Annual Energy Outlook 217 Valve Manufacturers Association of America VMA Technical Seminar 217 March 2, 217 Nashville, TN By, Director, Office of Integrated and International Energy Analysis U.S. Energy Information Administration Independent Statistics & Analysis www.eia.gov
EIA mission: independent statistics and analysis EIA was created by the U.S. Congress in 1977 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 EIA is the Nation's premier source of energy information and, by law, its data, analyses, and forecasts are independent of approval by any other officer or employee of the U.S. Government EIA does not propose or advocate any policy positions VMA Technical Seminar 217, Nashville, TN
The U.S. has experienced a rapid increase in natural gas and oil production from shale and other tight resources U.S. tight oil production million barrels of oil per day 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 (PA,WV,OH & NY) Woodford (OK) Granite Wash (OK & TX) Austin Chalk (LA & TX) Monterey (CA) 8 7 6 5 4 3 2 1 Marcellus (PA,WV,OH & NY) Utica (OH, PA & WV) Haynesville (LA & TX) Eagle Ford (TX) Fayetteville (AR) Barnett (TX) Woodford (OK) Bakken (ND) Antrim (MI, IN, & OH) Rest of US 'shale' U.S. dry shale gas production billion cubic feet per day 48 42 36 3 24 18 12 6 22 24 26 28 21 212 214 216 22 24 26 28 21 212 214 216 VMA Technical Seminar 217, Nashville, TN
Estimated U.S. shale gas production was 43.1 Bcf/d in October 216 about 61% of total U.S. dry production (7.9 Bcf/d) Natural gas production (dry) billion cubic feet per day 7 6 5 4 3 2 1 Rest of US gas production Marcellus (PA, WV, OH & NY) Utica (OH, PA & WV) Haynesville (LA & TX) Eagle Ford (TX) Fayetteville (AR) Barnett (TX) Woodford (OK) Bakken (ND & MT) Antrim (MI, IN, & OH) Other US 'shale' Shale gas % of total 22 24 26 28 21 212 214 216 Sources: EIA Natural Gas Monthly, STEO through October 216 and DrillingInfo. VMA Technical Seminar 217, Nashville, TN Shale gas production as a percent of total gas production 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% %
U.S. dry natural gas production is the result of continued development of shale gas and tight oil plays, alternative assumptions cause significant differences U.S. natural gas production by type trillion cubic feet 6 216 5 4 3 2 shale gas and tight oil plays Dry natural gas production trillion cubic feet 6 216 High Oil Price High Oil and 5 Gas Resource and Technology 4 Reference case Low Oil Price Low Oil and Gas 3 Resource and Technology 2 1 tight gas other Lower 48 onshore other Lower 48 offshore 2 21 22 23 24 1 2 21 22 23 24 Source: EIA, Annual Energy Outlook 217 VMA Technical Seminar 217, Nashville, TN
Reference case oil prices and production rise from current levels, price paths and production levels in the side cases are very different from those in the Reference case North Sea Brent oil price 216 dollars per barrel Crude oil production million barrels per day 25 2 15 1 5 216 2 21 22 23 24 18 16 14 12 1 8 6 4 2 216 2 21 22 23 24 High Oil and Gas Resource and Technology High Oil Price Reference case Low Oil Price Low Oil and Gas Resource and Technology Source: EIA, Annual Energy Outlook 217 VMA Technical Seminar 217, Nashville, TN
Increasing demand from industrial and electric power markets drive rising domestic consumption of natural gas in the Reference case Natural gas consumption by sector trillion cubic feet 216 4 35 billion cubic feet per day 1 3 25 2 15 8 6 4 electric power industrial 1 5 21 216 22 23 24 2 transportation commercial residential Source: EIA, Annual Energy Outlook 217 VMA Technical Seminar 217, Nashville, TN
Increased natural gas trade is dominated by liquefied natural gas exports in the Reference case Natural gas trade trillion cubic feet 8 6 liquefied natural gas (LNG) exports 216 billion cubic feet per day 22 16 6 4 2 pipeline exports to Canada Mexico 1 5 2-2 -5-2 -4 pipeline imports from Canada -1-6 LNG imports -16-6 198 199 2 21 22 23 24 VMA Technical Seminar 217, Nashville, TN
U.S. LNG export levels vary across cases and reflect both the level of global demand, as well as by the difference between domestic and global natural gas prices Liquefied natural gas exports trillion cubic feet 1 8 6 4 2 216 billion cubic feet per day 25 2 15 1 5 2 21 22 23 24 2 21 22 23 24 Reference High and Low Oil and Gas High and Low Resource and Technology Oil Price Source: EIA, Annual Energy Outlook 217 VMA Technical Seminar 217, Nashville, TN Oil-to-natural gas price ratio energy-equivalent terms 8 7 6 5 4 3 2 1 216
Future domestic natural gas prices depend on both domestic resource availability and world energy prices Henry Hub natural gas price 216 dollars per million Btu 12 1 8 6 4 2 216 Low Oil and Gas Resource and Technology High Oil Price Reference case Low Oil Price High Oil and Gas Resource and Technology 2 21 22 23 24 Source: EIA, Annual Energy Outlook 217 VMA Technical Seminar 217, Nashville, TN
Electricity use continues to increase, but the rate of growth remains lower than historic averages in the Reference case Electricity use by sector billion kilowatthours 1,8 1,6 1,4 1,2 1, 8 6 4 2 direct use electricity sales residential I commercial I Industrial I transportation -2 Source: EIA, Annual Energy Outlook 217 VMA Technical Seminar 217, Nashville, TN Electricity use growth rate percent growth (three-year rolling average) 216 6 5 4 3 2 1 198 2 22 24-1
Fuel prices and current laws and regulations drive growing shares of renewables and natural gas in the electricity generation mix as coal s share declines over time in the Reference case U.S. net electricity generation from select fuels billion kilowatthours Reference 216 2,5 216 No Clean Power Plan projections 2, 1,5 coal natural gas 1, 5 nuclear renewable energy petroleum 198 199 2 21 22 23 24 22 23 24 Source: EIA, Annual Energy Outlook 217 VMA Technical Seminar 217, Nashville, TN 12
Natural gas resource availability affects prices and plays a critical role in determining the mix of coal, natural gas, and renewable generation U.S. net electricity generation from select fuels billion kilowatthours Reference 2,5 216 2, 1,5 coal natural gas Low Oil and Gas Resource and Technology High Oil and Gas Resource and Technology No Clean Power Plan 1, 5 renewable energy 198 199 2 21 22 23 24 Source: EIA, Annual Energy Outlook 217 215 225 235 215 225 235 22 23 24 VMA Technical Seminar 217, Nashville, TN
Lower capital costs and the availability of tax credits boost near-term wind additions and sustain solar additions; whereas coal-fired unit retirements in the Reference case are driven by low natural gas prices and the Clean Power Plan Annual electricity generating capacity additions and retirements (Reference case) gigawatts 4 3 216 additions 2 1-1 -2 retirements solar wind oil and gas nuclear other coal -3 25 21 215 22 225 23 235 24 Source: EIA, Annual Energy Outlook 217 VMA Technical Seminar 217, Nashville, TN
Assumptions about license renewals in AEO217 increase nuclear retirements, leading to net nuclear capacity decreases Nuclear electricity generating capacity gigawatts 216 12 1 8 6 4 2 Reference 21 22 23 24 Source: EIA, Annual Energy Outlook 217 Year-over-year nuclear capacity changes gigawatts 3 2 1 assumed uprates new reactors Reference additions -1 actual/announced -2 retirements projected -3 retirements retirements -4 215 22 225 23 235 24 VMA Technical Seminar 217, Nashville, TN 15
Industrial energy consumption grows in all cases, but is higher in the High Oil Price case and the High Economic Growth cases over most of the projection Industrial energy consumption quadrillion British thermal units 36 34 32 3 28 26 24 22 2 // 216 18 198 199 2 21 22 23 24 Source: EIA, Annual Energy Outlook 217 VMA Technical Seminar 217, Nashville, TN High Oil Price High Economic Growth High Oil and Gas Resource and Technology Reference Low Oil and Gas Resource and Technology Low Economic Growth Low Oil Price
Industrial sector energy consumption growth in the Reference case is led by increases in petroleum and natural gas consumption Industrial energy consumption quadrillion British thermal units Industrial energy consumption quadrillion British thermal units 35 3 25 2 15 1 216 hydrocarbon gas liquids petroleum natural gas 5 renewables electricity coal 198 2 22 24 216 21 22 23 24 nonmanufacturing other non-energy intensive metal durables refining bulk chemical feedstock bulk chemical heat & power food iron & steel paper other energy intensive Source: EIA, Annual Energy Outlook 217 VMA Technical Seminar 217, Nashville, TN
The United States becomes a net energy exporter in most cases as petroleum liquid imports fall and natural gas exports rise Net energy trade quadrillion British thermal units 4 3 2 1-1 -2 net imports net exports 216-3 198 199 2 21 22 23 24 Source: EIA, Annual Energy Outlook 217 VMA Technical Seminar 217, Nashville, TN Low Oil Price Low Oil and Gas Resource and Technology High Economic Growth Reference case Low Economic Growth High Oil Price High Oil and Gas Resource and Technology
The United States becomes a net energy exporter in the Reference case projections as natural gas exports increase and petroleum imports decrease Energy trade (Reference case) quadrillion British thermal units 4 35 216 Net energy trade (Reference case) quadrillion British thermal units 216 3 25 3 exports 25 2 imports 15 1 5 198 199 2 21 22 23 24 2 15 1 5 net imports petroleum and other liquids electricity coal and -5 net exports coke natural gas -1 198 199 2 21 22 23 24 Source: EIA, Annual Energy Outlook 217 VMA Technical Seminar 217, Nashville, TN
For more information 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 VMA Technical Seminar 217, Nashville, TN