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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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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
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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
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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
Source: EIA, Annual Energy Outlook 2014 Early Release
Associated with oilCoalbed methane
Tight gas
Shale gas
AlaskaNon-associated offshore
Non-associated onshore
ProjectionsHistory 2012
Argus Americas Crude SummitJanuary 22, 2014
billion cubic feet per day
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U.S. dry gas consumption
trillion cubic feet
Source: EIA, Annual Energy Outlook 2014 Early Release
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
Argus Americas Crude SummitJanuary 22, 2014
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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
Source: EIA, Annual Energy Outlook 2014 Early Release
Argus Americas Crude SummitJanuary 22, 2014
AluminumGlass
Iron and steel
Paper
Food
Refining and
related
Bulk chemicals
Other
Metal based
billion cubic feet per day
durables
manufacturing
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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
Source: EIA, Annual Energy Outlook 2014 Early Release
Argus Americas Crude SummitJanuary 22, 2014
Freight trucks
Buses
Freight rail and marineLight-duty vehicles
22%
billion cubic feet per day
Approximate crude oil equivalent,
(thousand barrels per day) 2040
Freight trucks
Freight rail and marine
Buses
Light-duty vehicles
290
71
38
9
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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
Source: EIA, Annual Energy Outlook 2014 Early Release
11
-15
-10
-5
0
5
10
15
20
25
billion cubic feet per day
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
ProjectionsHistory 20122025
Argus Americas Crude SummitJanuary 22, 2014
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U.S. becomes a net exporter of natural gas in the near future
12
U.S. dry natural gas
trillion cubic feet per year
Source: EIA, Annual Energy Outlook 2014 Early Release
Argus Americas Crude SummitJanuary 22, 2014
ProjectionsHistory2012
Consumption
Domestic supply
Net exports
100
75
50
25
0
-25
billion cubic feet per day
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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
Source: EIA, Annual Energy Outlook 2014 Early Release
Tight oil
Alaska
Other lower 48 onshore
Lower 48 offshore
ProjectionsHistory 2012
Argus Americas Crude SummitJanuary 22, 2014
U.S. maximum production level of
9.6 million barrels per day in 1970
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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
Source: EIA, Annual Energy Outlook 2014 Early Release
Argus Americas Crude SummitJanuary 22, 2014
ProjectionsHistory 2012
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
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U.S. petroleum product imports and exports
million barrels per day
Other petroleum
product imports
Distillate exports
Motor gasoline exports
Other petroleumproduct exports
Distillate imports
Motor gasoline imports
Source: EIA, Annual Energy Outlook 2014 Early Release
Argus Americas Crude SummitJanuary 22, 2014 15
U.S. maintains status as a net exporter of petroleum products
ProjectionsHistory 2012
Total petroleum product
net exports
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U.S. dependence on imported liquids declines, particularly in
the near term
16
U.S. liquid fuel supply
million barrels per day
Source: EIA, Annual Energy Outlook 2014 Early Release
Consumption
Domestic supply
Net imports40%
32%
ProjectionsHistory2012
2005
60%
Argus Americas Crude SummitJanuary 22, 2014
25%
2016 2040
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U.S. energy-related CO2emissions remain below the 2005 level
throughout the projection period
17
carbon dioxide emissions
billion metric tons
Source: EIA, Annual Energy Outlook 2014 Early Release
ProjectionsHistory 2012
2005
Argus Americas Crude SummitJanuary 22, 2014
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.
18Argus Americas Crude SummitJanuary 22, 2014
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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
19Argus Americas Crude SummitJanuary 22, 2014
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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
Argus Americas Crude SummitJanuary 22, 2014 21
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
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China is now the worlds largest net oil importer
Argus Americas Crude SummitJanuary 22, 2014 22
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
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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
23Argus Americas Crude SummitJanuary 22, 2014
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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
24Argus Americas Crude SummitJanuary 22, 2014
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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/