annual energy outlook - energy information administration · source: preliminary aeo2018 runs,...

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

Annual Energy OutlookPreliminary results for oil, natural gas, & liquid fuels

forOil and Gas Supply, Natural Gas Markets, & Liquid Fuels Markets Working GroupSeptember 21, 2017 | Washington, DC

byJohn Staub, Office Director for Petroleum, Natural Gas, and Biofuels Analysis

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSESDO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE

Source: Preliminary AEO2018 runs, dated as of 9/19/17

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DCSeptember 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

Brent crude oil prices are lower compared to AEO2017

Brent crude oil spot price$/barrel

2

History Projection

0

50

100

150

200

250

2010 2015 2020 2025 2030 2035 2040 2045

2018 reference case 2018 low price case 2018 high price case2017 reference case 2017 low price case 2017 high price case

Oil and Gas Supply

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DCSeptember 21, 2017 DO NOT QUOTE OR CITE as results are subject to change 3

0

50

100

150

200

250

300

350

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Edition of the Annual Energy Outlook

Unproved tight oil (including shale oil)Unproved other oil (including Alaska and offshore)Proved reserves (all types and locations)

Source: U.S. Energy Information Administration, Annual Energy Outlook 2018 and prior editionsNote: Resources are as of January 1 of two years prior to the “edition” year of the AEO (e.g. AEO2018 is 1/1/2016).

Multiple factors have contributed to crude oil resource estimate increases over the years, with tight oil contributing recently U.S. crude oil and lease condensate resourcesbillion barrels

4

107

151

35

293

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

0

2

4

6

8

10

12

14

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Preliminary AEO2018 RefAEO2017 Reference



U.S. crude oil production is higher than last year’s AEO

U.S. crude oil productionmillion barrels per day

5

History Projections

0

1

2

3

4

5

6

7

8

9

1995 2010 2020 2030 2040 2050

Preliminary AEO2018 Ref

AEO2017 Reference

0

1

2

3

4

1995 2010 2020 2030 2040 2050

Other Lower 48Lower 48 offshore AEO2017Lower 48 offshoreAlaska

U.S. tight oil production million barrels per day

U.S. crude oil production other than tight oil million barrels per day


Higher tight oil resources lead to higher total domestic crude oil production in AEO2018


0.0

0.4

0.8

1.2

1.6

2.0

2.4

2.8

3.2

3.6

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Sum of selected Permian

Wolfcamp*

Bakken

Other

Eagle Ford

Spraberry*

Avalon/Bone Springs*

Austin Chalk

Niobrara

Woodford

Monterey

*Permian BasinSource: Preliminary AEO2018 runs, dated as of 9/19/17


Bakken and Wolfcamp lead growth in tight oil production

Crude oil production by selected tight oil playsmillion barrels per day

7

History Projections

0

500

1,000

1,500

2,000

2,500

3,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Edition of the Annual Energy Outlook

Source: U.S. Energy Information Administration, Annual Energy Outlook 2018 and prior editionsNote: Resources are as of January 1 of two years prior to the “edition” year of the AEO (e.g. AEO2018 is 1/1/2016).

Technically recoverable natural gas resources reflect new information, a combination of assessments and EIA updatesU.S. dry gas resourcestrillion cubic feet

8

308

985

1,149

Unproved shale gas (including tight oil plays)Unproved other gas (including Alaska and offshore)Proved reserves (all types and locations)

2,442


0

5

10

15

20

25

30

35

40

45

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050



U.S. dry natural gas production is higher than last year’s AEO

U.S. dry natural gas production trillion cubic feet

9

History Projections


0

5

10

15

20

25

30

35

1995 2010 2020 2030 2040 2050


0

1

2

3

4

5

6

7

8

9

10

1995 2010 2020 2030 2040 2050

Tight GasOther Lower 48Lower 48 OffshoreCoalbed MethaneAlaska

U.S. dry shale gas production trillion cubic feet

U.S. dry natural gas production trillion cubic feet

Note: Shale gas includes natural gas production in tight oil plays.Source: Preliminary AEO2018 runs, dated as of 9/19/17

Shale gas leads growth in U.S. dry natural gas production in AEO2018


0

2

4

6

8

10

12

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Marcellus

Utica

Other

Haynesville/Bossier

Eagle Ford

Barnett

Fayetteville

Woodford

Bakken

Antrim

Note: Other includes natural gas production in tight oil plays.Source: Preliminary AEO2018 runs, dated as of 9/19/17

Marcellus and Utica lead production of U.S. shale gas

Dry natural gas production by selected shale playtrillion cubic feet

11

History Projections


0

1

2

3

4

5

6

2000 2005 2010 2015 2020 2025 2030 2035 2040




NGPL production is higher than last year’s AEO

Natural gas plant liquids productionmillion barrels per day

12

History Projections

Liquid fuels markets


0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2015 2020 2025 2030 2035 2040 2045 2050

2018 reference case



Crude oil exports rise through most of the projection period

U.S. crude oil exportsmillion barrels per day

14

Projections



The Brent-WTI price spread widens and then levels off in the projection period

Brent-WTI price spread$/barrel

15

Projection

0

1

2

3

4

5

2015 2020 2025 2030 2035 2040 2045 2050

2018 reference case

-6

-5

-4

-3

-2

-1

02015 2020 2025 2030 2035 2040 2045 2050

2018 reference case



Net imports of petroleum products are largely driven by trends in domestic petroleum product consumptionNet petroleum product importsmillions of barrels per day

16

Projection



After updating taxes, distribution costs, and international supply/demand curves, the spread between gasoline and diesel will be lower in AEO2018Diesel and Gasoline end-use prices$/gallon

17

Projection

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

2015 2020 2025 2030 2035 2040 2045 2050

2018 diesel2018 gasoline2017 diesel2017 gasoline

Note: Includes ethanol, biodiesel, and other advanced renewable production.Source: Preliminary AEO2018 runs, dated as of 9/19/17


Renewable liquids production is higher in AEO2018, resulting from updates to feedstock pricesDomestic renewable liquids productionmillions of barrels per day

18

Projection

0.75

0.85

0.95

1.05

1.15

1.25

2015 2020 2025 2030 2035 2040 2045 2050

2018 reference case 2017 reference case

Natural gas markets


0

2

4

6

8

10

12

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

AEO 2017

AEO 2018 (preliminary)

2016



Henry Hub spot prices are lower than AEO 2017, particularly in the mid-term through the early 2020s

U.S. dollars (2016) per million British thermal units

20

0

1,000

2,000

3,000

4,000

5,000

6,000

2000 2010 2020 2030 2040 2050

2016

New England

East North Central

South Atlantic

Eastern Canada 0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2000 2010 2020 2030 2040 2050

Mid-Atlantic

East South Central

East North Central

2016

Flows out of Mid-Atlantic billion cubic feet per year

Flows into South Atlanticbillion cubic feet per year


Regional flows, particularly out of the Northeast and into the South Atlantic, reflect the continuing reversal of historical trends

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change 21

0

1

2

3

4

5

2000 2010 2020 2030 2040 2050

AEO 2018 (Preliminary)AEO 2017

2016 • Preliminary results; data updates still needed

• Changes from AEO 2017 include:– Elba Island (GA, 0.35 Bcf/d) LNG

export capacity currently under construction

– Lower shipping costs (last updated 2009) to reflect changes in fleet

– Utilization of LNG export capacity solved in optimization model

Total U.S. LNG exportstrillion cubic feet per year


U.S. LNG exports are expected to increase, with capacity being built in Texas and Louisiana; capacity utilization will depend on regional supply prices

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change 22

-1

0

1

2

3

4

5

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050


2016

Imports

Exports

Net Imports



U.S. imports from Canada continue to decline while U.S. exports into eastern Canada rise due to increased pipeline capacity and production in the Marcellus and UticaU.S. natural gas trade with Canadatrillion cubic feet per year

23

0

2

4

6

8

10

12

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050


2016

Source: Preliminary AEO2018 runs, dated as of 9/2017


U.S. natural gas exports to Mexico continue their growth through the mid-2020s because of increasing demand in the electric power sector and decreasing natural gas production in MexicoU.S. natural gas trade with Mexicotrillion cubic feet per year billion cubic feet per day

24

Mexico Consumption

Mexico Supply

U.S. Exports to Mexico

Contacts for liquid fuels markets including biofuels

25Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DCSeptember 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

For questions about the Liquid Fuels Market Module contact:Elizabeth May: [email protected]

For questions about the International Energy Module contact:Adrian Geagla: [email protected]

For questions about Biofuels contact:Steve Hanson: [email protected]

Liquid Fuels Markets Team Lead: James Preciado: [email protected]

Biofuels and Emerging Technologies Team Lead: Mindi Farber-DeAnda: [email protected]

mailto:[email protected]





Contacts for oil and natural gas supply and natural gas markets

26Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DCSeptember 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

For questions about Oil & Gas Supply Model and Lower 48 onshore contact:Dana Van Wagener: [email protected]

For questions about Lower 48 offshore and Alaska contact:Terry Yen: [email protected]

Exploration and Production Team Lead:Meg Coleman: [email protected]

For questions about NGTDM, NGMM design, and comparisons between models:Joe Benneche: [email protected]

For questions pertaining to NGMM, design in AIMMS, suggestions for improvements to new model:Katie Dyl: [email protected]

Natural Gas Markets Team Lead:Peter Gross: [email protected]







We welcome feedback on our assumptions and documentation

• Working group meetings http://www.eia.gov/forecasts/aeo/workinggroup/

• The AEO Assumptions report http://www.eia.gov/forecasts/aeo/assumptions/

• NEMS Model Documentation– Oil and gas supply

https://www.eia.gov/outlooks/aeo/nems/documentation/ogsm/pdf/m063(2017).pdf

– Natural gas transmission and distribution http://www.eia.gov/forecasts/aeo/nems/documentation/ngtdm/pdf/m062(2014).pdf

– LFMM https://www.eia.gov/outlooks/aeo/nems/documentation/lfmm/pdf/m059(2014).pdf

• Working papers series http://www.eia.gov/workingpapers/

27Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

http://www.eia.gov/forecasts/aeo/workinggroup/

http://wwwdev.eia.gov/forecasts/aeo/assumptions/

https://www.eia.gov/outlooks/aeo/nems/documentation/ogsm/pdf/m063(2017).pdf

http://wwwdev.eia.gov/forecasts/aeo/nems/documentation/ngtdm/pdf/m062(2014).pdf

https://www.eia.gov/outlooks/aeo/nems/documentation/lfmm/pdf/m059(2014).pdf

http://wwwdev.eia.gov/workingpapers/

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For more information

28

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annual energy outlook - energy information administration · source: preliminary aeo2018 runs,...

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