the u.s. oil and natural gas production outlook

www.eia.govU.S. Energy Information Administration Independent Statistics & Analysis

The U.S. Oil and Natural Gas Production Outlook

for

PRG Energy Outlook Conference

September 22, 2014

by

Adam Sieminski, Administrator

U.S. energy use grows slowly over the projection reflecting steady growth in GDP offset by improving energy efficiency

2

U.S. primary energy consumption

quadrillion Btu

Source: EIA, Annual Energy Outlook 2014 Early Release

history projections2012

37%

18%

27%

8%

8%

1%

nuclear

oil and other liquids

natural gas

coal

renewables (excluding liquid

biofuels)

34%

19%

28%

8%

9%

2%liquid biofuels

Shares of total U.S. energy

PRG Energy Conference September 22, 2014

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

3

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


Onshore natural gas production continues to grow, outpacing declines in offshore and causing net imports to shrink

Source: Short-Term Energy Outlook, September 2014

4PRG Energy Conference September 22, 2014

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


projectionshistory

2012

consumption

domestic supply

net exports

100

75

50

25

0

-25

billion cubic feet per day

Source: EIA, Annual Energy Outlook 2014 Reference case and High Oil and Gas Resource case


Projected U.S. natural gas trade depends on assumptions regarding resources and future technology advances Reference casetrillion cubic feet per year

exports to Mexico

exports to Canada

lower 48LNG exports

imports from Canada

LNG imports

High Oil and Gas Resource casetrillion cubic feet per year

billion cubic feet per day

0

5

20

15

10

-5

-10

Source: EIA, Annual Energy Outlook 2014 Reference case and High Oil and Gas Resource case


Coal generation is reduced in a high gas availability case, but it does not gain much in a low gas availability case U.S. electricity net generation, Reference case

trillion kilowatthours

Natural gas

Renewables

Nuclear

Coal

2012

30%

12%

19%

37%

Natural gas

Renewables

Nuclear

Coal

2012

34%

15%

17%

33%

Petroleum and other Petroleum and other

30%

15%

17%

37%

projectionshistory projectionshistory

U.S. electricity net generation, High Resource case

trillion kilowatthours

Production of crude oil and liquids is projected to grow by over 1.2 million barrels per day in both 2014 and 2015

Source: Short-Term Energy Outlook, September 2014


Resource and technology assumptions have major implications for projected U.S. crude oil production beyond the next few years

9

Source: EIA, Annual Energy Outlook 2014 Reference case and High Oil and Gas Resource case; Short Term Energy Outlook, September 2014

Alaska

tight oil

other lower 48 states onshore

lower 48 states offshore

STEO September 2014 U.S. crude oil projection

2012

projectionshistory projectionshistory

2012

Alaska

tight oil

other lower 48 states onshore

Reference casemillion barrels per day

High Oil and Gas Resource casemillion barrels per day

lower 48 states offshore


U.S. oil production growth helping to offset unplanned outages

10

estimated unplanned crude oil production outages

million barrels per day

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

*monthly production delta versus Jan. 2011 production level

Non-OPEC

OPEC


U.S. Production growth*

Growing U.S. oil production and rising demand in China have together made China the world’s largest net oil importer

PRG Energy Conference September 22, 2014 11

net imports for China and the United States


Note: Net oil imports are defined as total liquid fuels consumption less domestic production

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

projectionshistory

Jul-14

Tight oil production will spread to nations outside of the United States and Canada over the projectiontight oil production, Reference case


Source: EIA, International Energy Outlook 2014


2.9 MMbbl/d in 2013

3.9 MMbbl/d in 2014 (STEO)

AEO2014 High Resource case

5.0 MMbbl/d in 2015 (STEO)

EIA Reference scenario shows world tight oil production increasing to almost 8 million b/d in 2025tight oil production


Source: EIA, Annual Energy Outlook 2014 and International Energy Outlook 2014


projectionshistory 2012

U.S. (AEO2014 & IEO2014 Reference case)

World (IEO2014 Reference case)

U.S. petroleum product net exports


Source: EIA, Annual Energy Outlook 2014 Reference case and Short Term Energy Outlook


U.S. is already a major net exporter of petroleum products

2015(e)

Most of the growth in production between 2011 and 2015 consists of sweet grades with API gravity of 40 or aboveU.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/


forecasthistory

mixed hydrocarbon wells(gas, condensate, oil)

dry gas

(exportable withorder/authorization)

crude oil / lease condensate (exportable under limited conditions)

wet gas

EIA Refinery Survey

plant condensate

splittercomplex

distillation

stabilizer finished product streams

processed products for domestic use or exportable without license

finished petroleum products and other processed hydrocarbon liquids

separation via temperature gradients

water

separation via pressure changesfield / lease separator

flash drum heater treater

Distillation processes and resulting products


other processed gas liquids

fractionator separator

gas processing plant

processedcondensate

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

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

the u.s. oil and natural gas production outlook

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