outlook for u.s. shale oil and gas; march 27, · pdf fileu.s. energy information...

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

Outlook for U.S. shale oil and gas

International Monetary Fund March 27, 2014 | Washington, DC By Adam Sieminski, EIA Administrator

The U.S. has experienced a rapid increase in natural gas and oil production from shale and other tight resources

2

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0Eagle Ford (TX)Bakken (MT & ND)Spraberry (TX & NM Permian)Bonespring (TX & NM Permian)Wolfcamp (TX & NM Permian)Yeso-Glorieta (TX & NM Permian)Niobrara-Codell (CO, WY)Haynesville (LA & TX)Marcellus (PA & WV)Woodford (OK)Granite Wash (OK & TX)Austin Chalk (LA & TX)Monterey (CA)

U.S. tight oil production million barrels of oil per day

0

5

10

15

20

25

30

35Marcellus (PA & WV)Haynesville (LA & TX)Eagle Ford (TX)Fayetteville (AR)Barnett (TX)Woodford (OK)Bakken (ND)Antrim (MI, IN, & OH)Rest of US 'shale'

U.S. dry shale gas production billion cubic feet per day

Sources: EIA derived from state administrative data collected by DrillingInfo Inc. Data are through February 2014 and represent EIA’s official tight oil & shale gas estimates, but are not survey data. State abbreviations indicate primary state(s).

International Monetary Fund March 27, 2014

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

3 International Monetary Fund March 27, 2014

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

4

U.S. dry natural gas production trillion cubic feet

Source: EIA, Annual Energy Outlook 2014 Early Release

0

10

20

30

40

50

60

70

80

90

100

0

5

10

15

20

25

30

35

40

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Associated with oil Coalbed methane

Tight gas

Shale gas

Alaska Non-associated offshore

Non-associated onshore

Projections History 2012


billion cubic feet per day

5

0

5

10

15

20

25

30

35

2005 2012 2020 2025 2030 2035 2040

U.S. dry gas consumption trillion cubic feet


Projections History

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


U.S. manufacturing output and natural gas use grows with low natural gas prices, particularly in the near term

6

manufacturing natural gas consumption quadrillion Btu



0

4

8

12

16

20

24

0

1

2

3

4

5

6

7

8

9

2010 2025 2040Aluminum Glass

Iron and steel

Paper

Food

Refining and related

Bulk chemicals

Other

Metal based


durables

manufacturing

0.0

0.5

1.0

1.5

2.0

2.5

0

100

200

300

400

500

600

700

800

900

2010 2015 2020 2025 2030 2035 2040

U.S. natural gas use in the transportation sector grows rapidly with the largest share in freight trucks

7

natural gas use by mode trillion Btu



Freight trucks

Buses

Freight rail and marine Light-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

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

8

U.S. dry natural gas trillion cubic feet per year



-10

0

10

20

30

40

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040


Consumption

Domestic supply

Net exports

100

75

50

25

0

-25


Growing tight oil and offshore crude oil production drive U.S. output close to historical high

9

U.S. crude oil production million barrels per day


0

2

4

6

8

10

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Tight oil

Alaska

Other lower 48 onshore

Lower 48 offshore



U.S. maximum production level of 9.6 million barrels per day in 1970

0

5

10

15

20

25

30

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

U.S. transportation sector motor gasoline demand declines, while diesel fuel accounts for a growing portion of the market

10

transportation energy consumption by fuel quadrillion Btu




59% Motor gasoline

Jet fuel

CNG/LNG

12% 13% 3%

44%

31%

3% 4% Other*

Diesel 22%

2030

47%

13% 3%

30%

1%

2040

Ethanol 4% 5%

5%

*Includes aviation gasoline, propane, residual fuel oil, lubricants, electricity, and liquid hydrogen

U.S. petroleum product imports and exports million barrels per day

-4

-3

-2

-1

0

1

2

3

4

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040

Other petroleum product imports

Distillate exports

Motor gasoline exports

Other petroleum product exports

Distillate imports

Motor gasoline imports


International Monetary Fund March 27, 2014 11

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


Total petroleum product net exports

Although oil use is slightly increased in the High Resource case due to lower prices, net import dependence declines rapidly

0

5

10

15

20

25

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

U.S. liquid fuel supply million barrels per day

Source: EIA, Annual Energy Outlook 2014 Reference case and High Resource / Improved Technology case

Consumption

Domestic supply

Net imports 40% 32%


2005

60%

25%

2016 2040

High Resource


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

China is now the world’s largest net oil importer

13

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, March 2014

Forecast History

China net imports

United States net imports

Mar-14


OPEC countries now account for most unplanned outages

14

estimated unplanned crude oil production outages thousand barrels per day

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

Non- OPEC

OPEC

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Jan-2012 Jul-2012 Jan-2013 Jul-2013 Jan-2014

Other Non-OPEC

Syria

Sudan / S. Sudan

Iraq

Nigeria

Libya

Iran


Key findings of the EIA’s International Energy Outlook 2013

• With world GDP rising by 3.6 percent per year, world energy use will grow by 56 percent between 2010 and 2040; half of the increase is attributed to China and India

• Renewable energy and nuclear power are the world’s fastest-growing energy sources, each increasing by 2.5 percent per year; however, fossil fuels continue to supply almost 80 percent of world energy use through 2040

• Natural gas is the fastest growing fossil fuel in the outlook, supported by increasing supplies of shale gas, particularly in the United States

• Coal grows faster than petroleum consumption until after 2030, mostly due to increases in China’s consumption of coal, and slow growth in oil demand in OECD member countries

• Given current policies and regulations, worldwide energy-related carbon dioxide emissions are projected to increase 46 percent by 2040, reaching 45 billion metric tons in 2040


Economic activity and population drive increases in energy use; energy intensity improvements moderate this trend

16

average annual change (2010-2040) percent per year

-4

-3

-2

-1

0

1

2

3

4

5

6

7

U.S. OECDEurope

Japan SouthKorea

China India Brazil MiddleEast

Africa Russia

Energy Intensity GDP per capita Population


Source: EIA, International Energy Outlook 2013

Regional 10-year real GDP growth rates


decade average percent per year


0%

2%

4%

6%

8%

10%

12%

OECD Other Non-OECD China India World

2000-2010 2010-2020

2020-2030 2030-2040

Renewable energy and nuclear power are the fastest growing source of world energy consumption out to 2040 world energy consumption by fuel quadrillion Btu

0

50

100

150

200

250

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Liquids (including biofuels)

Renewables (excluding biofuels)

Natural gas

Coal

Nuclear

History Projections 2010

34%

28%

22%

11%

5%

28%

27% 23%

7%

15%

share of world total



World net electricity generation continues to be led by coal


0

5

10

15

20

25

30

35

40

45

2010 2015 2020 2025 2030 2035 2040

Coal

Renewables

Natural gas

Nuclear Liquids

trillion kilowatthours


World petroleum and other liquids production exceeds 100 MMbbl/d after 2025


0

20

40

60

80

100

120

2010 2015 2020 2025 2030 2035 2040

million barrels per day


Rest of non-OECD

Russia Rest of OECD Canada United States

OPEC

World natural gas production to keep growing


0

20

40

60

80

100

120

140

160

180

200

2010 2015 2020 2025 2030 2035 2040

trillion cubic feet


Middle East and North Africa

Russia

Rest of OECD Canada United States

China

Rest of non-OECD

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.


Non-OPEC oil supply growth is concentrated in five countries


0

2

4

6

8

10

12

14

Brazil Canada Kazakhstan UnitedStates

Russia OECDEurope

Mexico/Chile

2010 2040

non-OPEC petroleum production million barrels per day


OPEC market share grows after 2025

24


0

10

20

30

40

50

60

70

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Non-OPEC petroleum liquids

OPEC petroleum liquids

Nonpetroleum


world liquids production million barrels per day


62

49

5

50

35

2

World energy-related carbon dioxide emissions continue to grow

25


0

5

10

15

20

25

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Liquid fuels

Coal

Natural gas


carbon dioxide emissions billion metric tons


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/

http://www.eia.gov/

http://www.eia.gov/aeo

http://www.eia.gov/steo

http://www.eia.gov/ieo

http://www.eia.gov/mer

http://www.eia.gov/todayinenergy

http://www.eia.gov/state

http://www.eia.gov/petroleum/drilling/

outlook for u.s. shale oil and gas; march 27, · pdf fileu.s. energy information...

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