Status and outlook for shale gas and tight oil development ...U.S. Energy Information Administration...

www.eia.gov U.S. Energy Information Administration Independent Statistics & Analysis

Status and outlook for shale gas and tight oil development in the U.S.

for The Energy Council March 09, 2013 | Washington, DC by Adam Sieminski, Administrator

EIA’s mission and main functions

Adam Sieminski, Energy Council March 09, 2013 2

Independent Statistical and Analytical agency within the U.S. Department of Energy

– 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.

– By law, its data, analyses, and forecasts are independent of approval by any other officer or employee of the U.S. Government

[EIA] …is the gold standard for energy data around the world, and the accessibility of it is so much greater than other places – Dan Yergin, Platts Inside Energy

U.S. Shale Gas

3 Adam Sieminski, Energy Council March 09, 2013

An average well in shale gas and other continuous resource plays can also have steep decline curves, which require continued drilling to grow production

4

0

500

1,000

1,500

2,000

0 5 10 15 20

Haynesville

Eagle Ford

Woodford

Marcellus

Fayetteville

million cubic feet per year

Source: EIA, Annual Energy Outlook 2012

1

0%

50%

100%

0 5 10 15 20

Cumulative production = EUR

Adam Sieminski, Energy Council March 09, 2013

For example: Oil production by monthly vintage of wells in the Williston Basin

5

Source: DrillingInfo history through August 2012, EIA Short-Term Energy Outlook, February 2013 forecast


Domestic production of shale gas has grown dramatically over the past few years

6

shale gas production (dry) billion cubic feet per day

0

5

10

15

20

25

30

2000 2002 2004 2006 2008 2010 2012

Rest of US

Bakken (ND)

Eagle Ford (TX)

Marcellus (PA and WV)

Haynesville (LA and TX)

Woodford (OK)

Fayetteville (AR)

Barnett (TX)

Antrim (MI, IN, and OH)

Sources: LCI Energy Insight gross withdrawal estimates as of January 2013 and converted to dry production estimates with EIA-calculated average gross-to-dry shrinkage factors by state and/or shale play.


Shale gas leads growth in total gas production through 2040

7

U.S. dry natural gas production trillion cubic feet

Source: EIA, Annual Energy Outlook 2013 Early Release

0

5

10

15

20

25

30

35

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Associated with oil Coalbed methane

Tight gas

Shale gas

Alaska

Non-associated onshore

Non-associated offshore

Projections History 2011


8

0

5

10

15

20

25

30

35

2005 2011 2020 2025 2030 2035 2040

U.S. dry gas consumption trillion cubic feet


Projections History

Industrial*

Electric power

Commercial

Residential

Transportation**

33%

14%

6%

32%

12%

33%

19%

3%

31%

13%

*Includes combined heat-and-power and lease and plant fuel. **Includes pipeline fuel.

Gas to liquids 2%

Natural gas consumption is quite dispersed, with electric power, industrial, and transportation use driving future demand growth


0.0

0.5

1.0

1.5

2.0

2.5

3.0

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Growth of natural gas in transportation led by heavy duty trucks (LNG) and gas to liquids (diesel)… marine and rail to come?

9

U.S. natural gas consumption quadrillion Btu

Pipeline fuel

Light-duty vehicles

2011 History Projections

95%

3%

1%

1%

28%

38%

3%

31%

1% Buses

Freight trucks

Gas to liquids

Note: Gas to liquids includes heat, power, and losses. Source: EIA, Annual Energy Outlook 2013 Early Release


Total natural gas exports nearly quadruple by 2040 in the AEO2013 Reference case

10

U.S. natural gas exports trillion cubic feet


0

1

2

3

4

5

6

2010 2015 2020 2025 2030 2035 2040

Alaska LNG exports

Exports to Mexico

Exports to Canada

Lower 48 LNG exports


Domestic natural gas production grows faster than consumption and the U.S. becomes a net exporter of natural gas around 2020

11

-5

0

5

10

15

20

25

30

35

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

U.S. dry gas trillion cubic feet



Consumption

Domestic supply

Net imports


U.S. Tight Oil

12 Adam Sieminski, Energy Council March 09, 2013

Domestic production of tight oil has grown dramatically over the past few years

13

tight oil production for select plays million barrels per day

Source: Drilling Info (formerly HPDI), Texas RRC, North Dakota department of mineral resources, and EIA, through October 2012.


0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2000 2002 2004 2006 2008 2010 2012

Eagle Ford

Bakken

Granite Wash

Bonespring

Monterey

Woodford

Niobrara-Codell

Spraberry

Austin Chalk

U.S. tight oil production leads a growth in domestic production of 2.6 million barrels per day between 2008 and 2019

14

U.S. crude oil production million barrels per day

Source: EIA, Annual Energy Outlook 2013 Early Release and Short-Term Energy Outlook, February 2013

0

2

4

6

8

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040


Alaska

Tight oil

Other lower 48 onshore

Lower 48 offshore

STEO Feb. 2013 U.S. crude oil projection


U.S. petroleum product exports exceeded imports in 2011 for first time in over six decades

15

annual U.S. net exports of total petroleum products, 1949 – 2011 million barrels per day

Source: EIA, Petroleum Supply Monthly

-4

-3

-2

-1

0

1

2

3

4

1949 1955 1961 1967 1973 1979 1985 1991 1997 2003 2009

imports

exports

net exports

net product exporter


U.S. dependence on imported liquids depends on both supply and demand

16

U.S. liquid fuel supply million barrels per day


0

5

10

15

20

25

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Consumption

Domestic supply

Net imports 45%

37%


60%

2005


Light-duty vehicle liquids consumption is lower primarily due to more stringent CAFE standards


0

2

4

6

8

10

2010 2015 2020 2025 2030 2035 2040

light-duty vehicle liquids consumption million barrels per day


AEO2012

AEO2013

Global tight oil production comparisons

18

Source: Preliminary International Energy Outlook 2013, BP Energy Outlook 2030

0

2

4

6

8

10

12

2000 2010 2020 2030

Australia China Russia Argentina Mexico Canada United States

million barrels per day

BP Energy Outlook 2030 IEO2013 DRAFT


EIA Data & the Importance of Cooperation with the States


Groundwater Protection Council (GWPC)


• The Ground Water Protection Council (GWPC) consists of state ground water regulatory agencies (spun out of the IOGCC)

• The purpose is to promote and ensure the use of best management practices and fair but effective laws regarding comprehensive ground water protection

• FracFocus Website – FracFocus is the national hydraulic fracturing chemical registry and is managed by the GWPC and Interstate Oil and Gas Compact Commission (IOGCC)

Risked Based Data Management System (RBDMS)


• More than 22 regulatory agencies use the RBDMS data management system for tracking oil, gas, injection well and water protection activities

• Since 1992, development of RBDMS software underwritten through grants from the DOE. Funding has also been provided by state agencies including in-kind services

• Provides access to data for well history, tracking ownership, bonding, permitting, location, construction, inspection, production, and plugging/ restoration, and compliance

• RBDMS development is directed by the Technical Committee, a users’ group whose participation is drawn from multiple states


Oil and gas wells drilled in 2012 and RBDMS partners

Currently talking to TX, CA, LA, and WV

Objectives of EIA-GWPC partnership


• Increase public availability of timely, accurate, and comprehensive U.S. oil and gas production data

• Continually strive to meet emerging data needs such as current need for shale production data

• Provide timely analyses of oil and gas production trends through geospatial analysis

• Collaborate with RBDMS partners to develop tailored data systems

EIA – GWPC/RBDMS Working Together to Improve Oil/Gas Data Availability and Quality


• Phase 1: Central data repository consisting of the latest available data from each RBDMS state

– pilot project, proof of concept for 4 states underway now

– future expansion to all 22 states

– data not as timely as EIA-914 expansion but will be used for EIA-914 QA

• Phase 2: Improved data collection – establish common/standard data definitions/translation across states

– improve QA processes

– expand number of states

– provide more timely analyses of oil/gas production using geospatial analysis and other GWPC/RBDMS data

Annual natural gas well starts and natural gas production in Pennsylvania

25

wells started billion cubic feet per day

Source: Pennsylvania Department of Environmental Protection


0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2005 2006 2007 2008 2009 2010 2011 2012

Horizontal Wells Non-Horizontal Wells Gas Production


• ND Dept of Mineral Resources provides timely, complete and reliable oil and gas data and information

• Data collection – streamlined and automated – electronic only

– advanced edit procedures applied

– collection at multiple points provides checks and balances and ensures consistency

– enforcement provides for timely responses from respondents

• Data reporting – timely and accurate – monthly data published 45 days after end of the month

– few/minor revisions to data

– public accessibility: comprehensive data posted on internet site

– continuous process and reporting improvement expand the public’s understanding of oil/gas developments in the state

– interactive GIS map server available to public with well level and field level data

North Dakota’s oil/gas information model

Why EIA matters to you


• Data from all states in one location: comparisons/rankings/maps

• Data-mining to routine monthly data retrievals

• Context and perspective: short and longer term outlooks

• Webinars, workshops, conferences

• Energy Explained and Energy Kids

My Challenge as Administrator: Improving the quality, timeliness and accessibility of EIA information – data, analysis and outlooks Building on data information management systems like RBDMS could be a way for all of us to benefit


U.S. Energy Information Administration home page | www.eia.gov

Annual Energy Outlook | www.eia.gov/forecasts/aeo

Short-Term Energy Outlook | www.eia.gov/forecasts/steo

International Energy Outlook | www.eia.gov/forecasts/ieo

Today In Energy | www.eia.gov/todayinenergy

Monthly Energy Review | www.eia.gov/totalenergy/data/monthly

Annual Energy Review | www.eia.gov/totalenergy/data/annual

For more information

http://www.eia.gov/

http://www.eia.gov/forecasts/aeo

http://www.eia.gov/forecasts/steo

http://www.eia.gov/forecasts/ieo

http://www.eia.gov/todayinenergy

http://www.eia.gov/totalenergy/data/monthly

http://www.eia.gov/totalenergy/data/annual

Status and outlook for shale gas and tight oil development ...U.S. Energy Information Administration...

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