Status and outlook for shale gas and tight oil development ... · Sources: LCI Energy Insight gross withdrawal estimates as of March 2013 and converted to dry production estimates

www.eia.gov U.S. Energy Information Administration Independent Statistics & Analysis

Outlook for shale gas and tight oil development in the U.S.

For Washington Association of Money Managers April 18, 2013 | Washington, DC By Adam Sieminski, Administrator

U.S. Shale Gas

2 Adam Sieminski , WAMM, April 18, 2013

An average well in shale gas and other continuous resource plays has steep decline curves

Adam Sieminski , WAMM, April 18, 2013 3

0

500

1,000

1,500

2,000

0 5 10 15 20

Haynesville

Eagle Ford

Woodford

Marcellus

Fayetteville

million cubic feet per year

Source: EIA, Annual Energy Outlook 2012

1

0%

50%

100%

0 5 10 15 20

Cumulative production = EUR

Oil production by monthly vintage of wells in the Williston Basin – production grows with continued drilling


million barrels per day

Source: DrillingInfo history through December 2012, EIA Short-Term Energy Outlook, April 2013 forecast

0.0

0.2

0.4

0.6

0.8

1.0

1.2

Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14

Domestic production of shale gas has grown dramatically over the past few years


0

5

10

15

20

25

30

2000 2002 2004 2006 2008 2010 2012

Rest of US

Marcellus (PA and WV)

Haynesville (LA and TX)

Eagle Ford (TX)

Bakken (ND)

Woodford (OK)

Fayetteville (AR)

Barnett (TX)

Antrim (MI, IN, and OH)

shale gas production (dry) billion cubic feet per day

Sources: LCI Energy Insight gross withdrawal estimates as of March 2013 and converted to dry production estimates with EIA-calculated average gross-to-dry shrinkage factors by state and/or shale play.

Shale gas leads growth in total gas production through 2040 to reach half of U.S. output

6

U.S. dry natural gas production trillion cubic feet


0

5

10

15

20

25

30

35

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Associated with oil Coalbed methane

Tight gas

Shale gas

Alaska

Non-associated onshore

Non-associated offshore

Projections History 2011

Adam Sieminski , WAMM, April 18, 2013

7

0

5

10

15

20

25

30

35

2005 2011 2020 2025 2030 2035 2040

U.S. dry gas consumption trillion cubic feet


Projections History

Industrial

Electric power

Commercial

Residential

Transportation

33%

14%

6%

32%

12%

33%

19%

3%

31%

13%

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

Gas to liquids 2%

Natural gas consumption is quite dispersed with electric power, industrial, and transportation use driving future demand growth


0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Growth of natural gas in transportation, excluding pipeline use, led by heavy duty trucks (LNG) and gas to liquids (diesel)… marine and rail to come?

8

U.S. natural gas consumption quadrillion Btu

Note: Gas to liquids includes heat, power, and losses. Source: EIA, Annual Energy Outlook 2013

Light-duty vehicles

2011 History Projections

95% 52%

23% 25%

26%

67%

5% 2%

Buses

Freight trucks

Gas to liquids



U.S. natural gas imports and exports


trillion cubic feet

-4

-2

0

2

4

6

8

10

2010 2020 2030 2040 -4

-2

0

2

4

6

8

10

2010 2020 2030 2040

Reference case High resource case

Exports to Mexico

Exports to Canada

Lower 48 states LNG exports

Alaska LNG exports

Imports from Canada

LNG imports

Domestic natural gas production grows faster than consumption and the U.S. becomes a net exporter of natural gas around 2020

10

-5

0

5

10

15

20

25

30

35

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

U.S. dry gas trillion cubic feet



Consumption

Domestic supply

Net imports


U.S. Tight Oil

11 Adam Sieminski , WAMM, April 18, 2013

Domestic production of tight oil has grown dramatically over the past few years

12

tight oil production for select plays million barrels per day

Source: Drilling Info (formerly HPDI), Texas RRC, North Dakota department of mineral resources, and EIA, through December 2012


0.0

0.5

1.0

1.5

2.0

2.5

2000 2002 2004 2006 2008 2010 2012

Eagleford (TX) Bakken (ND & MT) Spraberry (TX Permian) Wolfcamp (TX Permian) Bonespring (TX Permian) Yeso (TX Permian) Glorieta (TX Permian) Niobrara_Codell (CO, WY) Monterey (CA) Granite Wash (TX & OK) Woodford (OK) Austin Chalk (TX & LA) Barnett (TX)


0

2

4

6

8

10

1990 2000 2010 2020 2030 2040 0

2

4

6

8

10

1990 2000 2010 2020 2030 2040

U.S. tight oil production leads growth in domestic production

Source: EIA, Annual Energy Outlook 2013 and Short-Term Energy Outlook, April 2013



Alaska

Tight oil

Other lower 48 states onshore

Lower 48 states offshore

STEO April 2013 U.S. crude oil projection


Alaska

Tight oil

Other lower 48 states onshore

Lower 48 states offshore

Reference case High resource case

Light-duty vehicle liquids consumption is lower primarily due to more stringent CAFE standards


0

2

4

6

8

10

2010 2015 2020 2025 2030 2035 2040

light-duty vehicle liquids consumption million barrels per day


AEO2012

AEO2013

U.S. dependence on imported liquids depends on both supply and demand

15

U.S. liquid fuel supply million barrels per day

Source: EIA, Annual Energy Outlook 2013 and Short-Term Energy Outlook, April 2013

0

5

10

15

20

25

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Consumption

Domestic supply

Net imports 37%

Projections History


Petroleum Exports

-8%

32% STEO forecast for 2014

2014

40%

2012

Global tight oil production comparisons

16

Source: Preliminary International Energy Outlook 2013 and BP Energy Outlook 2030, www.bp.com/energyoutlook

0

2

4

6

8

10

12

2000 2010 2020 2030

Australia China Russia Argentina Mexico Canada United States


BP Energy Outlook 2030 IEO2013 DRAFT


Uncertainties that could slow global growth of shale gas and tight oil


• Resource quantities and distribution

• Surface vs. mineral rights

• Risk appetite of industry participants

• Infrastructure and technology

• Environmental constraints

-4

-3

-2

-1

0

1

2

3

4

1949 1956 1963 1970 1977 1984 1991 1998 2005 2012

U.S. petroleum product exports exceeded imports in 2011 for first time in over six decades


annual U.S. net imports of total petroleum products, 1949 – 2012 million barrels per day

Source: EIA, Petroleum Supply Monthly and Annual Energy Review

net product exporter

exports

imports

net imports

U.S. and Saudi Arabian crude oil and petroleum liquids production



Note: Volumes for 2012 and 2013 are projected. Refinery gain for Saudi Arabia is estimated as one half of U.S. refinery gain on a percentage basis

Source: EIA, This Week in Petroleum, Dec 19, 2012

0

2

4

6

8

10

12

14

2008 2009 2010 2011 2012 2013

refinery processing gain

other liquids

natural gas liquids

crude oil


• Transforming data operations Essential to radically improve our data collection and management processes. EIA

must improve business processes, employing common, maintainable IT systems and platforms and incorporating smarter ways of using third-party data

• Increasing analytical impact A key part of our mission is to bring context and meaning to the information we convey.

To do this, we must modernize our core modeling tools to improve our energy outlooks and increase the availability of resources for analyses beyond our current product slate

• Improving the customer experience EIA must ensure that its customers have access to critical information how and when

they need it. We need to re-imagine the way we disseminate our data and analysis and leverage technology to meet evolving customer needs

• Enabling our mission To hire, motivate, and retain the best and brightest. We need to give them the

technological and developmental tools they need to grow and succeed, and maintain an environmental of openness and collaboration

• Finding and adapting the best of what others are doing Both inside and outside of government

EIA’s strategic priorities

Increasing demand for current market analysis from EIA


• Gas markets – LNG exports and impact on domestic prices over time

• Oil and gas production data (federal lands vs. rest), forecasts, and reserves

• Crude and product markets, refining and midstream changes – Types of refining capacity in different regions (crude preferences)

– Rail transportation

– Jones Act tanker availability

– Refinery availability and outage analysis including regional price impacts

– Exports of refined products and impact on domestic prices

– Disposition of increased domestic tight light crude production

• Renewable Fuels Standard / RINS / cellulosic ethanol

• Growth of natural gas use in transportation

• International disruptions and ongoing sanctions-related analyses

Thomas Fanning Chairman, President and CEO

Southern Company

Aldo Flores-Quiroga Secretary General

International Energy Forum

Hans Rosling Chairman

Gapminder

Keynote Speakers

For more information


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

Annual Energy Outlook | www.eia.gov/forecasts/aeo

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

International Energy Outlook | www.eia.gov/forecasts/ieo

Today In Energy | www.eia.gov/todayinenergy

Monthly Energy Review | www.eia.gov/totalenergy/data/monthly

Annual Energy Review | www.eia.gov/totalenergy/data/annual

http://www.eia.gov/

http://www.eia.gov/forecasts/aeo

http://www.eia.gov/forecasts/steo

http://www.eia.gov/forecasts/ieo

http://www.eia.gov/todayinenergy

http://www.eia.gov/totalenergy/data/monthly

http://www.eia.gov/totalenergy/data/annual

Documents

Status and outlook for shale gas and tight oil development ... · Sources: LCI Energy Insight gross withdrawal estimates as of March 2013 and converted to dry production estimates