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

North American Oil and Natural Gas Supply and Demand

ForNorth Dakota Petroleum CouncilSeptember 24, 2014 | Dickinson, ND

ByAdam Sieminski, EIA Administrator

0

20

40

60

80

100

120

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

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

2

U.S. primary energy consumptionquadrillion 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

North Dakota Petroleum Council September 24, 2014

China’s use of liquid fuels exceeds the United States by 2035

0

5

10

15

20

25

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

liquid fuels consumption in China and the United States, Reference casemillion barrels per day

Source: EIA, International Energy Outlook 2014

North Dakota Petroleum Council September 24, 2014 3

projectionshistory 2010

United States

China

Challenges in understanding U.S. transportation fuel use

4

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

vehicle miles traveled (VMT) and income indices

Source: U.S. Department of Transportation, U.S. Bureau of Labor Statistics, U.S. Bureau of Economic Analysis

VMT per capita

personal disposable income per capita

mean household income

1995 = 1.0

North Dakota Petroleum Council September 24, 2014

-2%

0%

2%

4%

6%

8%

10%

12%

14%

1950 1960 1970 1980 1990 2000 2010

Changing pattern of U.S. electricity usepercent growth (3-year compounded annual growth rate)

Source: EIA, Annual Energy Outlook 2014

5

electricity use

GDP

• Structural change in economy• Higher prices• Standards• Improved efficiency

North Dakota Petroleum Council September 24, 2014

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

6

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5Eagle 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)HaynesvilleUtica (OH, PA & WV)MarcellusWoodford (OK)Granite Wash (OK & TX)Austin Chalk (LA & TX)Monterey (CA)

U.S. tight oil productionmillion 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)

Utica (OH, PA & WV)

Rest of US 'shale'

U.S. dry shale gas productionbillion cubic feet per day

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).

North Dakota Petroleum Council September 24, 2014

0

2

4

6

8

10

12

14

1960 1970 1980 1990 2000 2010 2020

High Oil and Gas Resourcecase

U.S. crude oil production approaches 13 million b/d by 2025 in the High Oil and Gas Resource case

North Dakota Petroleum Council September 24, 2014 7

U.S. crude oil production in three casesmillion barrels per day

2012history projections

Referencecase

U.S. historic maximum production level: 9.6 million barrels/day (1970)

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

STEO September 2014 U.S. crude oil projection

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1

2

3

4

5

6

7

8

9

Jan-

10M

ar-1

0M

ay-1

0Ju

l-10

Sep

-10

Nov

-10

Jan-

11M

ar-1

1M

ay-1

1Ju

l-11

Sep

-11

Nov

-11

Jan-

12M

ar-1

2M

ay-1

2Ju

l-12

Sep

-12

Nov

-12

Jan-

13M

ar-1

3M

ay-1

3Ju

l-13

Sep

-13

Nov

-13

Jan-

14M

ar-1

4M

ay-1

4

crude oil production by state, January 2010 to June 2014million barrels per day

all other states

Texas

North Dakota

25%

49%

8

Source: U.S. Energy Information Administration

North Dakota Petroleum Council September 24, 2014

Texas and North Dakota now account for nearly half of all oil production in the United States

U.S. rail carloads of crude oil and petroleum products exceed 1.5 million b/d in 2014

North Dakota Petroleum Council September 24, 2014 9

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2006 2007 2008 2009 2010 2011 2012 2013 2014

number of rail carloads per week

Source: U.S. Energy Information Administration, based on Association of American Railroads

million barrels per day

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

10

estimated unplanned crude oil production outagesmillion barrels per day

Source: EIA, Short-Term Energy Outlook, July 2014*monthly production delta versus Jan. 2011 production level

Non-OPEC

OPEC

North Dakota Petroleum Council September 24, 2014

U.S. Production growth*

U.S. petroleum product net exportsmillion 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

North Dakota Petroleum Council September 24, 2014 11

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

2015(e)

U.S. exports of petroleum products to Mexico and Canada have more than doubled and tripled, respectively, since 2004

North Dakota Petroleum Council September 24, 2014 12

0

100

200

300

400

500

600

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Canada

Mexico

U.S. petroleum products exportsthousand barrels per day

Source: EIA, Petroleum Supply Monthly

Jan-Feb

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-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, 1965-2013million metric tons oil equivalent

net oil imports

net gas imports

Source: BP Statistical Review of World Energy 2014

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

0

1

2

3

4

5

6

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 typemillion barrels of oil per day

Source: EIA, DrillingInfo, Colorado DNR, Texas RRC. http://www.eia.gov/analysis/petroleum/crudetypes/

North Dakota Petroleum Council September 24, 2014 14

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

splitter complex 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

North Dakota Petroleum Council September 24, 2014 15

other processed gas liquids

fractionator separatorgas processing plant

processedcondensate

U.S. shale gas leads growth in total gas production through 2040, when production exceeds 100 billion cubic feet per day

16

U.S. dry natural gas productiontrillion cubic feet

Source: EIA, Annual Energy Outlook 2014 Reference case

0

10

20

30

40

50

60

70

80

90

100

0

5

10

15

20

25

30

35

40

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Associated with oilCoalbed methane

Tight gas

Shale gas

AlaskaNon-associated offshore

Non-associated onshore

projectionshistory 2012

North Dakota Petroleum Council September 24, 2014

billion cubic feet per day

U.S. natural gas prices are expected to remain well below crude oil prices

17

0

5

10

15

20

25

30

1990 1995 2000 2005 2010 2015 2020 2025

energy spot prices2012 dollars per million Btu

Source: EIA, Annual Energy Outlook 2014 Reference case

history projections2012

Henry Hub natural gas spot price

North Dakota Petroleum Council September 24, 2014

Brent crude oil spot price

oil to gas price ratio:

7.1

ratio:3.6

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

Source: Short-Term Energy Outlook, September 2014

18North Dakota Petroleum Council September 24, 2014

-2-1012345678

2012 2013 2014 2015-20-10

01020304050607080

U.S. Natural Gas Production and Importsbillion cubic feet per day (Bcf/d)

Federal Gulf of Mexico production (right axis)U.S. non-Gulf of Mexico production (right axis)U.S. net imports (right axis)Total marketed production (left axis)

annual change (Bcf/d)

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

19

U.S. dry natural gastrillion cubic feet per year

Source: EIA, Annual Energy Outlook 2014 Reference case

North Dakota Petroleum Council September 24, 2014

-10

0

10

20

30

40

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

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

20North Dakota Petroleum Council September 24, 2014

-4

-2

0

2

4

6

8

2010 2015 2020 2025-4

-2

0

2

4

6

8

2010 2015 2020 2025

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

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10

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-10

0%

10%

20%

30%

40%

50%

60%

0

200

400

600

800

1000

1200

Jan-

05M

ay-0

5S

ep-0

5Ja

n-06

May

-06

Sep

-06

Jan-

07M

ay-0

7S

ep-0

7Ja

n-08

May

-08

Sep

-08

Jan-

09M

ay-0

9S

ep-0

9Ja

n-10

May

-10

Sep

-10

Jan-

11M

ay-1

1S

ep-1

1Ja

n-12

May

-12

Sep

-12

Jan-

13M

ay-1

3S

ep-1

3

21

Source: North Dakota Industrial Commission, Department of Mineral Resources, Oil and Gas Division

North Dakota Petroleum Council September 24, 2014

North Dakota natural gas productionthousand cubic feet per day

Though flaring is trending down somewhat, a large share of natural gas production does not go to market

marketed gas production

non-marketed gas production

percentage flared

share of flared natural gas

For more information

North Dakota Petroleum Council September 24, 2014 22

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/