Oil and Natural Gas Outlook to 2035...International Energy Outlook 2010 Howard Gruenspecht, US...

Oil and Natural Gas Outlook to 2035

US-Russia Energy Working Group May 26, 2010

Washington, DC

Howard Gruenspecht, Deputy Administrator

2Howard Gruenspecht, US-RUSSIA MEETING, May 26, 2010

Outline

• Energy overview (all fuels)

• Oil and other liquid fuels

• Natural gas


Non-OECD countries account for 86% of the increase in global energy use

0

200

400

600

800

2007 2015 2020 2025 2030 2035

Non-OECDOECD

495543

590639

687739

50%

62%

50% 38%

energy consumptionquadrillion Btu

Source: EIA, International Energy Outlook 2010


Use of liquid fuels and natural gas use grows from 2007 to 2035, but both fuels lose market share

0

50

100

150

200

250

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Liquids (including biofuels)

Renewables (excluding biofuels)

Natural gasCoal

Nuclear

History Projections

35%

27%

23%

10%

5%

30%

28%

22%

14%

6%

Share of world total

world primary energy consumptionquadrillion Btu



Oil and Other Liquid Fuels


Our outlook reflects uncertainty in oil prices by considering a wide set of price cases

0

25

50

75

100

125

150

175

200

225

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

$210

$133

$51

High Oil Price case

Reference case

Low Oil Price case

ProjectionsHistory

light, sweet crude oil price2008 dollars per barrel



OPEC producers maintain an approximate 40% share of total liquids production in the Reference case

0

20

40

60

80

100

120

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

45

111

13

OPEC conventional

Total

Unconventional

ProjectionsHistory

52Non-OPEC conventional

85

48

34

3

liquids productionmillion barrel per day



Brazil, Russia, Kazakhstan, and U.S. lead increases in non-OPEC conventional supplies

0

2

4

6

8

10

12

14

16

Russia UnitedStates

Brazil Kazakhstan OECDEurope

Mexico Canada

2007 2020 2035


conventional liquids productionmillion barrels per day


Natural Gas


Non-OECD Asia accounts for 35% of increasednatural gas use

0

20

40

60

80

100

120

140

160

2007 2015 2020 2025 2030 2035

Non-OECD Asia

Middle East

Other OECD

Central/South America

Africa

Non-OECDEurope/Eurasia

US

108

125136

145150 156


natural gas consumptiontrillion cubic feet


The Middle East accounts for almost one-third the increase in global natural gas production

-4 -2 0 2 4 6 8 10 12 14 16 18

Middle East

Non-OECD Asia

Africa

Non-OECD Europe/Eurasia

Central and South America

United States

Australia/New Zealand

Other OECD

PercentChange

2007-2035

-9%

164%

22%

101%

21%

104%

75%

125%

natural gas productiontrillion cubic feet



EIA expects increased shale gas production to have the largest market effects in North America and China

gas production in 2030 billion cubic meters

Source: EIA

0

200

400

600

800

1,000

US China Canada OECD Australia/ Latin Other MiddleEast

Russia

Shale gas

Other natural gas

Europe NewZealand

America Europe/Eurasia


By 2030, we expect shale gas to represent 7% of total global gas production

Source: EIA

0

1

2

3

4

5

2006 2010 2015 2020 2025 2030

Shale gasOther natural gas

global gas productiontrillion cubic meters


Over the past 5 years, EIA has significantly lowered its projection of LNG imports into the U.S.

0

50

100

150

200

2000 2005 2010 2015 2020 2025 2030 2035

History Projections

AEO2005

AEO2010

Source: EIA, Annual Energy Outlooks

U.S. net LNG importsbillion cubic meters


2000 2030

Significantly reduced expectations for future U.S. LNG imports relative to conventional wisdom a few years ago

Source: National Petroleum Council, 2007

LNG trade expectations as of 2005-2006:National Petroleum Council’s “Hard Truth’s” study

138 billion cubic meters

per year


0

30

60

90

120

150

2000 2005 2010 2015 2020 2025 2030

No new U.S. shale scenario

Reference scenario

High U.S. shale scenario

Shale gas production significantly affects projected U.S. gas imports, and could have similar effects in other gas importing countries

total U.S. natural gas imports billion cubic meters

ProjectionsHistory

Source: preliminary EIA projections


For more information

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

Short-Term Energy Outlook www.eia.gov/emeu/steo/pub/contents.html

Annual Energy Outlook www.eia.gov/oiaf/aeo/index.html

International Energy Outlook www.eia.gov/oiaf/ieo/index.html

Monthly Energy Review www.eia.gov/emeu/mer/contents.html

National Energy Information Center (202) 586-8800Live expert from 9:00 AM – 5:00 p.m. EST

Monday – Friday (excluding Federal holidays)email: [email protected]


EXTRA SLIDES:U.S. SHALE GAS AND IMPLICATIONS FOR WORLD

NATURAL GAS MARKETS


Since 1997, more than 12,000 gas wells completed in the Barnett shale

20Howard Gruenspecht, US-RUSSIA MEETING, May 26, 2010 Source: EIA

gas production billion cubic meters

wells drilled thousands

The result has been an accelerating increasein production from the Barnett field


U.S. shale gas plays

Success in the Barnett prompted companies to look at other shale formations in the U.S.


At this stage, the Haynesville and the Marcellus formations appear to be the most attractive

0

20

40

60

80

100

120

140

160

180

Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10

Source: Smith International

rigs drilling for gas

Barnett

Haynesville

Marcellus

Fayetteville

Woodford


Over the last decade, U.S. shale gas production has increased 8-fold

010

2030

4050

6070

8090

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Antrim Barnett FayettevilleWoodford Haynesville Marcellus

Source: EIA, Lippman Consulting (2009 estimated)

shale gas production billion cubic meters


Shale gas has been the primary source of recent growth in U.S. technically recoverable natural gas resources

0

10

20

30

40

50

60

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

EIA Annual Energy Outlook

Source: U.S. Geological Service, Mineral Management Service, private data, EIA.

technically recoverable gas resourcestrillion cubic meters

Unproved shale gas &coal-bed methane

Unproved conventional(including tight gas and Alaska*)

Proved reserves(all types & locations)

* Alaska resource estimates prior to AEO2009 reflect North Slope resources not included in previously published documentation.

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