2016 Deloitte Energy Conference: Energy outlook

2016 Energy Outlook

John England, Moderator Vice Chairman

US and Americas Oil & Gas Leader

Deloitte LLP

www.eia.gov U.S. Energy Information Administration Independent Statistics & Analysis

EIA Analysis and Projections

For

Deloitte Energy Conference

June 21, 2016 / Washington, DC

By

Adam Sieminski, Administrator

Short-Term Energy Outlook

Adam Sieminski | Deloitte Energy Conference

June 21, 2016

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


June 21, 2016

U.S. dry shale gas production billion cubic feet per day U.S. tight oil production million barrels of oil per day

Sources: EIA derived from state administrative data collected by DrillingInfo Inc. Data are through May 2016 and represent EIA’s official tight oil & shale gas estimates, but

are not survey data. State abbreviations indicate primary state(s). Note: Scales are presented at approximate barrel of oil equivalent.

Global supply has consistently exceeded demand since the start of 2014; EIA forecasts a return to market balance in the second half of 2017


June 21, 2016

Forecast

-3

-2

-1

0

1

2

3

4

5

6

82

84

86

88

90

92

94

96

98

100

2011-Q1 2012-Q1 2013-Q1 2014-Q1 2015-Q1 2016-Q1 2017-Q1

Implied stock change and balance (right axis)

World production (left axis)

World consumption (left axis)

world supply and demand million barrels per day implied stock change million barrels per day

Source: EIA, Short-Term Energy Outlook, June 2016

EIA expects WTI oil prices to remain low compared to recent history, but the market-implied confidence band is very wide


June 21, 2016

0

20

40

60

80

100

120

Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct

Historical Spot Price

STEO Forecast

NYMEX Futures Price

Current 95% NYMEX futures price confidence interval

2013 2014 2015 2016 2017

WTI price dollars per barrel


EIA expects Henry Hub natural gas prices to rise to early 2015 levels


June 21, 2016

0

1

2

3

4

5

6

7

Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct

Historical Spot Price

STEO Forecast

NYMEX Futures Price

Current 95% NYMEX futures price confidence interval

2013 2014 2015 2016 2017

Henry Hub price dollars per million Btu


Annual Energy Outlook


June 21, 2016

Reference case crude oil prices exceed $130 in 2040


June 21, 2016

Brent crude oil spot price, 2015 dollars per barrel

Source: EIA, Annual Energy Outlook 2016 Reference case

0

40

80

120

160

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

History Projections 2015

Natural gas prices are projected to remain below $5 per million British thermal units

through most of the projection period with or without the Clean Power Plan


June 21, 2016

average Henry Hub spot prices for natural gas, 2015 dollars per million Btu

Source: EIA, Annual Energy Outlook 2016

0

3

6

9

12

2005 2010 2015 2020 2025 2030 2035 2040

No CPP AEO2016 Reference



June 21, 2016

0

1

2

3

4

5

6

1990 2000 2010 2020 2030 2040 2020 2030 2040


2015 History

1993 2040

AEO2016 Reference No CPP

2015

1%

2040

33%

33%

13%

Nuclear

Natural gas

Coal

Renewables

15%

23%

26%

34%

1%

11%

13%

19%

53%

Petroleum and other liquids

4% 16%

27%

18%

38%

20%

1%

Clean Power Plan accelerates shift to lower-carbon options for generation, led by growth in

renewables and gas-fired generation; results are likely sensitive to CPP implementation approach

electricity net generation, trillion kilowatt hours

Electricity prices increase with rising fuel costs and expenditures for

electric transmission and distribution infrastructure


June 21, 2016

0

2

4

6

8

10

12

14

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Projections History 2015

Residential

Commercial

Industrial

AEO2016 Reference

No CPP

average retail electricity prices, 2015 cents per kilowatt hour


Technology improvements, largely driven by federal standards,

help to increase energy efficiency within the end-use sectors


June 21, 2016

• Buildings

– lighting

– space heating and cooling

– refrigeration

– water heating

– miscellaneous electric loads (MELs) and other end uses

• Industrial

– electric motors

– combined heat and power

• Transportation

– light-duty vehicles

– heavy-duty vehicles

International Energy Outlook


June 21, 2016

Renewables grow fastest, coal use plateaus, natural gas

surpasses coal by 2030, and oil maintains its leading share


June 21, 2016

0

50

100

150

200

250

1990 2000 2010 2020 2030 2040

Coal

Petroleum and other liquid fuels

Natural gas

Renewables

Nuclear

Coal with U.S. CPP

Renewables with

U.S. CPP

Share of

total energy

world energy consumption, quadrillion Btu

Source: EIA, International Energy Outlook 2016 and EIA, Analysis of the Impacts of the Clean Power Plan (May 2015)


33%

30%

28%

22%

23%

26%

12%

17%

4% 6%

22%

16%

As total energy consumption grows, shares by end-use

sector remain relatively unchanged


June 21, 2016

0

125

250

375

500

625

2012 2020 2025 2030 2035 2040

world delivered energy consumption by end-use sector quadrillion Btu

Source: EIA, International Energy Outlook 2016

Industrial

Buildings

Transportation

Share of total delivered energy

20% 21%

54%

53%

25%

26%

Many global issues increase uncertainty…


June 21, 2016

• Economic growth in key economies (China, Brazil, Russia, among others)

• Implementation and strength of climate policies

• Technology improvement rates (both supply and demand)

• Future of nuclear generating capacity

• Geopolitical events

Continuous improvement highlights at EIA


June 21, 2016

• Brent crude used as marker price and revived the International Energy Outlook

• U.S. Drilling Productivity Report

• U.S. crude export analysis

• Monthly solar PV capacity and generation

• U.S. movements of crude by rail

• Expanded natural gas production survey; added oil

• Data browsers, application programming interface, and Excel add-in

For more information


June 21, 2016

U.S. Energy Information Administration home page | www.eia.gov

Short-Term Energy Outlook | www.eia.gov/steo

Annual Energy Outlook | www.eia.gov/aeo

International Energy Outlook | www.eia.gov/ieo

Monthly Energy Review | www.eia.gov/mer

Today in Energy | www.eia.gov/todayinenergy

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

Excel Data Add-In | http://www.eia.gov/opendata/excel/

http://www.eia.gov/

http://www.eia.gov/steo

http://www.eia.gov/aeo

http://www.eia.gov/ieo

http://www.eia.gov/mer

http://www.eia.gov/todayinenergy

http://www.eia.gov/petroleum/drilling/

http://www.eia.gov/opendata/excel/

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2016 Deloitte Energy Conference: Energy outlook

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