Annual Energy Outlook 2013 Early Release Reference Case€¦ · – economics of ethane rejection ... U.S. propane exports have grown in the past few years; exports averaged over

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

Energy Exports

for Benposium 2015 June 9, 2015 | Houston, Texas by Howard Gruenspecht, Deputy Administrator

Key Takeaways

2

• In most of EIA’s current projection cases, U.S. net energy imports, including all fuels, decline and ultimately end for the first time since the 1950s

– Strong growth in domestic production of crude oil from tight formations through 2020 and limited growth in domestic demand after 2020 leads to a decline in net petroleum and other liquids imports. With high prices or high resources, the United States becomes a net exporter of petroleum and other liquids.

– The United States transitions from being a net importer of natural gas to a net exporter by 2017 in all cases

• Exports, both net and gross, have been rising rapidly. Key drivers in the export outlook vary across fuels and timeframes

• Natural gas exports – drivers looking forward:

– U.S. resource and technology scenario (a key driver of domestic gas prices); global energy market prices (which along with domestic prices defines the “gap” that determines the incentive for investment in natural gas export facilities and their use

– Environmental and energy policies that significantly affect domestic natural gas demand, such as the final Clean Power Plan

– Mexico demand (pipeline exports)

Benposium2015, Energy exports June 9, 2015

Key takeaways

3

• HGL exports – drivers looking forward

– production of HGLs, primarily linked to natural gas production

– domestic consumption of HGL feedstock

– spreads between domestic and global prices

– economics of ethane rejection

• Crude oil and non-HGL petroleum product exports – drivers looking forward

– With fuel efficiency policies moderating the domestic consumption response to price and economic changes, domestic crude oil production growth, reflecting resources, technology, and prices, is key driver of combined crude oil and non-HGL product exports.

– In high production scenarios under current laws and policies that allow unrestricted exports of processed petroleum products but restrict crude exports, product exports grow significantly

– Without restrictions on crude exports, crude export growth would displace a portion of product export growth in high production scenarios


How we got here and where we might be going

4 Benposium2015, Energy exports June 9, 2015

-30

-20

-10

0

10

20

30

40

2005 2010 2015 2020 2025 2030 2035 2040

U.S. net energy imports continue to decline in the near term, reflecting increased oil and natural gas production coupled with slow demand growth

5

U.S. net energy imports quadrillion Btu

Source: EIA, Annual Energy Outlook 2015

History Projections 2013

High Oil Price

High Oil and Gas Resource

Reference Low Oil Price


U.S. natural gas imports and exports trillion cubic feet

-8

-4

0

4

8

12

16

2000 2010 2020 2030 2040 2020 2030 2040 2020 2030 2040

LNG imports


6

billion cubic feet per day

Projected U.S. natural gas exports reflect the spread between domestic natural gas prices and world energy prices

Projections History 2013

-10

0

10

20

2013 2013

30

40

-20 Reference Low Oil Price High Oil and Gas

Resource

Pipeline exports to Mexico

Lower 48 states LNG exports

Pipeline exports to Canada Pipeline imports from Canada

Alaska LNG exports


-30

-20

-10

0

10

20

30

40

50

60

70

2005 2010 2015 2020 2025 2030 2035 2040

Net liquid imports are a declining share of U.S. liquid fuels use in most AEO2015 cases; in two cases the nation becomes a net liquids exporter

7

net crude oil and petroleum product imports as a percentage of total U.S. supply percent



High Oil Price


Reference

Low Oil Price


U.S. net imports of crude oil and petroleum products declined by more than 7 million b/d over the past decade

Benposium2015, Energy exports June 9, 2015 8

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15

imports

net imports

exports

U.S. imports and exports of crude oil and petroleum products thousand barrels per day

Source: EIA, Petroleum Supply Monthly

Hydrocarbon Gas Liquids


0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2008 2009 2010 2011 2012 2013 2014 2015 2016

Natural gas plant liquids production

Natural gas marketed production

Growth in U.S. HGL production from natural gas plants is outpacing marketed gas production growth

10

Production indexed to Jan. 2008

Source: EIA


History Forecast

U.S. propane exports have grown in the past few years; exports averaged over 500 kb/d in the first quarter of 2015


U.S. imports and exports of propane thousand barrels per day


-600

-400

-200

0

200

400

600

800


imports

net imports

exports

Current U.S. propane/butane export capacity is fully utilized as exports continue to rise

12

Monthly exports thousand barrels per day

Note: Monthly throughput can exceed annualized nameplate export capacity. Source: Export data from EIA; Capacity calculated from company and news reports


0

100

200

300

400

500

600

700

800

900

Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15

Butanes Exports

Propane Exports

Non-ref export capacity

Refrigerated export capacity

Significant discounting of HGL prices in North American markets persists


International propane prices U.S. dollars per gallon

International butane prices U.S. dollars per gallon

0.00

0.50

1.00

1.50

2.00

2.50

3.00

2009 2010 2011 2012 2013 2014 2015

Saudi Aramco ContractMt. Belvieu Spot

Note: All prices through 06/01/2015 are close-of-day prices except for Aramco (monthly posted). Source: EIA via Bloomberg

0.00

0.50

1.00

1.50

2.00

2.50

3.00

2009 2010 2011 2012 2013 2014 2015

Far East Index SwapSaudi Aramco ContractN.W. Europe 1st Month SwapMt. Belvieu Spot

0

5

10

15

20

25

30

2008 2009 2010 2011 2012 2013 2014 2015

Motor Gasoline

Natural Gasoline

Iso-Butane

Normal Butane

Propane

Natural Gas

Ethane

Domestic HGL prices have broken from historical linkage to refined petroleum product prices


Note: All prices through 06/01/2015 are monthly average close-of-day spot prices; natural gas is Henry Hub, motor gasoline is Gulf Coast, and NGL components are Mt. Belvieu non-LST. Source: EIA via Bloomberg.

Gulf Coast spot prices dollars per million Btu

U.S. and Canadian petrochemical industry is responding with significant cracking capacity expansion using ethane feedstock


Company Location Ethane throughput1

(1,000 bbl/d) Status2 2013 2018

Existing, restarts, and capacity expansions 1,085 1,137 C/U

Feedstock conversions 19 132 C/U

New Plants ExxonMobil Chemical Co. Baytown, TX 90 U

Formosa Plastics Corp. Point Comfort, TX 63 U

Chevron Phillips Chemical Baytown, TX 90 U

Dow Chemical Co. Freeport, TX 95 U

OxyChem/Mexichem Ingleside, TX 33 U

Sasol Chemicals Lake Charles, LA 90 U

Shin-Etsu Plaquemine, LA 30 P

New 2014-18 plants 491

Total 1,105 1,760

1 Ethane throughput calculated based on plant nameplate ethylene production capacity and stated feed type 2 Status: Proposed (Q), FEED (F), Permitted (P), Under Construction (U), Completed (C) Source: EIA based on news reports and company filings.

U.S. petrochemical industry is also responding with significant propane dehydrogenation capacity build out


Company Location Propane throughput1

(1000 b/d) Status2

2013 2018

Existing Houston, TX 30 30 C

New Plants

Dow Chemical Freeport, TX 35 U

Enterprise Mont Belvieu, TX 35 U

Formosa Plastics Point Comfort, TX 34 U

C3 (Ascend) Petrochemicals Alvin, TX 47 P

REXtac Odessa, TX 14 F

Dow Chemical Freeport, TX 25 Q

Total 30 220

1 Propane throughput calculated based on plant nameplate propylene production capacity and historical reported propane consumption at existing plant 2 Status: Proposed (Q), FEED (F), Permitted (P), Under Construction (U), Completed (C) Source: EIA based on news reports and company filings.

U.S. HGL export capacity is expanding rapidly

17

1 C2 = ethane, C3+C4 = propane + butanes 2 Costs estimates based on publicly available reported data on some of the planned terminals 3 Status: Proposed (Q), FEED (F), Under Construction (U), Completed (C) Source: EIA based on news reports and company filings.


Company Facility Type Product1 Capacity (‘000 bbl/d) Location Est. Cost2

($ million) Completion Status3

Enterprise Refrigerated C3+C4 135 Channelview, TX - Pre-2012 C Targa Resources Semi-Refrigerated C3+C4 50 Galena Park, TX - Pre-2012 C Other Pressurized C3+C4 10 FL, VA, NY, LA - Pre-2012 C Enterprise Refrigerated C3+C4 115 Channelview, TX - 2013, Q1 C Targa Resources Refrigerated C3+C4 120 Galena Park, TX 240 2013, Q3 C Petrogas Energy Pressurized C3+C4 30 Ferndale, WA 242 2014, Q2 C Sunoco Logistics LP Refrigerated C3+C4 40 Marcus Hook, PA 270 2014, Q2 C Targa Resources Refrigerated C3+C4 120 Galena Park, TX 240 2014, Q3 C Sunoco Logistics LP Refrigerated C3+C4 197 Nederland, TX 400 2015, Q1 C Enterprise Refrigerated C3+C4 49 Channelview, TX 100 2015, Q1 C Total existing as of 3Q 2014 870 Occidental Refrigerated C3+C4 75 Corpus Christi, TX 400 2015, Q2 U Sunoco Logistics LP Refrigerated C2 35 Marcus Hook, PA 250 2015, Q3 U Enterprise Refrigerated C3+C4 227 Channelview, TX 500 2015, Q4 U Phillips66 Refrigerated C3+C4 145 Freeport, TX 1,000 2016, Q3 U Enterprise Refrigerated C2 200 Morgan's Point, TX 1,200 2016, Q3 U Pembina Pipeline Co. Refrigerated C3+C4 37 Portland, OR 500 2018 Q Total planned 4Q 2014 – 4Q 2018 720 $3.85 bil.

Average heat content of gas delivered to U.S. consumers in March 2015 was 1,036 Btu/scf; hot gas is a potential source of more ethane for both domestic and export markets


Source: EIA

Non-HGL Petroleum Products and Crude Oil


U.S. net imports of crude oil decreased roughly 2.2 million b/d from 2004 to 2015; crude exports have risen steadily since mid-2013


U.S. imports and exports of crude oil thousand barrels per day


0

2,000

4,000

6,000

8,000

10,000

12,000


imports

net imports

exports

“Swing” in U.S. petroleum products trade from 2 million b/d net imports to 2 million b/d net exports over 2004-15 period


U.S. imports and exports of petroleum products thousand barrels per day


-3,000

-2,000

-1,000

0

1,000

2,000

3,000

4,000

5,000

6,000


imports

net imports

exports

U.S. net imports of gasoline decreased by roughly 900 kb/d over the 2004-15 period; the United States is now a net gasoline exporter in winter months


U.S. imports and exports of gasoline* thousand barrels per day

*Note: Series represents sum of finished gasoline and blending components Source: EIA, Petroleum Supply Monthly

-400

-200

0

200

400

600

800

1,000

1,200

1,400

1,600


imports

net imports

exports

U.S. distillate exports grew steadily since 2004, with monthly exports in the range of 900 kb/d to 1,400 kb/d since early 2012


U.S. imports and exports of distillate thousand barrels per day


-1,500

-1,000

-500

0

500

1,000

1,500


imports

net imports

exports

0

5

10

15

20

25

30

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

In the transportation sector, motor gasoline use declines are driven by fuel economy policies; diesel and jet fuel use grows, but future policies could lower their use

24

transportation energy consumption by fuel quadrillion Btu

Source: EIA, Annual Energy Outlook 2015 Reference case

Projections History 2013

58% Motor gasoline

Jet fuel CNG/LNG

10%

14% 3%

44%

31%

3%

3%

Other*

Diesel 24%

2030

48%

13%

2%

31%

1%

2040

Ethanol

4%

4% 5%

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


U.S. crude oil production rises above previous historical highs before 2020 in all AEO2015 cases, with a range of longer-term outcomes

25

U.S. crude oil production million barrels per day


0

5

10

15

20

1990 2000 2010 2020 2030 2040 2020 2030 2040 2020 2030 2040

Tight oil

Alaska

Lower 48 offshore

History 2013 2013 2013

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

Other lower 48 onshore

Reference High Oil and Gas Resource

Low Oil Price


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

-4

0

4

8

12

1990 2000 2010 2020 2030 2040 2020 2030 2040 2020 2030 2040

Other petroleum product imports

Distillate

Motor gasoline exports

Other petroleum product exports


26

U.S. net exports of petroleum products vary with the level of domestic oil production given current limits on U.S. crude oil exports

History 2013 Reference Low Oil Price

2013 2013

Motor gasoline imports


Distillate imports

-4

0

4

8

12

2005 2010 2015 2020 2025 2030 2035 2040

Total petroleum product net exports

exports

Reference

Low Oil Price

High Oil and Gas Resource Total petroleum product

net exports


Further thoughts on crude oil and petroleum product exports

27

• Future exports of crude oil and petroleum products taken together tend to rise with higher domestic production and decline with higher domestic consumption

• In high production scenarios under current laws and policies that allow unrestricted exports of processed petroleum products but restrict crude exports, product exports grow significantly

• Without restrictions on crude exports, crude export growth would displace a portion of product export growth in high production scenarios

• EIA has prepared several analyses related to this topic, and expects to provide an additional integrated analysis this summer

• With changing and volatile export markets, EIA is working to improve its export data through an agreement with Customs and Border Protection. This high-priority effort will enable EIA sharpen its closely watched weekly petroleum balances


For more information

28

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

State Energy Portal | www.eia.gov/state

Drilling Productivity Report | www.eia.gov/petroleum/drilling


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/state

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

Propane and ethane production growth has driven the steady increase in U.S. HGL production


million bbl/d 2008 2009 2010 2011 2012 2013 2014 2015 Q1 change 2008-14

Ethane 0.71 0.78 0.88 0.94 0.99 0.98 1.08 1.06 51% Propane 0.82 0.84 0.87 0.90 0.99 1.11 1.28 1.35 55% Normal butane 0.22 0.21 0.24 0.21 0.24 0.28 0.35 0.25 56% Isobutane 0.18 0.19 0.18 0.21 0.23 0.24 0.26 0.26 44% Natural gasoline 0.26 0.27 0.28 0.29 0.32 0.35 0.39 0.39 47% Propylene & other refinery olefins 0.21 0.25 0.28 0.29 0.28 0.28 0.28 0.25 35%

HGL total 2.41 2.53 2.73 2.84 3.04 3.23 3.63 3.57 50%

• Propane remains the largest-volume and highest-revenue HGL purity product

• Ethane production levels are increasing because of continuing investments in de-ethanization facilities, and ethane pipelines and export terminals.

Note: 2015 Q1 includes January to March data. Source: EIA U.S. Refiner & Blender Production and U.S. Natural Gas Plant Field Production.

http://www.eia.gov/dnav/pet/pet_pnp_refp_dc_nus_mbbl_m.htm

http://www.eia.gov/dnav/pet/pet_pnp_gp_dc_nus_mbbl_m.htm

-15

-10

-5

0

5

2005 2010 2015 2020 2025 2030 2035 2040

Level of net natural gas trade, including LNG exports, depends largely on resource levels and world energy prices

30

U.S. total net natural gas imports trillion cubic feet



High Oil Price


Reference

Low Oil Price

billion cubic feet per day

-30

-20

-10

0

10

-40


20

25

30

35

2010 2015 2020 2025 2030 2035 2040

Industrial energy use rises with growth of shale gas supply

31

industrial sector total delivered energy consumption quadrillion Btu


Projections 2013

High Economic Growth

Reference

Low Economic Growth


0

3

6

9

12

2005 2010 2015 2020 2025 2030 2035 2040

Future domestic natural gas prices depend on both domestic resource availability and world energy prices

32

average Henry Hub spot prices for natural gas 2013 dollars per million Btu



High Oil Price

Reference


Low Oil Price


60

70

80

90

100

110

120

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

Growth in U.S. energy production outstrips consumption leading to a balance in United States energy imports and exports

33

U.S. energy production and consumption quadrillion Btu

Source: EIA, Annual Energy Outlook 2015 Reference case


-1% Consumption

Production

13%

2020 2040

Net imports


Documents

Annual Energy Outlook 2013 Early Release Reference Case€¦ · – economics of ethane rejection ... U.S. propane exports have grown in the past few years; exports averaged over