth in its supply has

implications for crude oil pricing relationships, the value of different

refinery configurations, refinery output slates, and the correspondence

between SPR holdings and U.S. crude imports

Chinas success in shale development and its future LNG imports (and

coal use) are inversely related

Russias share of Europes gas market could be reduced by increased

European shale production

High volumes of shale oil production, with other drivers, could significantly

diminish the market share and pricing power of OPEC producers

Shorter lead times for the manufacturing model of production from shale

resources may reduce price volatility (over an extended period) compared

to the historical exploration/development model for conventional

resources



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OPEC countries now account for most unplanned outages


estimated unplanned crude oil production outages

thousand barrels per day

Source: EIA, Short-Term Energy Outlook, January 2014

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Jan 2012 Jul 2012 Jan 2013 Jul 2013

Other Non-OPEC

Syria

Sudan/S. Sudan

Iraq

Nigeria

Libya

Iran

Non-

OPEC

OPEC


22/25

China is now the worlds largest net oil importer


net imports for China and the United States

millions of barrels per day

Note: Net oil imports are defined as total liquid fuels consumption less domestic production.

Source: EIA, Short-Term Energy Outlook, January 2014

0

2

4

6

8

10

Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15

ForecastHistory

China net imports

United States net imports

Jan-14


23/25

U.S. liquids (petroleum) production projected to outpace both

Saudi Arabia and Russia in 2014

Liquids (petroleum) production, 2014

(million barrels per day)

United States Saudi Arabia Russia

Crude oil 8.5 10.0 10.3

NGLs 2.5 1.8 0.8

Biofuels + 1.0 0 0

Refinery gain 1.1 0.1 0.1

Total (mmbl/d) 13.1 11.9 11.2

Source: EIA, Short-Term Energy Outlook; International Energy Outlook



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There are many issues that cause uncertainty

Unresolved long-term effects of economic issues in the United States,

Europe, and China, and their impacts on demand

Social unrest in the Middle East and North Africa, and the potential for

unrest elsewhere, and its impacts on supply

The timing of Japans full recovery from the impacts of the 2011nuclear disaster at Fukushima

Global shale gas and shale oil production potential and OPEC market

share decisions

Changing policies and regulations

Changing consumer preferences and technological breakthroughs



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For more information

Argus Americas Crude SummitJanuary 22 2014 25

U.S. Energy Information Administration home page | www.eia.gov

Annual Energy Outlook | www.eia.gov/aeo

Short-Term Energy Outlook | www.eia.gov/steo

International Energy Outlook | www.eia.gov/ieo

Monthly Energy Review | www.eia.gov/mer

Today in Energy | www.eia.gov/todayinenergy

State Energy Profiles | http://www.eia.gov/state

Drilling Productivity Report | http://www.eia.gov/petroleum/drilling/
http://www.eia.gov/http://www.eia.gov/aeohttp://www.eia.gov/steohttp://www.eia.gov/ieohttp://www.eia.gov/merhttp://www.eia.gov/todayinenergyhttp://www.eia.gov/statehttp://www.eia.gov/petroleum/drilling/http://www.eia.gov/petroleum/drilling/http://www.eia.gov/statehttp://www.eia.gov/todayinenergyhttp://www.eia.gov/merhttp://www.eia.gov/ieohttp://www.eia.gov/steohttp://www.eia.gov/aeohttp://www.eia.gov/

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