Analytical questions for shale gas and tight oil ... · U.S. Energy Information Administration...
28
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 Consumer Energy Alliance February 21, 2013 | Washington, D.C. By Adam Sieminski, Administrator
Transcript of Analytical questions for shale gas and tight oil ... · 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 Consumer Energy Alliance February 21, 2013 | Washington, D.C. By Adam Sieminski, Administrator
Annual Energy Outlook 2013 projections to 2040
2
• Growth in energy production outstrips consumption growth
• Crude oil production rises sharply over the next decade
• Motor gasoline consumption reflects more stringent fuel economy standards
• The U.S. becomes a net exporter of natural gas in the early 2020s
• U.S. energy-related carbon dioxide emissions remain below their 2005 level through 2040
Adam Sieminski February 21, 2013
U.S. energy use grows slowly over the projection reflecting improving energy efficiency and slow, extended economic recovery
3
0
20
40
60
80
100
120
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
U.S. primary energy consumption quadrillion Btu
Adam Sieminski February 21, 2013
History Projections 2011
36%
20%
26%
8% 8%
1%
32%
28%
19%
11%
9% 2%
Shares of total U.S. energy
Nuclear
Oil and other liquids
Liquid biofuels
Natural gas
Coal
Renewables (excluding liquid biofuels)
2000
23%
39%
24%
6% 8%
Source: EIA, Annual Energy Outlook 2013 Early Release
There are three main drivers of oil and natural gas production and resource estimates
Adam Sieminski February 21, 2013 4
Technology Geology
Economics
Theory Experiment Practice
These three drivers impact resource estimation metrics differently over time in an iterative process
Adam Sieminski February 21, 2013 5
Geology
Technology
Economics
Resources in Place
Technically Recoverable Resources (TRR)
Economically Recoverable Resources (ERR)
Well-level data, incl. estimated ultimate recovery (EUR)
Thermal maturity Pressure Formation depth
Drilling costs Recompletions
Price of gas
P
Q
EIA’s focus is on the timing of production; the modeling focuses on these parameters
Adam Sieminski February 21, 2013 6
• average initial production (IP) rate per well
• average decline curve (can vary by region and vintage)
• IP & decline curve define the Estimated Ultimate Recovery (EUR) per well
Other parameters
• drilling and operating costs
• number of active rigs
• how many wells a rig can drill (rig efficiency)
• well spacing
Technically recoverable resources (TRR) result from the well analysis
Adam Sieminski February 21, 2013 7
Area (acres)
÷ drainage area of a well
× % of area not yet drilled
× % area with potential
× distribution of EUR/well (see previous slide, this is the area under the curve for an individual well)
= undiscovered TRR
U.S. Shale Gas
Adam Sieminski February 21, 2013 8
Technically recoverable natural gas resources reflect new information, a combination of assessments and EIA updates
Adam Sieminski February 21, 2013 9
U.S. dry gas resources trillion cubic feet
Source: EIA, Annual Energy Outlook 2013 Early Release AEO Edition
0
500
1000
1500
2000
2500
3000
2000 2005 2006 2007 2008 2009 2010 2011 2012 2013
2,327
304
543
1,479
*Alaska resource estimates prior to AEO2009 reflect resources from the North Slope that were not included in previously published documentation.
Unproved shale gas Unproved other gas (including Alaska* and offshore) Proved reserves (all types and locations)
USGS Marcellus
Assessment Benchmarking
Domestic production of shale gas has grown dramatically over the past few years
10
0
5
10
15
20
25
30
2000 2002 2004 2006 2008 2010 2012
Rest of US Marcellus
Haynesville Eagle Ford
Bakken Woodford
Fayetteville Barnett
Antrim
shale gas production (dry) billion cubic feet per day
Sources: LCI Energy Insight gross withdrawal estimates as of December 2012 and converted to dry production estimates with EIA-calculated average gross-to-dry shrinkage factors by state and/or shale play.
Adam Sieminski February 21, 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
11
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 February 21, 2013
For example: Oil production by monthly vintage of wells in the Williston Basin
Adam Sieminski February 21, 2013 12
Source: DrillingInfo history through August 2012, EIA Short-Term Energy Outlook, February 2013 forecast
Shale gas leads growth in total gas production through 2040
13
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
Adam Sieminski February 21, 2013
14
0
5
10
15
20
25
30
35
2005 2011 2020 2025 2030 2035 2040
U.S. dry gas consumption trillion cubic feet
Source: EIA, Annual Energy Outlook 2013 Early Release
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
Adam Sieminski February 21, 2013
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?
15
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
Adam Sieminski February 21, 2013
Domestic natural gas production grows faster than consumption and the U.S. becomes a net exporter of natural gas around 2020
16
-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
Source: EIA, Annual Energy Outlook 2013 Early Release
Projections History 2011
Consumption
Domestic supply
Net imports
Adam Sieminski February 21, 2013
U.S. Tight Oil
Adam Sieminski February 21, 2013 17
Adam Sieminski February 21, 2013 18
U.S. crude oil and lease condensate resources in non-prohibited areas billion barrels
(1) The USGS reduced NPR-A resource estimates, which is responsible for the lower AEO2013 Alaska resources. (2) Prior to AEO2009, resources in Pacific, Atlantic, and Eastern GOM OCS were under moratoria and not included. (3) Includes shale oil. Prior to AEO2011, tight oil is included in unproved other lower-48 onshore category.
Multiple factors have contributed to U.S. crude oil resource estimate increases over the years, with tight oil contributing recently
Source: EIA, Annual Energy Outlook 2013 Early Release
0
50
100
150
200
250
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Year of Annual Energy Outlook
Unproved Alaska (1) Unproved L48 Offshore (2) Unproved Tight Oil (3) Unproved Tight Oil (reclassified from onshore) Unproved Other L48 Onshore Proved Reserves
23.8
48.6
41.6
16.5
67.0
25.2
222.6
Domestic production of tight oil has grown dramatically over the past few years
19
tight oil production for select plays million barrels per day
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2000 2002 2004 2006 2008 2010 2012
Eagle Ford Bakken
Granite Wash Bonespring
Monterey Woodford
Niobrara-Codell Spraberry
Austin Chalk
Source: Drilling Info (formerly HPDI), Texas RRC, North Dakota department of mineral resources, and EIA, through August 2012
Adam Sieminski February 21, 2013
U.S. tight oil production by selected plays
20
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
Bakken Eagle Ford Woodford Austin Chalk Spraberry Niobrara Avalon/Bone Springs Monterey Wolfcamp Other
U.S. crude oil production million barrels per day
Source: EIA, Annual Energy Outlook 2013 Early Release
Projections History 2011
Adam Sieminski February 21, 2013
U.S. tight oil production leads a growth in domestic production of 2.6 million barrels per day between 2008 and 2019
21
U.S. crude oil production million barrels per day
Source: EIA, Annual Energy Outlook 2013 Early Release and Short-Term Energy Outlook, February 2013
Adam Sieminski February 21, 2013
0
2
4
6
8
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
Projections History 2011
Alaska
Tight oil
Other lower 48 onshore
Lower 48 offshore
STEO Feb. 2013 U.S. crude oil projection
U.S. import share of liquid fuels declines due to increased production of tight oil and gas liquids, and greater fuel efficiency
22
0
5
10
15
20
25
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
U.S. liquid fuels supply million barrels per day
Source: EIA, Annual Energy Outlook 2013 Early Release Note: Petroleum production includes: crude oil, lease condensates, refinery gain, stock changes
Projections History
Natural gas plant liquids
Petroleum production
Biofuels excluding imports
Net petroleum and biofuel imports
17%
7%
37%
38%
5%
45%
38%
12%
Liquids from natural gas and coal 1%
2011
Adam Sieminski February 21, 2013
More stringent standards for liquids consumption in light-duty vehicles made a big difference in EIA’s demand projections
23
Light-duty vehicle liquids consumption million barrels per day
Source: EIA, Annual Energy Outlook 2013 Early Release
0
2
4
6
8
10
2010 2015 2020 2025 2030 2035 2040
AEO2012
AEO2013
Adam Sieminski February 21, 2013
Global Shale Gas and Tight Oil
Adam Sieminski February 21, 2013 24
EIA/ARI study to update & expand coverage of shale gas assessment and identifying prospective tight oil formations
Source: U.S. Energy Information Administration www.eia.gov/analysis/studies/worldshalegas/
,not assessed
25 Adam Sieminski February 21, 2013
Uncertainties that could slow global growth of shale gas and tight oil
Adam Sieminski February 21, 2013 26
• Resource quantities and distribution
• Surface vs. mineral rights
• Risk appetite of industry participants
• Infrastructure/technology
• Environmental constraints
Adam Sieminski February 21, 2013 27
Source: Preliminary International Energy Outlook 2013, BP Energy Outlook 2030
0
2
4
6
8
10
12
2000 2010 2020 2030 2040
Australia China Russia Argentina Mexico Canada United States
million barrels per day
BP Energy Outlook 2030 IEO2013 DRAFT
Global tight oil production comparisons
For more information
28
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
Adam Sieminski February 21, 2013
