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The U.S. Natural Gas and Shale Production Outlook

The U.S. Natural Gas and Shale Production Outlook. for North American Gas Forum September 29, 2014 by Adam Sieminski, Administrator. The U.S. has experienced a rapid increase in natural gas and oil production from shale and other tight resources.

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The U.S. Natural Gas and Shale Production Outlook

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  1. The U.S. Natural Gas and Shale Production Outlook for North American Gas Forum September 29, 2014 by Adam Sieminski, Administrator

  2. The U.S. has experienced a rapid increase in natural gas and oil production from shale and other tight resources Sources: EIA derived from state administrative data collected by DrillingInfo Inc. Data are through July 2014 and represent EIA’s official tight oil & shale gas estimates, but are not survey data. State abbreviations indicate primary state(s). North American Gas Forum September 29, 2014

  3. U.S. natural gas prices are expected to remain well below crude oil prices energy spot prices 2012 dollars per million Btu Source: EIA, Annual Energy Outlook 2014, Reference case 2012 projections history Brent crude oil spot price oil to gas price ratio: 7.1 ratio: 3.6 Henry Hub natural gas spot price North American Gas Forum September 29, 2014

  4. Rig productivity has increased greatly, making rig count no longer correlated with production Natural gas and oil-directed rig counts and natural gas marketed production rig count billion cubic feet per day marketed natural gas production total rig count natural gas-directed rigs marketed gas production oil-directed rigs non-marketed gas production Sources: Natural gas production figures from EIA Short-term Energy Outlook, rig counts from Baker Hughes North American Gas Forum September 29, 2014

  5. A larger share of new wells produce both oil and natural gas natural gas only oil only marketed gas production oil and natural gas non-marketed gas production Source: EIA based on DrillingInfo North American Gas Forum September 29, 2014

  6. Source: EIA, Annual Energy Outlook 2014 Reference case and High Oil and Gas Resource case; Short Term Energy Outlook, September 2014 Resource and technology assumptions have major implications for projected U.S. crude oil production beyond the next few years Reference case million barrels per day High Oil and Gas Resource case million barrels per day 2012 2012 history projections history projections STEO September 2014 U.S. crude oil projection tight oil tight oil other lower 48 states onshore other lower 48 states onshore lower 48 states offshore lower 48 states offshore Alaska Alaska North American Gas Forum September 29, 2014

  7. U.S. shale gas leads growth in total gas production through 2040, when production exceeds 100 billion cubic feet per day U.S. dry natural gas production trillion cubic feet Source: EIA, Annual Energy Outlook 2014, Reference case billion cubic feet per day 2012 projections history Shale gas Tight gas Non-associated onshore Non-associated offshore Alaska Associated with oil Coalbed methane North American Gas Forum September 29, 2014

  8. Natural gas consumption growth is driven by electric power, industrial, and transportation use U.S. dry gas consumption trillion cubic feet Source: EIA, Annual Energy Outlook 2014, Reference case history projections 11.0 electric power 8.5 industrial* 11.2 9.1 1.7 transportation** 0.7 3.6 2.9 commercial 4.1 4.2 residential *Includes combined heat-and-power and lease and plant fuel **Includes pipeline fuel North American Gas Forum September 29, 2014

  9. Manufacturing output and natural gas use grows with low natural gas prices, particularly in the near term manufacturing natural gas consumption quadrillion British thermal units Source: EIA, Annual Energy Outlook 2014, Reference case billion cubic feet per day refining and related bulk chemicals food iron and steel metal-based durables paper other manufacturing glass aluminum North American Gas Forum September 29, 2014

  10. U.S. becomes a net exporter of natural gas in the near future Source: EIA, Annual Energy Outlook 2014 Reference case billion cubic feet per day U.S. dry natural gas trillion cubic feet per year 2012 history projections 100 75 consumption 50 domestic supply 25 0 net exports -25 North American Gas Forum September 29, 2014

  11. Projected U.S. natural gas trade depends on assumptions regarding resources and future technology advances Source: EIA, Annual Energy Outlook 2014 Reference case and High Oil and Gas Resource case Reference case trillion cubic feet per year High Oil and Gas Resource case trillion cubic feet per year billion cubic feet per day 20 exports to Mexico 15 exports to Canada 10 lower 48 LNG exports 5 0 imports from Canada -5 LNG imports -10 North American Gas Forum September 29, 2014

  12. U.S. Energy Information Administration home page | www.eia.gov Annual Energy Outlook | www.eia.gov/aeo Short-Term Energy Outlook | www.eia.gov/steo International Energy Outlook | www.eia.gov/ieo Monthly Energy Review | www.eia.gov/mer Today in Energy | www.eia.gov/todayinenergy Drilling Productivity Report | www.eia.gov/petroleum/drilling/ For more information North American Gas Forum September 29, 2014

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