2016 Deloitte Energy Conference: Energy outlook
Transcript of 2016 Deloitte Energy Conference: Energy outlook
2016 Energy Outlook
John England, Moderator Vice Chairman
US and Americas Oil & Gas Leader
Deloitte LLP
www.eia.gov U.S. Energy Information Administration Independent Statistics & Analysis
EIA Analysis and Projections
For
Deloitte Energy Conference
June 21, 2016 / Washington, DC
By
Adam Sieminski, Administrator
Short-Term Energy Outlook
Adam Sieminski | Deloitte Energy Conference
June 21, 2016
The U.S. has experienced a rapid increase in natural gas and oil production from shale and other tight resources
Adam Sieminski | Deloitte Energy Conference
June 21, 2016
U.S. dry shale gas production billion cubic feet per day U.S. tight oil production million barrels of oil per day
Sources: EIA derived from state administrative data collected by DrillingInfo Inc. Data are through May 2016 and represent EIA’s official tight oil & shale gas estimates, but
are not survey data. State abbreviations indicate primary state(s). Note: Scales are presented at approximate barrel of oil equivalent.
Global supply has consistently exceeded demand since the start of 2014; EIA forecasts a return to market balance in the second half of 2017
Adam Sieminski | Deloitte Energy Conference
June 21, 2016
Forecast
-3
-2
-1
0
1
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82
84
86
88
90
92
94
96
98
100
2011-Q1 2012-Q1 2013-Q1 2014-Q1 2015-Q1 2016-Q1 2017-Q1
Implied stock change and balance (right axis)
World production (left axis)
World consumption (left axis)
world supply and demand million barrels per day implied stock change million barrels per day
Source: EIA, Short-Term Energy Outlook, June 2016
EIA expects WTI oil prices to remain low compared to recent history, but the market-implied confidence band is very wide
Adam Sieminski | Deloitte Energy Conference
June 21, 2016
0
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40
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80
100
120
Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct
Historical Spot Price
STEO Forecast
NYMEX Futures Price
Current 95% NYMEX futures price confidence interval
2013 2014 2015 2016 2017
WTI price dollars per barrel
Source: EIA, Short-Term Energy Outlook, June 2016
EIA expects Henry Hub natural gas prices to rise to early 2015 levels
Adam Sieminski | Deloitte Energy Conference
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Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct
Historical Spot Price
STEO Forecast
NYMEX Futures Price
Current 95% NYMEX futures price confidence interval
2013 2014 2015 2016 2017
Henry Hub price dollars per million Btu
Source: EIA, Short-Term Energy Outlook, June 2016
Annual Energy Outlook
Adam Sieminski | Deloitte Energy Conference
June 21, 2016
Reference case crude oil prices exceed $130 in 2040
Adam Sieminski | Deloitte Energy Conference
June 21, 2016
Brent crude oil spot price, 2015 dollars per barrel
Source: EIA, Annual Energy Outlook 2016 Reference case
0
40
80
120
160
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
History Projections 2015
Natural gas prices are projected to remain below $5 per million British thermal units
through most of the projection period with or without the Clean Power Plan
Adam Sieminski | Deloitte Energy Conference
June 21, 2016
average Henry Hub spot prices for natural gas, 2015 dollars per million Btu
Source: EIA, Annual Energy Outlook 2016
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2005 2010 2015 2020 2025 2030 2035 2040
No CPP AEO2016 Reference
History Projections 2015
Adam Sieminski | Deloitte Energy Conference
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1990 2000 2010 2020 2030 2040 2020 2030 2040
Source: EIA, Annual Energy Outlook 2016
2015 History
1993 2040
AEO2016 Reference No CPP
2015
1%
2040
33%
33%
13%
Nuclear
Natural gas
Coal
Renewables
15%
23%
26%
34%
1%
11%
13%
19%
53%
Petroleum and other liquids
4% 16%
27%
18%
38%
20%
1%
Clean Power Plan accelerates shift to lower-carbon options for generation, led by growth in
renewables and gas-fired generation; results are likely sensitive to CPP implementation approach
electricity net generation, trillion kilowatt hours
Electricity prices increase with rising fuel costs and expenditures for
electric transmission and distribution infrastructure
Adam Sieminski | Deloitte Energy Conference
June 21, 2016
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1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
Projections History 2015
Residential
Commercial
Industrial
AEO2016 Reference
No CPP
average retail electricity prices, 2015 cents per kilowatt hour
Source: EIA, Annual Energy Outlook 2016
Technology improvements, largely driven by federal standards,
help to increase energy efficiency within the end-use sectors
Adam Sieminski | Deloitte Energy Conference
June 21, 2016
• Buildings
– lighting
– space heating and cooling
– refrigeration
– water heating
– miscellaneous electric loads (MELs) and other end uses
• Industrial
– electric motors
– combined heat and power
• Transportation
– light-duty vehicles
– heavy-duty vehicles
International Energy Outlook
Adam Sieminski | Deloitte Energy Conference
June 21, 2016
Renewables grow fastest, coal use plateaus, natural gas
surpasses coal by 2030, and oil maintains its leading share
Adam Sieminski | Deloitte Energy Conference
June 21, 2016
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50
100
150
200
250
1990 2000 2010 2020 2030 2040
Coal
Petroleum and other liquid fuels
Natural gas
Renewables
Nuclear
Coal with U.S. CPP
Renewables with
U.S. CPP
Share of
total energy
world energy consumption, quadrillion Btu
Source: EIA, International Energy Outlook 2016 and EIA, Analysis of the Impacts of the Clean Power Plan (May 2015)
History Projections 2012
33%
30%
28%
22%
23%
26%
12%
17%
4% 6%
22%
16%
As total energy consumption grows, shares by end-use
sector remain relatively unchanged
Adam Sieminski | Deloitte Energy Conference
June 21, 2016
0
125
250
375
500
625
2012 2020 2025 2030 2035 2040
world delivered energy consumption by end-use sector quadrillion Btu
Source: EIA, International Energy Outlook 2016
Industrial
Buildings
Transportation
Share of total delivered energy
20% 21%
54%
53%
25%
26%
Many global issues increase uncertainty…
Adam Sieminski | Deloitte Energy Conference
June 21, 2016
• Economic growth in key economies (China, Brazil, Russia, among others)
• Implementation and strength of climate policies
• Technology improvement rates (both supply and demand)
• Future of nuclear generating capacity
• Geopolitical events
Continuous improvement highlights at EIA
Adam Sieminski | Deloitte Energy Conference
June 21, 2016
• Brent crude used as marker price and revived the International Energy Outlook
• U.S. Drilling Productivity Report
• U.S. crude export analysis
• Monthly solar PV capacity and generation
• U.S. movements of crude by rail
• Expanded natural gas production survey; added oil
• Data browsers, application programming interface, and Excel add-in
For more information
Adam Sieminski | Deloitte Energy Conference
June 21, 2016
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
Drilling Productivity Report | http://www.eia.gov/petroleum/drilling/
Excel Data Add-In | http://www.eia.gov/opendata/excel/