Regional energy challenges in New England and Eastern Canada For 39 th Annual Conference of New England Governors and Eastern Canadian Premiers () August 31, 2015 St. John s By Adam Sieminski Energy Information Administration U.S. Energy Information Administration Independent Statistics & Analysis www.eia.gov
Mandate: EIA collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment Independence: EIA, an element of the Department of Energy, is one of 14 federal statistical agencies; by law, its data, analyses, and forecasts are independent of approval by any other officer or employee of the United States Government Mission: EIA provides data and analysis to help stakeholders understand the rapidly changing energy landscape across all fuels and all sectors August 31, 2015 2
EIA information is used by a range of stakeholders EIA Customers Media 2% Examples of Activities Government Executive Agencies WH, DOE, & EPA use EIA data to track energy markets and program performance and to analyze policy proposals Congress policy development and agency funding State Governments planning and program development Business/ Industry 22% Energy Sector 21% Finance/ Consulting 18% Government 9% Education 12% Private Citizen 16% Energy Sector Consumers monitor price forecasts Producers track inventory statistics Business/Industry Manufacturers market research Finance/Consulting Commodities Analysts market response to supply data Media/Education Journalists cite energy statistics Teachers use Energy Kids materials Researchers energy forecasting and modeling Source: 2014 EIA Web Customer Survey Private Citizens Public research gasoline prices August 31, 2015 3
Regional energy trade North American Energy Forum November 19, 2014 4
North American border crossing points for oil, natural gas, and electricity Source: U.S. Energy Information Administration August 31, 2015 5
North American border crossing points for oil, natural gas, and electricity Source: U.S. Energy Information Administration August 31, 2015 6
Natural Gas August 31, 2015 7
Source: U.S. Energy Information Administration, based on data from various published studies August 31, 2015 8
The U.S. has experienced a rapid increase in natural gas and oil production from shale and other tight resources Eagle 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) Haynesville Utica (OH, PA & WV) Marcellus Woodford (OK) Granite Wash (OK & TX) Austin Chalk (LA & TX) Monterey (CA) U.S. tight oil production million barrels of oil per day 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Marcellus (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 production billion cubic feet per day 45 40 35 30 25 20 15 10 5 0 Sources: EIA derived from state administrative data collected by DrillingInfo Inc. Data are through July 2015 and represent EIA s official tight oil & shale gas estimates, but are not survey data. State abbreviations indicate primary state(s). August 31, 2015 9
Rising production in Marcellus and Utica has turned the Northeastern U.S. into a net exporter of natural gas Source: Bentek Energy August 31, 2015 10
Natural gas prices track closer to Henry Hub except for points in Northeast (NYC and Boston) when constrained, otherwise lower Source: Bloomberg August 31, 2015 11
Recent and planned pipeline reversals reflect high levels of natural gas production in the Northeast Sources: Federal Energy Regulatory Commission (FERC), trade press, company websites, SNL Financial, and BENTEK Energy LLC (Bentek) August 31, 2015 12
Proposed natural gas pipelines in New England Sources: Federal Energy Regulatory Commission (FERC), trade press, company websites, SNL Financial, and BENTEK Energy LLC (Bentek) August 31, 2015 13
Natural gas imports and exports by border points Source: Department of Energy, Office of Fossil Energy, Natural Gas Imports and Exports First Quarterly Report 2015 August 31, 2015 14
Flows of natural gas at Niagara, 2008-2015 Flows from Canada to the United States at Niagara, New York Source: LCIEI; daily throughputs at Niagara August 31, 2015 15
U.S. becomes a net exporter of natural gas in the near future U.S. dry natural gas trillion cubic feet per year billion cubic feet per day History 2013 Projections 40 100 30 20 Consumption Domestic supply 75 50 10 Net exports 25 0 0-10 -25 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 Source: EIA, Annual Energy Outlook 2015 August 31, 2015 16
Projected U.S. natural gas trade reflects the spread between domestic natural gas prices and world energy prices, along with resource outcomes U.S. natural gas imports and exports trillion cubic feet History 2013 16 12 2013 Projections 2013 billion cubic feet per day Lower 48 states LNG exports 40 30 8 4 Alaska LNG exports Pipeline exports to Mexico 20 10 0 0-4 Pipeline exports to Canada Pipeline imports from Canada High Oil and Gas LNG imports Reference Low Oil Price Resource -20-8 2000 2010 2020 2030 2040 2020 2030 2040 2020 2030 2040 Source: EIA, Annual Energy Outlook 2015-10 August 31, 2015 17
Canadian Liquefied Natural Gas (LNG) Projects LNG Project Name Location Import (Bcf) Export (Bcf) AC LNG Pieridae Energy (Canada) Ltd. Bear Head LNG Byer s Cove, Nova Scotia Goldboro, Nova Scotia Point Tupper, Nova Scotia 2.64 2.38 1.15 1.61 1.58 1.88 Saint John LNG Development Company Ltd. Saint John, New Brunswick 0.85 0.78 Source: Canada s National Energy Board, July 2015 August 31, 2015 18
For oil prices, the market-implied confidence band is very wide WTI price dollars per barrel 150 125 100 75 50 25 0 Historical Spot Price STEO Forecast NYMEX Futures Price Current 95% NYMEX futures price confidence interval June 2014 95% NYMEX futures price confidence interval Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct 2013 2014 2015 2016 Source: EIA, Short-Term Energy Outlook, July 2015 August 31, 2015 19
Electricity August 31, 2015 20
U.S. electricity trade with Canada terawatthours exports imports exports imports Sources: U..S. Energy Information Administration, based on data from EIA and the National Energy Board of Canada August 31, 2015 21
New England s electricity generation by fuel in the Reference case, 2000-2040 electricity net generation billion kilowatthours History 160 140 120 2013 Projections 100 80 60 40 20% 16% 30% 45% 16% 20 17% 32% Nuclear 21% Coal 16% 5% 2% 0 1% 2000 2005 2010 2% 2015 2020 2025 2030 2035 2040 Petroleum and other liquids Source: EIA, Annual Energy Outlook 2015 Natural gas Renewables August 31, 2015 22 57% 18%
New England s renewable electricity generation by fuel type in the Reference case, 2000-2040 electricity net generation billion kilowatthours History 40 2013 Projections 30 20 10 Wind Solar Biomass MSW/LFG Conventional hydroelectric power 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 Source: EIA, Annual Energy Outlook 2015 August 31, 2015 23
EPA s Clean Power Plan August 31, 2015 24
Final EPA Clean Power Plan Rule Sets Carbon Pollution Standards for new, modified and reconstructed power plants. Rule offers flexibility in implementation Interim and final source-specific CO 2 intensity standards. Goals are measured: 1. Rate-based: pounds per megawatt hour (lb/mwh) 2. Mass-based state goal in total short tons of CO2 Best System of Emissions Reductions (BSER) Building Blocks: 1. Improving the heat rate of existing coal plants 2. Substitute natural gas for coal 3. Substitute zero emitting renewable sources for existing coal Overview of the Clean Power Plan Power Plan: http://www2.epa.gov/cleanpowerplan/fact-sheet-overview-clean-powerplan August 31, 2015 25
Final EPA Clean Power Plan Rule (cont.) Interstate and international trading of renewable energy generation (including Canadian hydro must be incremental and installed after 2012, including Evaluation, Measurement and Verification (EM&V) standards. Faces a number of legal tests: on August 13 th fifteen states filed extraordinary emergency petition with D.C. Circuit Court; petitioners seek to block the implementation of the rule prior to the Court s ruling on its legality. Key Topics and Issues: http://www.epa.gov/airquality/cpp/cpp-key-topics.pdf August 31, 2015 26
For more information U.S. Energy Information Administration home page www.eia.gov Data Crude Oil Imports www.eia.gov/petroleum/imports/data Drilling Productivity Report ww.eia.gov/petroleum/drilling/ International Energy Portal www.eia.gov/international Monthly Energy Review www.eia.gov/mer State Energy Portal www.eia.gov/state Analysis Annual Energy Outlook www.eia.gov/aeo International Energy Outlook www.eia.gov/ieo Short-Term Energy Outlook www.eia.gov/steo Today in Energy www.eia.gov/todayinenergy August 31, 2015 27
Supplemental Slides August 31, 2015 28
Northeast Power Coordinating Council New York (NYC-Westchester, Long Island, Upstate New York) August 31, 2015 29
New York s electricity generation by fuel in the Reference case, 2000-2040 electricity net generation billion kilowatthours History 175 2013 Projections 150 125 100 31% 20% 42% Natural gas 40% 75 50 22% 22% Renewables 25% 25 17% 32% Nuclear 27% 10% 3% Coal 7% 0 1% 2000 2005 2010 1% 2015 2020 2025 2030 2035 2040 Petroleum and other liquids Source: EIA, Annual Energy Outlook 2015 August 31, 2015 30
New York s renewable electricity generation by fuel type in the Reference case, 2000-2040 electricity net generation billion kilowatthours History 40 2013 Projections Wind 30 Solar Biomass MSW/LFG 20 10 Conventional hydroelectric power 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 Source: EIA, Annual Energy Outlook 2015 August 31, 2015 31
Northeast Power Coordinating Council New England + New York August 31, 2015 32
New England and New York s electricity generation by fuel in the Reference case, 2000-2040 electricity net generation billion kilowatthours History 350 2013 Projections 300 250 200 26% 43% Natural gas 49% 150 100 18% 26% 19% Renewables 22% 50 17% 32% Nuclear 24% 13% 4% Coal 4% 0 2000 2005 2010 2% 2015 2020 2025 2030 2035 2040 Petroleum and other liquids 1% Source: EIA, Annual Energy Outlook 2015 August 31, 2015 33
New England and New York s renewable electricity generation by fuel type in the Reference case, 2000-2040 electricity net generation billion kilowatthours History 70 2013 Projections 60 50 40 Wind Solar Biomass MSW/LFG 30 20 Conventional hydroelectric power 10 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 Source: EIA, Annual Energy Outlook 2015 August 31, 2015 34
Natural gas consumption growth is driven by increased use in all sectors except residential U.S. dry gas consumption trillion cubic feet History 35 Residential Commercial 30 billion cubic feet per day Projections Transportation** Electric power Industrial* 90 80 25 20 8.9 10.9 70 60 50 15 10 5 0 8.2 0.9 3.3 4.9 2005 2013 2020 2025 2030 2035 2040 Source: EIA, Annual Energy Outlook 2015 Reference case 9.4 1.6 3.6 4.2 40 30 20 10 *Includes combined heat-and-power and lease and plant fuel **Includes pipeline fuel 0 August 31, 2015 35