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www.eia.govU.S. Energy Information Administration Independent Statistics & Analysis
U.S. natural gas outlook
ForNational Conference of State Legislatures August 28, 2019 | Chicago, IL
ByStephen Nalley, Deputy Administrator
Key takeaways
Stephen Nalley, Chicago, IL August 28, 2019 2
• EIA projects U.S. energy production and demand will grow in the long term, with production growth outpacing demand growth. As a result, we expect that the United States will export more energy than it imports next year.
• Continued horizontal drilling and fracking in shale formations, once considered “unconventional,” will remain key to current and future natural gas and petroleum liquids production growth.
• Drilling for U.S. shale natural gas, particularly in the east, will continue to lead growth in natural gas production. One result has been record expansion of natural gas pipeline infrastructure as traditional supply and demand centers have changed.
• Strong growth in natural gas production is leading to rising natural gas exports. EIA expects U.S. liquefied natural gas (LNG) export capacity to continue to increase, with growing exports in the future.
• Lower natural gas prices provide competitive incentives for increased power generation from natural gas currently and in the future. Natural gas use for electric power generation overtook coal in 2016, and renewables continue to increase their share of total generation.
Stephen Nalley, Chicago, IL August 28, 2019 3
EIA collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment.
EIA’s role is unique - by providing an unbiased view of energy markets, EIA increases transparency and promotes public understanding of important energy issues.
EIA has evolved its program in recent years to provide an expanding customer base with coverage of increasingly complex and interrelated energy markets.
U.S. energy exports will exceed imports after 2020
Stephen Nalley, Chicago, IL August 28, 2019 4
0
5
10
15
20
25
30
35
40
1990 2010 2030 2050
Gross energy trade (Reference case)quadrillion British thermal units
exports
imports
2018history projections
Source: U.S. Energy Information Administration, Annual Energy Outlook 2019
0
5
10
15
20
25
30
35
40
45
1990 2010 2030 2050
Energy production (Reference case)quadrillion British thermal units
dry natural gas
crude oil and lease condensate
other renewable energycoalnuclearnatural gas plant liquidshydro
2018history projections
Shale plays drive increasing U.S. oil and gas production
Stephen Nalley, Chicago, IL August 28, 2019 5
Source: U.S. Energy Information Administration based on data from various published studies.
Shale and tight oil lead transformational U.S. production growth
Stephen Nalley, Chicago, IL August 28, 2019 6
Note: Scales are presented as approximate barrel of oil equivalent Sources: EIA derived data from state administrative data collected by DrillingInfo Inc. Data are through May 2019 and represent EIA’s official tight oil and shale gas estimates, but are not survey data. State abbreviations indicate primary states.
U.S. tight oil productionmillion barrels of oil per day
U.S. dry shale gas productionbillion cubic feet per day
0
1
2
3
4
5
6
7
8
9
10
11
2005 2007 2009 2011 2013 2015 2017 2019
Eagle Ford (TX)Spraberry (TX Permian)Bakken (ND & MT)Wolfcamp (TX & NM Permian)Bonespring (TX & NM Permian)Niobrara-Codell (CO & WY)Mississippian (OK)Austin Chalk (LA & TX)Woodford (OK)Rest of US 'tight oil'
0510152025303540455055606570
2005 2007 2009 2011 2013 2015 2017 2019
Marcellus (PA,WV,OH & NY)Permian (TX & NM)Utica (OH, PA & WV)Haynesville (LA & TX)Eagle Ford (TX)Barnett (TX)Woodford (OK)Bakken (ND & MT)Niobrara-Codell (CO & WY)Mississippian (OK)Fayetteville (AR)Rest of US 'shale'
Eastern U.S. leads overall gas production growth
Stephen Nalley, Chicago, IL August 28, 2019 7
0
5
10
15
20
25
30
35
40
45
2000 2010 2020 2030 2040 2050
2018history projections
Southwest
East
Gulf Coast
rest of U.S.
Reference
0
10
20
30
40
50
60
2000 2010 2020 2030 2040 2050
Reference
tight/shale gas
otherLower 48 onshorelower 48 offshoreother
2018history projections
Source: U.S. Energy Information Administration, Annual Energy Outlook 2019
Dry natural gas production by typetrillion cubic feet
Dry shale gas production by regiontrillion cubic feet
Pipeline infrastructure evolves with changing supply and demand centers
Stephen Nalley, Chicago, IL August 28, 2019 8
Natural gas pipeline capacity out of the Northeast (2000-2019)billion cubic feet per day
Natural gas pipeline capacity into the South Central (2000-2019)billion cubic feet per day
0
5
10
15
20
25
2000 2003 2006 2009 2012 2015 2018
into the Midwest
into theSoutheast
into Canada
expected
Southeast
Midwest
Mountain
South Central
0
5
10
15
20
25
2000 2003 2006 2009 2012 2015 2018
expected
from Southeast
from Midwest
from Mountain
from Mexico
Southeast
Midwest
Mountain
South Central
Source: U.S. Energy Information Administration, natural gas pipeline U.S. state-to-state capacity and natural gas pipeline projects
The United States is already a net exporter of natural gas
Stephen Nalley, Chicago, IL August 28, 2019 9
Source: U.S. Energy Information Administration, Natural Gas Monthly
Monthly U.S. natural gas trade (Jan 2016-May 2019)billion cubic feet per day
15
10
5
0
5
10
15
2015 2016 2017 2018 2019
gross exports
of liquefied natural gas
by pipeline to Canadaby pipeline to Mexico
net tradegross importsby pipeline from Canada
of liquefied natural gas
0.1
U.S. natural gas trade by pipeline by point of entry (imports) or exit (exports) and LNG (exports)
U.S. LNG export capacity will increase through 2020
Stephen Nalley, Chicago, IL August 28, 2019 10
Source: U.S. Energy Information Administration, Existing and under-construction large-scale U.S. liquefaction facilities in the United States
0
1
2
3
4
5
6
7
8
9
10
2016 2017 2018 2019 2020
Elba Island, GeorgiaCove Point, Maryland
Corpus Christi, Texas
Cameron, Louisiana
Freeport, Texas
Sabine Pass, Louisiana
U.S. total LNGexport capacityby end of 2020
end of2020
1.9
3.1
4.2
6.4
8.9 8.9
Changes in U.S. liquefied natural gas export capacity (2019-2020)billion cubic feet per day
The U.S. electricity generation fuel mix has changed
Stephen Nalley, Chicago, IL August 28, 2019 11
U.S. annual electricity generation from selected sources (2001-2018)million megawatthours
Source: U.S. Energy Information Administration, Electric Power Monthly July 2019
0
500
1000
1500
2000
2500
natural gas
coalnuclear
renewables
Natural gas prices are competitive for electricity generation
Stephen Nalley, Chicago, IL August 28, 2019 12
Average U.S. costs for fossil fuels for generation$/MMBtu
Source: U.S. Energy Information Administration, Short-Term Energy Outlook August 2019
0
2
4
6
8
10
12
14
natural gas
coal
2018history projections
New generating capacity will come from gas and renewables
Stephen Nalley, Chicago, IL August 28, 2019 13
Annual electricity generating capacity additions and retirementsgigawatts
Source: U.S. Energy Information Administration, Monthly Energy Review and Annual Energy Outlook 2019
-30
-20
-10
0
10
20
30
40
50
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
2018history projections
solarwindoil and gasnuclearothercoal
additions
retirements
For more information
Stephen Nalley, Chicago, IL August 28, 2019 14
U.S. Energy Information Administration home page | www.eia.gov
Short-Term Energy Outlook | www.eia.gov/steo
Winter Fuels Outlook (October 8, 2019)
Annual Energy Outlook | www.eia.gov/aeo
AEO2020 release in January 2020
State Energy Portal | https://www.eia.gov/beta/states/overview
International Energy Outlook | www.eia.gov/ieo
IEO2019 release in September 2019
Today in Energy | www.eia.gov/todayinenergy
