Natural Gas Opportunities - PDF Free Download

Natural Gas Opportunities NAFTANEXT Summit Chicago, IL Erica Bowman, Chief Economist April 25, 2014

U.S. Natural Gas Reserves Source: Potential Gas Committee

Abundant Supply Estimates of U.S. Recoverable Natural Gas (trillion cubic feet) 4,000 Proved Reserves Non-shale Gas Resources Potential Shale Gas Resources Total Resource (Uncategorized) 3,600 3,545 3,350 3,105 3,000 2,688 2,543 2,836 2,000 2,074 2,170 1,981 2,335 2,203 2,100 2,102 1,532 1,414 1,268 1,312 1,235 1,619 1,000 0 00 02 04 06 08 10 12 08 09 10 11 12 13 10 10 11 11 09 12 13 Potential Gas Committee EIA CERA, MIT NPC, INGAA ICF

Reserves Volume and Cost 10 9 8 7 U.S. & Canada Supply Curve $/mmbtu 6 5 4 3 2 1 0 0 500 1000 1500 2000 2500 Dry Gas Resouce (TCF) Source: ICF, Assessment of NYC Natural Gas Market Fundamentals and Life Cycle Fuel Emissions, June 2012 4

Price Projections Affordable 2011$/MMBtu $14 $12 $10 Henry Hub Spot Natural Gas Price Historic Projected $8 $6 $4 $2 CERA 2012 WoodMac2012 AEO 2014 ER ICF 2013 $0 2000 2005 2010 2015 2020 2025 2030 2035 Source: EIA EIA Annual Annual Energy Outlook: Energy 2009, Outlook: 2010, 2011, 2009, 2012, 2010, 2013 2011, 2012, 2013 Henry Hub Hub Spot Spot prices prices (Actual prices: (Actual 2000 to prices: 2012) 2000 to 2012)

Natural Gas Production (TCF): Reference 40 35 30 AEO Projection Range: AEO 2009 - AEO 2014 ER 25 20 15 10 AEO 2013 AEO 2014 ER U.S. Production 2000 2005 2010 2015 2020 2025 2030 2035

Technology Advancement Source: Fayetteville Play, Southwestern Energy

Natural Gas Consumption 100 90 80 Historic U.S. Natural Gas Demand (billion cubic feet per day) Projected Pipeline Exports LNG Exports 70 60 50 Electric Power Transportation 40 30 Industrial 20 10 0 Commercial Residential Projected Data Source: EIA Annual Energy Outlook: 2014 ER Historic Data Source: EIA Natural Gas Monthly, February 2013 8

Demand Opportunity 110 EIA Annual Energy Outlook 100 BCF/D 90 80 70 60 2013 Low 2013 High 2013 Reference 2014 Reference ANGA Opportunity 50 40 2015 2020 2025 2030 2035 2040 Source: EIA AEO 2013, 2014 ER; ANGA analysis

Employment Impacts from Additional Natural Gas Consumption Domestic Jobs Impacts of Alternative Uses of Natural Gas per 1 additional BCF/d Production Gas to Liquids Plants Liquefied Natural Gas Plants Methanol Plants Ammonia Plants Upstream & Midstream Jobs 13,000 Construction Jobs Operations Jobs Total 4,000 900 18,000 1,700 200 15,000 3,000 1,800 18,000 4,200 3,400 21,000 Source: ICF, Tech Effect: How Innovation in Oil and Gas Exploration is Spurring the US Economy, October 2012 10

U.S. Industrial Project Announcements Legend

Natural Gas Liquids Since 2008, US NGL production has increased by 500,000 barrels/day. By 2020, NGL production is expected to reach 3.8 million barrels/day. This is an increase of 100% over current levels.

NGL and LPG Pipelines

Ethylene Production Low natural gas prices are creating an advantage for the U.S. and Canadian ethylene production. U.S. net exports of products created from ethylene are expected to rise significantly by 2025.

U.S. Fertilizer Production Operating rates in 2013 for US ammonia producers are estimated to have reach about 90% of capacity. Many new projects have been announced and will be starting up between 2016 and 2018.

U.S. Employment Contributions

Fundamental Shift in Outlook tcf 10 8 6 4 2 0-2 -4-6 -8 Forecast of Natural Gas Imports (trillion cubic feet) AEO 2005 AEO 2014 2010 2015 2020 2025 2030 2035 2040 LNG LNG Pipeline Pipeline Exports Imports Source: EIA Annual Energy Outlook 2005 & 2014

LNG Exports Astoria (Oregon LNG) DOE: Under Review FERC: Filed Capacity 1.2 Sabine Pass (Cheniere) DOE: Approved FERC: Approved Capacity: 2.2 BCF/d Coos Bay (Jordan Cove) DOE: Conditionally Approved FERC: Filed Capacity: 1.2 BCF/d Lake Charles (Truckline/Energy Transfer Partners, BG Group) DOE: Conditionally Approved FERC: Filed Capacity: 2 BCF/d Cameron (Sempra) DOE: Conditionally Approved FERC: Filed Capacity: 1.7 BCF/d Cove Point (Dominion) DOE: Conditionally Approved FERC: Filed Capacity:.8 BCF/d Elba Island (Southern LNG) DOE: Under Review FERC: Filed Capacity:.5 BCF/d Freeport LNG (FLEX Quintana Island) 2 Separate Filings DOE: Conditionally Approved FERC: Filed Capacity: 1.8 BCF/d Approved by DOE Waiting DOE Approval Lavaca Bay (Excelerate Liquefaction Solutions) DOE: Under Review FERC: Filed Capacity: 1.4 BCF/d

Infrastructure Requirements Through 2035 2014-2035 Average Annual Gas Well Completions (1000s) 307 14 Oil Well Completions (1000s) 914 42 Total Well Completions (1000s) 1,221 56 Miles of Transmission Mainline (1000s) 18.6 0.8 Miles of Laterals to/from Power Plants, Storage Fields and Processing Plants (1000s) 17.1 0.8 Miles of Gas Gathering Line (1000s) 303.1 13.8 Inch-Miles of Transmission Mainline (1000s) 568 26 Inch-Miles of Laterals to/from Power Plants, Storage Fields and Processing Plants (1000s) 279 13 Inch-Miles of Gathering Line (1000s) 1,095 50 Compression for Pipelines (1000 HP) 4,388 199 Compression for Gathering Line (1000 HP) 8,402 382 Gas Storage (Bcf Working Gas) 823 37 Processing Capacity (Bcfd) 34.2 1.6 LNG Export Facilities (Bcfd) 9.3 0.4 Source: INGAA Foundation Report (March 2014)