International Energy Outlook 2014
Implications of the U.S. Shale Revolution
For The Center for Strategic and International Studies October 15, 2014 | Washington, D.C.
By Adam Sieminski, Administrator U.S. Energy Information Administration U.S. Energy Information Administration
Independent Statistics & Analysis
www.eia.gov
These seven regions accounted for 95% of U.S. oil production growth and all U.S. natural gas production growth from 2011-2013
Source: EIA, Drilling Productivity Report Center for Strategic and International Studies October 15, 2014
2
The U.S. has experienced a rapid increase in natural gas and oil production from shale and other tight resources
Eagle Ford (TX)
U.S. tight oil production million barrels of oil per day 4.5
Bakken (MT & ND) Spraberry (TX & NM Permian)
4.0
Delaware (TX & NM Permian) Yeso-Glorieta (TX & NM Permian) Niobrara-Codell (CO, WY) Haynesville Utica (OH, PA & WV) Marcellus Woodford (OK) Granite Wash (OK & TX) Austin Chalk (LA & TX)
Haynesville (LA & TX) Eagle Ford (TX)
Bonespring (TX & NM Permian) Wolfcamp (TX & NM Permian)
U.S. dry shale gas production billion cubic feet per day 40 Marcellus (PA & WV)
3.5
Fayetteville (AR)
3.0
Barnett (TX)
2.5
Woodford (OK) Bakken (ND)
2.0
Antrim (MI, IN, & OH)
1.5
Utica (OH, PA & WV) Rest of US 'shale'
1.0
35 30 25 20 15
10
Monterey (CA)
2000 2002 2004 2006 2008 2010 2012 2014
0.5
5
0.0
0 2000 2002 2004 2006 2008 2010 2012 2014
Sources: EIA derived from state administrative data collected by DrillingInfo Inc. Data are through August 2014 and represent EIA’s official tight oil & shale gas estimates, but are not survey data. State abbreviations indicate primary state(s). Center for Strategic and International Studies October 15, 2014
3
U.S. shale gas leads growth in total gas production through 2040, when production exceeds 100 billion cubic feet per day U.S. dry natural gas production trillion cubic feet 40
billion cubic feet per day
2012
projections
history
100
35
90 30
80
25
70 60
20
Shale gas
50
15 10
40 Tight gas
Non-associated onshore
30 20
5
Non-associated offshore
0 1990
Alaska Associated with oil Coalbed methane
1995
2000
2005
2010
2015
2020
2025
2030
2035
10
0 2040
Source: EIA, Annual Energy Outlook 2014, Reference case Center for Strategic and International Studies October 15, 2014
4
Natural gas consumption growth is driven by electric power, industrial, and transportation use U.S. dry gas consumption trillion cubic feet 35.0
history
projections
30.0 11.0
25.0
electric power
8.5
20.0 15.0
11.2
industrial*
9.1
10.0 0.7 2.9
5.0
4.2
1.7
transportation**
3.6
commercial
4.1
residential
0.0 2005
2012
2020
2025
Source: EIA, Annual Energy Outlook 2014, Reference case Center for Strategic and International Studies October 15, 2014
2030
2035
2040
*Includes combined heat-and-power and lease and plant fuel **Includes pipeline fuel
5
U.S. becomes a net exporter of natural gas in the near future U.S. dry natural gas trillion cubic feet per year history 40
billion cubic feet per day projections
2012
100 30 75
Consumption 20
50
Domestic supply 10
Net exports
0
-10 1990
25
0
-25
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
Source: EIA, Annual Energy Outlook 2014 Reference case Center for Strategic and International Studies October 15, 2014
6
Projected U.S. natural gas trade depends on assumptions regarding resources and future technology advances Reference case trillion cubic feet per year 8
High Oil and Gas Resource case trillion cubic feet per year 8
6
6
4
exports to Mexico 4 exports to Canada
2
2
billion cubic feet per day 20
15
10 5
0
lower 48 LNG exports 0
0
-2
imports from Canada -2
-5
LNG imports -4 2010
2015
2020
2025
-4 2010
-10 2015
2020
2025
Source: EIA, Annual Energy Outlook 2014, Reference case and High Oil and Gas Resource case Center for Strategic and International Studies October 15, 2014
7
Resource and technology assumptions have major implications for projected U.S. crude oil production beyond the next few years High Oil and Gas Resource case million barrels per day
Reference case million barrels per day 2012
14 history
2012
14 history
projections
projections
12 STEO October 2014 U.S. crude oil projection
12
10
10
tight oil 8
tight oil
8 6
6
4
other lower 48 states onshore
4
2
lower 48 states offshore Alaska
2
0 1990
2000
2010
2020
other lower 48 states onshore lower 48 states offshore
Alaska 0 1990 2000
2010
2020
Source: EIA, Annual Energy Outlook 2014; Short Term Energy Outlook, October 2014 Center for Strategic and International Studies October 15, 2014
8
Crude oil and associated liquids contain a wide variety of hydrocarbons
Source: EIA via Harvey Crude Assay Management System Center for Strategic and International Studies October 15, 2014
9
U.S. is already a major net exporter of petroleum products U.S. petroleum product net exports million barrels per day 3 2015(e)
2
1
0
-1
-2
-3 1950
1960
1970
1980
1990
2000
2010
Source: EIA, Annual Energy Outlook 2014 Reference case and Short Term Energy Outlook Center for Strategic and International Studies October 15, 2014
10
Growing U.S. oil production and rising demand in China have together made China the world’s largest net oil importer net imports for China and the United States million barrels per day 10 9
Aug-14 history
projections
U.S. net imports
8 7 6 5 China net imports
4 3 2
1 0 Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Note: Net oil imports are defined as total liquid fuels consumption less domestic production Source: EIA, Short-Term Energy Outlook, October 2014 Center for Strategic and International Studies October 15, 2014
11
U.S. is the largest producer of petroleum and natural gas in the world estimated U.S., Russia, and Saudi Arabia petroleum and natural gas production quadrillion Btu million barrels per day of oil equivalent 60.0 50.0
30
United States Russia
25
Saudi Arabia
40.0
20
30.0 natural gas
15
20.0
10
10.0 petroleum
5
0.0
2008
2009
2010
2011
2012
2013
2014e
0
Source: U.S. Energy Information Administration Note: Petroleum production includes crude oil, natural gas liquids, condensates, refinery processing gain, and other liquids, including biofuels; barrels per day oil equivalent were calculated using a conversion factor of 1 barrel oil equivalent=5.55 million British thermal units (Btu) Center for Strategic and International Studies October 15, 2014
12
Tight oil production will spread to nations outside of the United States and Canada over the projection tight oil production, Reference case million barrels per day 8
AEO2014 High Resource case
7
2010
2025
2040
6 5 5.0 MMbbl/d in 2015 (STEO)
4
3.9 MMbbl/d in 2014 (STEO)
3
2.9 MMbbl/d in 2013
2 1 0 United States
Canada
Mexico
Russia
Argentina
China
Rest of world
Source: EIA, International Energy Outlook 2014 Center for Strategic and International Studies October 15, 2014
13
EIA Reference scenario shows world tight oil production increasing to almost 8 million b/d in 2025 tight oil production million barrels per day history 2012 10
projections World (IEO2014 Reference case)
8
6 U.S. (AEO2014 & IEO2014 Reference case)
4
2
0 2005
2010
2015
2020
2025
2030
2035
2040
Source: EIA, Annual Energy Outlook 2014 and International Energy Outlook 2014 Center for Strategic and International Studies October 15, 2014
14
Most significant contributors to non-OPEC crude and lease condensate production: Canada, Brazil, U.S., Kazakhstan, Russia non-OPEC crude and lease condensate production, Reference case million barrels per day 24 2010
2025
2040
18
12
6
0 Canada
United States
Mexico
Brazil
Kazakhstan
Russia
Other
Source: EIA, International Energy Outlook 2014 Center for Strategic and International Studies October 15, 2014
15
Over the IEO projection, OPEC crude and lease condensate suppliers produce an additional 14 MMbbl/d petroleum and other liquid fuels production, Reference case million barrels per day history
projections
60 53
50 non-OPEC crude and lease condensate
43
46
40 33
OPEC crude and lease condensate
30
20
20 12 other liquid fuels
10 0 2000
2005
2010
2015
2020
2025
2030
2035
2040
Source: EIA, International Energy Outlook 2014 Center for Strategic and International Studies October 15, 2014
16
Areas of uncertainty in the outlook • China’s energy demand growth; particularly in transportation – EIA is working with MIT and others to upgrade the structural and macroeconomic determinates of transportation demand in all regions for IEO2015
• Increasing global trade of natural gas and HGL in addition to oil – EIA is integrating the representation of oil and natural gas supply and other hydrocarbons
• Global development of tight oil and shale gas resources – EIA is gathering geology and production information, and conducting outreach
• Impact of geopolitical tensions on energy supply – EIA exploring options for representing these uncertainties in the outlook
Center for Strategic and International Studies October 15, 2014
17
For more information 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 Portal | www.eia.gov/state
Drilling Productivity Report | www.eia.gov/petroleum/drilling/
Center for Strategic and International Studies October 15, 2014
18
For The Center for Strategic and International Studies October 15, 2014 | Washington, D.C.
By Adam Sieminski, Administrator U.S. Energy Information Administration U.S. Energy Information Administration
Independent Statistics & Analysis
www.eia.gov
These seven regions accounted for 95% of U.S. oil production growth and all U.S. natural gas production growth from 2011-2013
Source: EIA, Drilling Productivity Report Center for Strategic and International Studies October 15, 2014
2
The U.S. has experienced a rapid increase in natural gas and oil production from shale and other tight resources
Eagle Ford (TX)
U.S. tight oil production million barrels of oil per day 4.5
Bakken (MT & ND) Spraberry (TX & NM Permian)
4.0
Delaware (TX & NM Permian) Yeso-Glorieta (TX & NM Permian) Niobrara-Codell (CO, WY) Haynesville Utica (OH, PA & WV) Marcellus Woodford (OK) Granite Wash (OK & TX) Austin Chalk (LA & TX)
Haynesville (LA & TX) Eagle Ford (TX)
Bonespring (TX & NM Permian) Wolfcamp (TX & NM Permian)
U.S. dry shale gas production billion cubic feet per day 40 Marcellus (PA & WV)
3.5
Fayetteville (AR)
3.0
Barnett (TX)
2.5
Woodford (OK) Bakken (ND)
2.0
Antrim (MI, IN, & OH)
1.5
Utica (OH, PA & WV) Rest of US 'shale'
1.0
35 30 25 20 15
10
Monterey (CA)
2000 2002 2004 2006 2008 2010 2012 2014
0.5
5
0.0
0 2000 2002 2004 2006 2008 2010 2012 2014
Sources: EIA derived from state administrative data collected by DrillingInfo Inc. Data are through August 2014 and represent EIA’s official tight oil & shale gas estimates, but are not survey data. State abbreviations indicate primary state(s). Center for Strategic and International Studies October 15, 2014
3
U.S. shale gas leads growth in total gas production through 2040, when production exceeds 100 billion cubic feet per day U.S. dry natural gas production trillion cubic feet 40
billion cubic feet per day
2012
projections
history
100
35
90 30
80
25
70 60
20
Shale gas
50
15 10
40 Tight gas
Non-associated onshore
30 20
5
Non-associated offshore
0 1990
Alaska Associated with oil Coalbed methane
1995
2000
2005
2010
2015
2020
2025
2030
2035
10
0 2040
Source: EIA, Annual Energy Outlook 2014, Reference case Center for Strategic and International Studies October 15, 2014
4
Natural gas consumption growth is driven by electric power, industrial, and transportation use U.S. dry gas consumption trillion cubic feet 35.0
history
projections
30.0 11.0
25.0
electric power
8.5
20.0 15.0
11.2
industrial*
9.1
10.0 0.7 2.9
5.0
4.2
1.7
transportation**
3.6
commercial
4.1
residential
0.0 2005
2012
2020
2025
Source: EIA, Annual Energy Outlook 2014, Reference case Center for Strategic and International Studies October 15, 2014
2030
2035
2040
*Includes combined heat-and-power and lease and plant fuel **Includes pipeline fuel
5
U.S. becomes a net exporter of natural gas in the near future U.S. dry natural gas trillion cubic feet per year history 40
billion cubic feet per day projections
2012
100 30 75
Consumption 20
50
Domestic supply 10
Net exports
0
-10 1990
25
0
-25
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
Source: EIA, Annual Energy Outlook 2014 Reference case Center for Strategic and International Studies October 15, 2014
6
Projected U.S. natural gas trade depends on assumptions regarding resources and future technology advances Reference case trillion cubic feet per year 8
High Oil and Gas Resource case trillion cubic feet per year 8
6
6
4
exports to Mexico 4 exports to Canada
2
2
billion cubic feet per day 20
15
10 5
0
lower 48 LNG exports 0
0
-2
imports from Canada -2
-5
LNG imports -4 2010
2015
2020
2025
-4 2010
-10 2015
2020
2025
Source: EIA, Annual Energy Outlook 2014, Reference case and High Oil and Gas Resource case Center for Strategic and International Studies October 15, 2014
7
Resource and technology assumptions have major implications for projected U.S. crude oil production beyond the next few years High Oil and Gas Resource case million barrels per day
Reference case million barrels per day 2012
14 history
2012
14 history
projections
projections
12 STEO October 2014 U.S. crude oil projection
12
10
10
tight oil 8
tight oil
8 6
6
4
other lower 48 states onshore
4
2
lower 48 states offshore Alaska
2
0 1990
2000
2010
2020
other lower 48 states onshore lower 48 states offshore
Alaska 0 1990 2000
2010
2020
Source: EIA, Annual Energy Outlook 2014; Short Term Energy Outlook, October 2014 Center for Strategic and International Studies October 15, 2014
8
Crude oil and associated liquids contain a wide variety of hydrocarbons
Source: EIA via Harvey Crude Assay Management System Center for Strategic and International Studies October 15, 2014
9
U.S. is already a major net exporter of petroleum products U.S. petroleum product net exports million barrels per day 3 2015(e)
2
1
0
-1
-2
-3 1950
1960
1970
1980
1990
2000
2010
Source: EIA, Annual Energy Outlook 2014 Reference case and Short Term Energy Outlook Center for Strategic and International Studies October 15, 2014
10
Growing U.S. oil production and rising demand in China have together made China the world’s largest net oil importer net imports for China and the United States million barrels per day 10 9
Aug-14 history
projections
U.S. net imports
8 7 6 5 China net imports
4 3 2
1 0 Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Note: Net oil imports are defined as total liquid fuels consumption less domestic production Source: EIA, Short-Term Energy Outlook, October 2014 Center for Strategic and International Studies October 15, 2014
11
U.S. is the largest producer of petroleum and natural gas in the world estimated U.S., Russia, and Saudi Arabia petroleum and natural gas production quadrillion Btu million barrels per day of oil equivalent 60.0 50.0
30
United States Russia
25
Saudi Arabia
40.0
20
30.0 natural gas
15
20.0
10
10.0 petroleum
5
0.0
2008
2009
2010
2011
2012
2013
2014e
0
Source: U.S. Energy Information Administration Note: Petroleum production includes crude oil, natural gas liquids, condensates, refinery processing gain, and other liquids, including biofuels; barrels per day oil equivalent were calculated using a conversion factor of 1 barrel oil equivalent=5.55 million British thermal units (Btu) Center for Strategic and International Studies October 15, 2014
12
Tight oil production will spread to nations outside of the United States and Canada over the projection tight oil production, Reference case million barrels per day 8
AEO2014 High Resource case
7
2010
2025
2040
6 5 5.0 MMbbl/d in 2015 (STEO)
4
3.9 MMbbl/d in 2014 (STEO)
3
2.9 MMbbl/d in 2013
2 1 0 United States
Canada
Mexico
Russia
Argentina
China
Rest of world
Source: EIA, International Energy Outlook 2014 Center for Strategic and International Studies October 15, 2014
13
EIA Reference scenario shows world tight oil production increasing to almost 8 million b/d in 2025 tight oil production million barrels per day history 2012 10
projections World (IEO2014 Reference case)
8
6 U.S. (AEO2014 & IEO2014 Reference case)
4
2
0 2005
2010
2015
2020
2025
2030
2035
2040
Source: EIA, Annual Energy Outlook 2014 and International Energy Outlook 2014 Center for Strategic and International Studies October 15, 2014
14
Most significant contributors to non-OPEC crude and lease condensate production: Canada, Brazil, U.S., Kazakhstan, Russia non-OPEC crude and lease condensate production, Reference case million barrels per day 24 2010
2025
2040
18
12
6
0 Canada
United States
Mexico
Brazil
Kazakhstan
Russia
Other
Source: EIA, International Energy Outlook 2014 Center for Strategic and International Studies October 15, 2014
15
Over the IEO projection, OPEC crude and lease condensate suppliers produce an additional 14 MMbbl/d petroleum and other liquid fuels production, Reference case million barrels per day history
projections
60 53
50 non-OPEC crude and lease condensate
43
46
40 33
OPEC crude and lease condensate
30
20
20 12 other liquid fuels
10 0 2000
2005
2010
2015
2020
2025
2030
2035
2040
Source: EIA, International Energy Outlook 2014 Center for Strategic and International Studies October 15, 2014
16
Areas of uncertainty in the outlook • China’s energy demand growth; particularly in transportation – EIA is working with MIT and others to upgrade the structural and macroeconomic determinates of transportation demand in all regions for IEO2015
• Increasing global trade of natural gas and HGL in addition to oil – EIA is integrating the representation of oil and natural gas supply and other hydrocarbons
• Global development of tight oil and shale gas resources – EIA is gathering geology and production information, and conducting outreach
• Impact of geopolitical tensions on energy supply – EIA exploring options for representing these uncertainties in the outlook
Center for Strategic and International Studies October 15, 2014
17
For more information 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 Portal | www.eia.gov/state
Drilling Productivity Report | www.eia.gov/petroleum/drilling/
Center for Strategic and International Studies October 15, 2014
18
