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www.eia.gov U.S. Energy Information Administration Independent Statistics & Analysis
Energy outlook
For Government of Canada July 21, 2014 | Ottawa, Ontario, Canada 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)Delaware (TX & NM Permian)Yeso-Glorieta (TX & NM Permian)Niobrara-Codell (CO, WY)HaynesvilleMarcellusWoodford (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
35
40Marcellus (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 June 2014 and represent EIA’s official tight oil & shale gas estimates, but are not survey data. State abbreviations indicate primary state(s).
Government of Canada July 21, 2014
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Jan-2012 Jul-2012 Jan-2013 Jul-2013 Jan-2014 Jul-2014
Other Non-OPEC
Syria
Sudan / S. Sudan
Iraq
Nigeria
Libya
Iran
U.S. oil production growth helping to offset unplanned outages
3
estimated unplanned crude oil production outages million barrels per day
Source: EIA, Short-Term Energy Outlook, July 2014 *Monthly production delta versus Jan. 2011 production level
Non- OPEC
OPEC
Government of Canada July 21, 2014
U.S. Production growth*
0
5
10
15
20
25
30
0.0
10.0
20.0
30.0
40.0
50.0
60.0
U.S. is the largest producer of petroleum and natural gas in the world
Government of Canada July 21, 2014 4
estimated U.S., Russia, and Saudi Arabia petroleum and natural gas production quadrillion Btu million barrels per day of oil equivalent
United States
Russia
Saudi Arabia
petro-leum
natural gas
2008 2009 2010 2011 2012 2013 2014e 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)
U.S. becomes a net exporter of natural gas in the near future
5
U.S. dry natural gas trillion cubic feet per year
Source: EIA, Annual Energy Outlook 2014 Reference case
Government of Canada July 21, 2014
-10
0
10
20
30
40
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
Projections History 2012
Consumption
Domestic supply
Net exports
100
75
50
25
0
-25
billion cubic feet per day
0
2
4
6
8
10
12
14
16
1960 1970 1980 1990 2000 2010 2020 2030 2040
High Oil and Gas Resource
U.S. crude oil production exceeds 13 million b/d in High Oil and Gas Resource case
Government of Canada July 21, 2014 6
U.S. crude oil production in three cases million barrels per day
2012 History Projections
Reference
Low Oil and Gas Resource
U.S. maximum production level: 9.6 million barrels/day (1970)
Source: EIA, Annual Energy Outlook 2014 Reference case, High Oil and Gas Resource case, and Low Oil and Gas Resource case
Consequences of increased domestic oil production
• Additional production of light oil over the past several years has for the most part been absorbed by reducing imports of similar grades oils
• Other responses include: – Increased crude oil exports (244,000 b/d in first quarter 2014)
– Increased average API gravity of crude inputs to domestic refining
– Increased refinery runs – and product exports
• Future options include: – Continued shifts in the refinery input mix
– Added splitters to convert light crude into a mix of heavier fractions to feed domestic refineries and light products valued in other markets
– Continued increases in crude oil exports
7 Government of Canada July 21, 2014
Imports of light crude fell from 1.7 million b/d in 2011 to 0.6 million b/d during first two months of 2014 U.S. crude oil imports million barrels of oil per day
Government of Canada July 21, 2014 8
• Of the total 1.5 million b/d decline in crude oil imports between 2011 and 2013, nearly 50% was light crude (API gravity 35+)
• API 40+ imports fell from 0.6 million b/d in 2011 to 0.2 million b/d in 2013, and averaged only 0.1 million b/d during the first two months of 2014
0
2
4
6
8
10
2010 2011 2012 2013 2014*
Light (≥ 35 API) Heavy (< 35 API)
Note: 2014 data is January and February only. Source: U.S. Energy Information Administration, Petroleum Supply Monthly
Government of Canada July 21, 2014 9
U.S. crude exports rise to highest level in 15 years
Source: U.S. Energy Information Administration, Petroleum Supply Monthly Note: 2014 regional data are through March. PADD denotes Petroleum Administration for Defense District
Roughly 96% of the growth in production between 2011 and 2013 consisted of sweet grades with API gravity of 40 or above
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3
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7
8
9
10
2011 2012 2013 2014 2015
API 50+API 40-50API 35-40API 27-35API below 27
U.S. crude oil production by type million barrels of oil per day
Source: EIA, DrillingInfo, Colorado DNR, Texas RRC. http://www.eia.gov/analysis/petroleum/crudetypes/
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forecast
U.S. petroleum product net exports million barrels per day
-3
-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
Government of Canada July 21, 2014 11
U.S. is now a major net exporter of petroleum products
2015
Rail car loadings of crude oil and petroleum products in the U.S. and Canada have significantly increased since 2010
12 Government of Canada July 21, 2014
Note: Data are weekly average originations for each month, are not seasonally adjusted and reflect revisions to the original reporting Source: AAR
U.S. and Canadian crude oil and petroleum products average weekly carloads
0
4000
8000
12000
16000
U.S.
Canada
Existing crude-by-rail infrastructure in the United States
13 Government of Canada July 21, 2014
Source: U.S. Energy Information Administration Note: Data as of March 2014. PADD denotes Petroleum Administration for Defense District.
Bakken rail outflow capacity totaled 965,000 barrels per day (b/d) at the end of 2013, compared to 515,000 b/d of pipeline capacity. Eagle Ford rail outflow is over 200,000 b/d.
Government of Canada July 21, 2014 14
-100
0
100
200
300
400
500
600
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
North American net imports of oil and natural gas
North American net imports, 1965-2013 million metric tons
net oil imports
net gas imports
Source: BP Statistical Review of World Energy 2014
Shale oil and gas in a world energy context
Government of Canada July 21, 2014 15
EIA / ARI assessed shale oil and shale gas resources 2013
Government of Canada July 21, 2014 16
Source: United States basins from EIA and United States Geological Survey, other basins from ARI based on data from various published studies
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.
17 Government of Canada July 21, 2014
Geopolitical implications of shale resources • Shale oil is both light and sweet — the rapid growth in its supply has
implications for crude oil pricing relationships, the value of different refinery configurations, refinery output slates, and the correspondence between SPR holdings and U.S. crude imports
• China’s success in shale development and its future LNG imports (and coal use) are inversely related
• Russia’s share of Europe’s gas market could be reduced by increased European shale production
• High volumes of shale oil production, with other drivers, could significantly diminish the market share and pricing power of key OPEC producers
• Shorter lead times for the ‘manufacturing’ model of production from shale resources may reduce price volatility (over an extended period) compared to the historical ‘exploration/development’ model for conventional resources
Government of Canada July 21, 2014 18
Natural gas infrastructure in the northeastern U.S. and eastern Canada
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Source: EIA and Ventyx
Liquefied natural gas marine terminals in the Northeast
20
Source: EIA; Canada-Nova Scotia Offshore Petroleum Board; Ventyx; company websites
Government of Canada July 21, 2014
Everett Year in service: 1971 Storage capacity: 3.5 Bcf Sendout capacity: 0.9 Bcf/d 2013 average total sendout: 0.2 Bcf/d
Canaport Year in service: 2009 Storage capacity: 10.5 Bcf Sendout capacity: 1.2 Bcf/d 2013 average total sendout: 0.1 Bcf/d
21
Source: Ventyx, and Canada-Nova Scotia Offshore Petroleum Board
Government of Canada July 21, 2014
LNG imports are decreasing at Canaport and Everett terminals million cubic feet per day
LNG export projects in eastern Canada
22
Source: Company websites
Government of Canada July 21, 2014
Goldboro LNG Terminal H-Energy LNG Terminal
Planned year in service 2019 2020 Liquefaction capacity 1.3 Bcf/d 0.6 Bcf/d Storage capacity 14.6 Bcf N/A Contract 20 year supply deal with E. On AG N/A
Supply sources Marcellus, eastern Canada N/A
NEB approval Under review N/A
Maine
World energy markets
Government of Canada July 21, 2014 23
Renewable energy and nuclear power are the fastest growing sources 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
24 Government of Canada July 21, 2014
Source: EIA, International Energy Outlook 2013
By 2040, China’s energy use will be double the U.S. level; India’s a little more than half despite its faster GDP growth energy consumption by selected country quadrillion Btu
Source: EIA, International Energy Outlook 2013
0
50
100
150
200
250
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
China
United States
India
History Projections 2010
107
55
220
25 Government of Canada July 21, 2014
Non-OECD Europe/Eurasia, Middle East, and the United States account for the largest increases in natural gas production
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5
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16
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0 5 10 15 20
Other OECD
Canada
Australia/New Zealand
Non-OECD Central and South America
Africa
Non-OECD Asia
United States
Middle East
Non-OECD Europe/Eurasia
Change in natural gas production, 2010-2040 trillion cubic feet
Government of Canada July 21, 2014
Source: EIA, International Energy Outlook 2013
Non-OPEC oil supply growth is concentrated in five countries
27 Government of Canada July 21, 2014
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
Source: EIA, International Energy Outlook 2013
OPEC market share grows after 2025
28
Source: EIA, International Energy Outlook 2013
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
Non-petroleum
Government of Canada July 21, 2014
world liquids production million barrels per day
History Projections 2010
62
49
5
50
35
2
European energy overview
29 Government of Canada July 21, 2014
Europe production (including Norway)
52%
Directly from Russia
9%
via Ukraine 16%
via Belarus 6%
LNG 9%
Algeria 5%
Libya 1% Other
2%
Imports from Russia
31%
Sources: U.S. Energy Information Administration estimates based on Eastern Bloc Research, Cedigaz, Gas LNG Europe, Lloyd's List Marine Intelligence, Argus FSU
Europe production
26%
Russia (via
pipeline) 9%
Russia (seaborne)
19% Middle East 15%
West Africa 13%
North Africa 10%
Caspian 4%
Americas 4%
European crude oil supply mix, 2013
European natural gas supply mix, 2013
Context for U.S. CO2 emissions
Government of Canada July 21, 2014 30
U.S. production grows rapidly, particularly natural gas, renewables, and liquids in the near term
31
0
20
40
60
80
100
120
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
U.S. energy production quadrillion Btu
Source: EIA, Annual Energy Outlook 2014 Early Release
History Projections 2012
26%
21%
31%
11%
10%
22%
38%
20%
12%
8% Nuclear
Crude oil and natural gas plant liquids
Natural gas
Coal
Renewables
2025
23%
24%
34%
11%
8%
2040
Government of Canada July 21, 2014
Role of natural gas and renewable electricity in the U.S. generation mix
Government of Canada July 21, 2014 32
Net generation by fuel source in the AEO2014 Reference case billion kilowatthours
Source: EIA, Annual Energy Outlook
0
1,000
2,000
3,000
4,000
5,000
6,000
2012 2040
12%
16%
37%
30%
19%
32%
35%
16%
non-hydro renewables hydropower petroleum and other nuclear natural gas coal
U.S. energy-related CO2 emissions remain below the 2005 level throughout the projection period
33
carbon dioxide emissions billion metric tons
Source: EIA, Annual Energy Outlook 2014 Early Release
0
1
2
3
4
5
6
7
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
Projections History 2012 2005
Government of Canada July 21, 2014
Energy-related carbon dioxide emissions are 9% below the 2005 level in 2020 and 7% below the
2005 level in 2040.
EPA 111(d) proposed rule
Government of Canada July 21, 2014 34
• The proposed rule issued by EPA on June 2 establishes state-level targets to reduce CO2 emissions from existing generating plants that burn fossil fuels to produce electricity. The targets for each state, applied over 2020-2030, reflect four “building blocks”:
– heat rate improvement at existing coal units
– increased dispatch of existing natural gas plants
– expanded use of renewable resources
– load reduction through energy efficiency programs
• These building blocks comprise EPA’s proposed ‘Best System of Emission Reductions’ (BSER) under the Clean Air Act Section 111(d), but the states have broad flexibility in their specific compliance measures, including the option to engage in regional compliance partnerships
Another possible option for carbon reduction involves combining advanced technology assumptions with a $10 CO2 fee, which reduces emissions synergistically
Government of Canada July 21, 2014 35
3000
3500
4000
4500
5000
5500
6000
2010 2015 2020 2025 2030 2035 2040
613 969
2028
million tonnes Energy-related CO2 emissions
Reference
Adv. Tech. case
$10 Fee case
Adv. Tech. and $10 Fee
Combining advanced technology with a CO2 fee induces more coal retirements and more new, low-carbon power sources
Government of Canada July 21, 2014 36
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
Reference Reference Adv. Tech. Fee $10 Fee $10 +Adv. Tech.
Reference Adv. Tech. Fee $10 Fee $10 +Adv. Tech.
Reference Adv. Tech. Fee $10 Fee $10 +Adv. Tech.
2012 2020 2030 2040
Generation by source
other
renewables
nuclear
natural gas
petroleum
coal
billion kWh
For more information
Government of Canada July 21, 2014 37
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/
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