u.s. shale, oil and gas

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

Outlook for U.S. shale oil and gas

Argus Americas Crude Summit

January 22, 2014 | Houston, T

!y

Adam Siemins"i, #IA Administrator


2/25

Six key plays account for nearly all recent growth in oil and

natural gas production


January 22, 20142

Source: EIA, Drilling Productivity e!ort


3/25

ey insights on U.S. drilling productivity and production trends


January 22,!

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

and other tight resources

The number of wells drilled nationwide that produce both oil and natural gas increased

from 37% in 2007 to !% in 20"2

#igher drilling efficienc$ and new well productiit$& rather than an increase in the rig

count& hae been the main driers of recent production growth

Steep legac$ production decline rates are being offset b$ growing production from new

wells

Six shale pla$s account for nearl$ '0% of domestic oil production growth and irtuall$

all domestic natural gas production growth oer the last few $ears

The (a))en and *agle +ord pla$s account for about two,thirds of oil production growth-

the arcellus pla$ accounts for about three,/uarters of natural gas production growth


4/25

"he U.S. has experienced a rapid increase in natural gas and oil

production from shale and other tight resources

#

Sources: EIA derived "rom state administrative data collected #y DrillingIn"o Inc$ Data are t%roug% Decem#er 201& and

re!resent EIA's o""icial tig%t oil ( s%ale gas estimates, #ut are not survey data$ State a##reviations indicate !rimary state)s*$


January 22,


5/25

U.S. crude oil and natural gas production is up dramatically

since 2$%$ and will continue to grow rapidly& this has strategic

implications for the United States

efiner$ operations1inestment

ogistics infrastructure inestment

*xports of petroleum products

*xports of crude oil and natural gas 456

peration of the Strategic 8etroleum esere

'Argus Americas Crude Summit

January 22, 2014


6/25

U.S. natural gas prices remain well (elow crude oil prices

)

energ$ spot prices

20"2 dollars per million (tu

Source: EIA, Annual Energy +utloo 2014 Early elease

#istor$ 8ro9ections20"2

#enr$ #ub spot price


January 22,

(rent crude oil spot price

20": 20;0

atioommercial

esidential

Transportation@@

"".2

;."

".7

"".0

3.!

'."

;.2

0.7

:.

2.'

-Includes com#ined %eat.and.!o/er and lease and !lant "uel

--Includes !i!eline "uel

U.S. natural gas consumption growth is driven (y electric

power, industrial, and transportation use


January 22,


9/25

U.S. manufacturing output and natural gas use grows with low

natural gas prices, particularly in the near term

-

manufacturing natural gas consumption

/uadrillion (tu



January 22,

=luminum5lass

?ron and steel

8aper

+ood

efining and

related

(ul) chemicals

ther

etal based

billion cubic feet per da$

durables

manufacturing


10/25


11/25

U.S. natural gas imports and exports

trillion cubic feet per $ear

=las)a 45 exports

8ipeline exports to exico

8ipeline exports to >anada

ower ;: states 45 exports

8ipeline imports from >anada

45 imports


%%

,"

,"0

,

0

"0

"

20

2


.; tcf of exports

";.: bcf1da$6

2.0 tcf of imports.; bcf1da$6

U.S. natural gas gross exports exceed ' tcf in 2$2'

8ro9ections#istor$ 20"2202


January 22, 2014


12/25

U.S. (ecomes a net exporter of natural gas in the near future

%2

U.S. dr$ natural gas

trillion cubic feet per $ear



January 22,


>onsumption

Aomestic suppl$

4et exports

"00

7

0

2

0

,2



13/25

rowing tight oil and offshore crude oil production drive U.S.

output close to historical high

%!

U.S. crude oil production

million barrels per da$


Tight oil

=las)a

ther lower ;: onshore

ower ;: offshore



January 22,

U.S. maximum production leel of

'.! million barrels per da$ in "'70


14/25

U.S. transportation sector motor gasoline demand declines, while

diesel fuel accounts for a growing portion of the market

%#

transportation energ$ consumption b$ fuel

/uadrillion (tu



January 22,


'% otor gasoline

Bet fuel

>45145

"2% "3%3%

;;%

3"%

3% ;%ther@

Aiesel22%

2030

;7%

"3%

3%

30%

"%

20;0

*thanol;%

%%

-Includes aviation gasoline, !ro!ane, residual "uel oil, lu#ricants,

electricity, and liuid %ydrogen


15/25

U.S. petroleum product imports and exports


ther petroleum

product imports

Aistillate exports

otor gasoline exports

ther petroleumproduct exports

Aistillate imports

otor gasoline imports



January 22,%'

U.S. maintains status as a net exporter of petroleum products


Total petroleum product

net exports


16/25

U.S. dependence on imported li/uids declines, particularly in

the near term

%)

U.S. li/uid fuel suppl$



>onsumption

Aomestic suppl$

4et imports;0%

32%

8ro9ections#istor$20"2

200

!0%


January 22,

2%

20"! 20;0


17/25


18/25

"op ten countries with technically recovera(le shale resources

Shale oil

ran) countr$ billion barrels

" ussia 7

2 United States :

3 >hina 32

; =rgentina 27

ib$a 2!

! CeneDuela "3

7 exico "3

: 8a)istan '

' >anada '

"0 ?ndonesia :

World total 345

Shale gas

ran) countr$ trillion cubic feet" >hina "&""

2 =rgentina :02

3 =lgeria 707

; United States !!

>anada 73

! exico ;

7 =ustralia ;37

: South =frica 3'0

' ussia 2:

"0 (raDil 2;

World total 7,299

ote: AI estimates $S$ s%ale oil resources at 43 #illion #arrels and $S$ s%ale gas resources at 1,11 trillion cu#ic "eet$

Source: nited States: EIA and S5S6 +t%er #asins: AI$

%+Argus Americas Crude Summit

January 22,


19/25

3eproduci(ility of shale development may have limits

an$ factors support production from U.S. shale resources that donot exist in man$ other countrieshinaFs success in shale deelopment and its future 45 imports and coal

use6 are inersel$ related

ussiaFs share of *uropeFs gas mar)et could be reduced b$ increased

*uropean shale production

#igh olumes of shale oil production& with other driers& could significantl$

diminish the mar)et share and pricing power of 8*> producers

Shorter lead times for the GmanufacturingF model of production from shale

resources ma$ reduce price olatilit$ oer an extended period6 compared

to the historical Gexploration1deelopmentF model for conentional resources

Argus Americas Crude SummitJanuary 22, 2014 2$


21/25

O4E1 countries now account for most unplanned outages


January 22,2%

estimated unplanned crude oil production outages

thousand barrels per da$

Source: EIA, S%ort.7erm Energy +utloo, January 2014

4on,

8*>

8*>


22/25

1hina is now the world5s largest net oil importer


January 22,22

net imports for >hina and the United States

millions of barrels per da$

ote: et oil im!orts are de"ined as total liuid "uels consum!tion less domestic !roduction$

Source: EIA, S%ort.7erm Energy +utloo, January 2014

+orecast#istor$

>hina net imports

United States net imports

Ban,";


23/25

U.S. li/uids 6petroleum7 production proected to outpace (oth

Saudi Ara(ia and 3ussia in 2$%#

Liquids (petroleum) production, 204(million !arrels per da")

United States Saudi =rabia ussia

>rude oil :. "0.0 "0.3

45s 2. ".: 0.:

(iofuels H ".0 0 0

efiner$ gain "." 0." 0."

Total mmbl1d6 "3." "".' "".2

Source: EIA, S%ort.7erm Energy +utloo6 International Energy +utloo

2!Argus Americas Crude Summit

January 22, 2014


24/25

"here are many issues that cause uncertainty8

Unresoled long,term effects of economic issues in the United States&

*urope& and >hina& and their impacts on demand

Social unrest in the iddle *ast and 4orth =frica& and the potential for

unrest elsewhere& and its impacts on suppl$

The timing of BapanFs full recoer$ from the impacts of the 20""nuclear disaster at +u)ushima

5lobal shale gas and shale oil production potential and 8*> mar)et

share decisions

>hanging policies and regulations

>hanging consumer preferences and technological brea)throughs

2#Argus Americas Crude Summit

January 22, 2014


25/25

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Argus Americas Crude Summit2'

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