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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
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Six key plays account for nearly all recent growth in oil and
natural gas production
Argus Americas Crude Summit
January 22, 20142
Source: EIA, Drilling Productivity e!ort
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ey insights on U.S. drilling productivity and production trends
Argus Americas Crude Summit
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
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"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*$
Argus Americas Crude Summit
January 22,
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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
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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
Argus Americas Crude Summit
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
Argus Americas Crude Summit
January 22,
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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
Source: EIA, Annual Energy +utloo 2014 Early elease
Argus Americas Crude Summit
January 22,
=luminum5lass
?ron and steel
8aper
+ood
efining and
related
(ul) chemicals
ther
etal based
billion cubic feet per da$
durables
manufacturing
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U.S. natural gas imports and exports
trillion cubic feet per $ear
=las)a 45 exports
8ipeline exports to exico
8ipeline exports to >anada
ower ;: states 45 exports
8ipeline imports from >anada
45 imports
Source: EIA, Annual Energy +utloo 2014 Early elease
%%
,"
,"0
,
0
"0
"
20
2
billion cubic feet per da$
.; 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
Argus Americas Crude Summit
January 22, 2014
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U.S. (ecomes a net exporter of natural gas in the near future
%2
U.S. dr$ natural gas
trillion cubic feet per $ear
Source: EIA, Annual Energy +utloo 2014 Early elease
Argus Americas Crude Summit
January 22,
8ro9ections#istor$ 20"2
>onsumption
Aomestic suppl$
4et exports
"00
7
0
2
0
,2
billion cubic feet per da$
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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$
Source: EIA, Annual Energy +utloo 2014 Early elease
Tight oil
=las)a
ther lower ;: onshore
ower ;: offshore
8ro9ections#istor$ 20"2
Argus Americas Crude Summit
January 22,
U.S. maximum production leel of
'.! million barrels per da$ in "'70
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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
Source: EIA, Annual Energy +utloo 2014 Early elease
Argus Americas Crude Summit
January 22,
8ro9ections#istor$ 20"2
'% 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
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U.S. petroleum product imports and exports
million barrels per da$
ther petroleum
product imports
Aistillate exports
otor gasoline exports
ther petroleumproduct exports
Aistillate imports
otor gasoline imports
Source: EIA, Annual Energy +utloo 2014 Early elease
Argus Americas Crude Summit
January 22,%'
U.S. maintains status as a net exporter of petroleum products
8ro9ections#istor$ 20"2
Total petroleum product
net exports
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U.S. dependence on imported li/uids declines, particularly in
the near term
%)
U.S. li/uid fuel suppl$
million barrels per da$
Source: EIA, Annual Energy +utloo 2014 Early elease
>onsumption
Aomestic suppl$
4et imports;0%
32%
8ro9ections#istor$20"2
200
!0%
Argus Americas Crude Summit
January 22,
2%
20"! 20;0
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"op ten countries with technically recovera(le shale resources
Shale oil
ran) countr$ 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,
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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$
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O4E1 countries now account for most unplanned outages
Argus Americas Crude Summit
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*>
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1hina is now the world5s largest net oil importer
Argus Americas Crude Summit
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,";
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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
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"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
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9or more information
Argus Americas Crude Summit2'
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