www.eia.govU.S. Energy Information Administration Independent Statistics & Analysis
Prospects for U.S. Oil & Natural Gas
for
The Aspen Institute: Global Energy Forum
July 20, 2012| Aspen, CO
by
Adam Sieminski, Administrator
Primary energy use by fuel, 1980-2035…in absolute terms, all fuels grow except petroleum liquids
2
U.S. energy consumption
quadrillion Btu
Source: EIA, Annual Energy Outlook 2012
ProjectionsHistory 2010
Renewables (excluding biofuels)
Liquid biofuels
Petroleum and other liquids
Coal
Nuclear
Natural gas
21%
37%
9%
25%
7%1%
20%
32%
9%
26%
11%4%
Share of total U.S. energy use
Adam Sieminski July 20, 2012
U.S. shale gas production comprised over 30 percent of total U.S. dry production in 2011
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shale gas production (dry)
billion cubic feet per day
Sources: Lippman Consulting, Inc. gross withdrawal estimates as of May 2012 and converted to dry production estimates with EIA-calculated average gross-to-dry shrinkage factors by state and/or shale play.
Shale gas grows from under a quarter to about half of U.S. gas production from 2010-2035
4
U.S. dry natural gas production
trillion cubic feet
Source: EIA, Annual Energy Outlook 2012
Lower 48 offshore
ProjectionsHistory
Coalbed methane
Lower 48 onshore conventional
Shale gas
2010
Alaska
Tight gas
Adam Sieminski July 20, 2012
1%
12%
6%10%
22%
49%
U.S. production of shale gas in four cases, 2000-2035
5
dry natural gas production
trillion cubic feet
Source: EIA, Annual Energy Outlook 2012
Adam Sieminski July 20, 2012
High EUR
Reference
Low EUR
High TRR
2010History Projections
Technically Recoverable Resource (TRR)Estimated Ultimate Recovery (EUR)
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Lower 48 oil and gas shale plays and federal lands
Source: EIA
7
U.S. dry natural gas
trillion cubic feet
Source: EIA, Annual Energy Outlook 2012
ProjectionsHistory 2010
Consumption
Domestic production
Adam Sieminski July 20, 2012
U.S. becomes a net natural gas exporter in 2022
5%
11%Net imports, 2010
Net exports, 2035
U.S. natural gas spot prices are very low compared to prices in other regions and oil prices
Adam Sieminski July 20, 2012
Sources: EIA, Bloomberg, as of July 17, 2012
8
global spot natural gas and crude oil pricesU.S. dollars per million British thermal unit
Non-hydro renewable sources grow nearly three-fold by 2035; growth climbs nearly five-fold with a price on CO2
9
non-hydropower renewable generation
billion kilowatthours
Source: EIA, Annual Energy Outlook 2012
2025 2035
Wind
Biomass
Geothermal
Solar
Municipalwaste
CoalCost
GasPrice
EconomicGrowth
CoalCost
GasPrice
EconomicGrowth
Adam Sieminski July 20, 2012
2005 2020 2035
Energy-related CO2 emissions
6.00 5.43 5.76
% change from 2005 - - -9.4% -4.0%
Energy-related CO2 emissions never get back to pre-recession levels in the AEO2012 Reference case
10
energy carbon dioxide emissions
billion metric tons
Source: EIA, Annual Energy Outlook 2012
ProjectionsHistory 20102005
Adam Sieminski July 20, 2012
U.S. natural gas prices separate from crude oil price equivalency
11
spot market prices
2010 dollars per million Btu
Source: EIA, Bloomberg
Crude oil (West Texas Intermediate)
Natural gas (Henry Hub)
Adam Sieminski July 20, 2012
Non-OECD liquid fuels use is expected to surpasses almost flat OECD liquid fuels use in the near futuretotal liquids consumptionmillion barrels per day
Source: EIA, Annual Energy Outlook 2012
ProjectionsHistory 2010
Other non-OECD
OECD Americas
OECD
62
48
40%
19%
35%
41
Non-OECD
46
12Adam Sieminski July 20, 2012
Tight oil production for selected plays approaches 900,000 barrels per day in March 2012
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thousand barrels of oil per day
Source: HPDI, Texas RRC, North Dakota department of mineral resources, and EIA, through March, 2012.
U.S. leads the league table for non-OPEC crude oil and liquid fuels growth 2011-13
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Tight oil resource potential and production remain highly uncertain
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tight oil production
million barrels per day
Source: EIA, Annual Energy Outlook 2012
High TRR
Reference
High EUR
Low EUR
Technically Recoverable Resource (TRR)Estimated Ultimate Recovery (EUR)
U.S. imports of liquid fuels fall due to increased domestic production – including biofuels – and greater efficiency
16
U.S. liquid fuels consumption
million barrels per day
Source: EIA, Annual Energy Outlook 2012
EUR TRR
2025 2035
49%
5%
36%
10%
Natural gasplant liquids
Other non-petroleum
petroleumsupply
Biofuels
Net petroleumimports
Domestic
includingimports
EUREUR TRREURsupplyReference Reference
Adam Sieminski July 20, 2012
U.S. dependence on imported petroleum declines…moves even lower in various “side case” scenariosU.S. liquid fuel supply
million barrels per day
ProjectionsHistory 2010
Consumption
Domestic supply
Net petroleum imports49%
36%
60%
2005
Source: EIA, Annual Energy Outlook 2012
17Adam Sieminski July 20, 2012
14%Extended Policies
High TRR
Heavy-duty vehicle natural gas consumption grows substantially in an AEO2012 side case
18
heavy-duty vehicle fuel consumptionquadrillion Btu
Source: EIA, Annual Energy Outlook 2012 (heavy-duty natural gas vehicle case)
Motor Gasoline
ProjectionsHistory
Natural Gas
Diesel
2010
92%
8%
5%
64%
31%
Adam Sieminski July 20, 2012
AEO2012 scenarios show wide range of outcomes
19Adam Sieminski July 20, 2012
• Reference case
• High and low economic growth
• High and low oil price
• High and low estimated ultimate recovery cases and high technically recoverable resources
• Integrated high and low technology (demand, renewables, electric power, refining, nuclear)
• Policy related: Extended Policy, No Sunset, No Greenhouse Gas Concern, carbon dioxide allowance fee ($15 and $25), and 5-year investment recovery with reference and with low natural gas prices
• Proposed light-duty vehicle CAFE standards; advanced battery technology; heavy-duty truck natural gas potential
Independence does not eliminate interdependence
20Adam Sieminski July 20, 2012
“…quasi oil self-sufficiency will neither insulate the United States from the rest of the global oil market (and world oil prices), nor diminish the critical importance of the Middle East to its foreign policy.”
Source: Harvard Kennedy School, Oil: the Next Revolution, June 2012
For more information
Adam Sieminski July 20, 2012 21
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