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The U.S. Natural Gas Market in Focus. for Flame 2012 April 17, 2012 | Amsterdam, The Netherlands by Howard Gruenspecht, Acting Administrator. Current and Projected Supply and Demand Conditions. U.S. natural gas storage has reached an unprecedented high for this time of year.

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The u s natural gas market in focus
The U.S. Natural Gas Market in Focus

for

Flame 2012

April 17, 2012 | Amsterdam, The Netherlands

by

Howard Gruenspecht, Acting Administrator

Current and Projected Supply and Demand Conditions


U s natural gas storage has reached an unprecedented high for this time of year
U.S. natural gas storage has reached an unprecedented high for this time of year

Billion Cubic Feet

Billion Cubic Meters

Flame - The U.S. Natural Gas Market in Focus, Howard Gruenspecht, April 17, 2012


U s natural gas spot prices are very low compared to prices in other regions and oil prices
U.S. natural gas spot prices are very low compared to prices in other regions and oil prices

Sources: EIA, Bloomberg, as of April 10, 2012

Flame - The U.S. Natural Gas Market in Focus, Howard Gruenspecht, April 17, 2012






Foreign joint venture investment in u s shale gas and tight oil plays
Foreign joint venture investment in U.S. shale gas and tight oil plays

Source: EIA, from trade press reports as of 27 February 2012

Flame - The U.S. Natural Gas Market in Focus, Howard Gruenspecht, April 17, 2012


Technically recoverable natural gas resources reflect updated assessments
Technically recoverable natural gas resources reflect updated assessments

U.S. dry gas resources

trillion cubic feet

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

Source: EIA, Annual Energy Outlook

Unproved shale gas

Unproved other gas (including Alaska* and offshore)

Proved reserves (all types and locations)

2,214

482

1,460

273

AEO Edition

Flame - The U.S. Natural Gas Market in Focus, Howard Gruenspecht, April 17, 2012


The u s natural gas market in focus
The average delivered price of coal to electricity generators varies widely across U.S. regions – transport costs are a key reason

2010 Delivered coal prices, $ per million Btu

$3.41

$2.02

$2.96

$2.01

N/A

$1.51

$1.49

N/A

$2.48

$2.91

$1.75

$1.57

$1.46

1.77

$2.45

$3.65

$1.83

$1.93

$1.83

$3.40

$1.91

$4.46

Source: EIA, Annual Energy Outlook 2012 Early Release

Flame - The U.S. Natural Gas Market in Focus, Howard Gruenspecht, April 17, 2012


The u s natural gas market in focus
Natural gas consumption is quite dispersed; electric power and industrial use drives much of the future demand growth

U.S. dry gas consumption

trillion cubic feet per year

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

Source: EIA, Annual Energy Outlook 2012 Early Release

History

Projections

Electric

power

34%

31%

32%

Industrial*

33%

13%

13%

Commercial

3%

3%

Transportation**

18%

21%

Residential

Flame - The U.S. Natural Gas Market in Focus, Howard Gruenspecht, April 17, 2012


The u s natural gas market in focus
Electricity mix gradually shifts to lower-carbon options, led by growth in renewables and natural gas

electricity net generation

trillion kilowatthours per year

Source: EIA, Annual Energy Outlook 2012 Early Release

2010

27%

Natural gas

24%

16%

Renewables

10%

39%

Coal

45%

20%

18%

Oil and other liquids

Nuclear

1%

1%

Flame - The U.S. Natural Gas Market in Focus, Howard Gruenspecht, April 17, 2012


Shale gas offsets declines in other u s natural gas production sources
Shale gas offsets declines in other U.S. natural gas production sources

U.S. dry gas production

trillion cubic feet per year

Source: EIA, Annual Energy Outlook 2012 Early Release

History

Projections

2010

49%

Shale gas

23%

26%

Tight gas

21%

9%

Non-associated offshore

9%

7%

Coalbed methane

10%

7%

Associated with oil

7%

21%

Non-associated onshore

1%

2%

9%

Alaska

Flame - The U.S. Natural Gas Market in Focus, Howard Gruenspecht, April 17, 2012


Oil to natural gas price ratio remains high over the projection
Oil to natural gas price ratio remains high over the projection

ratio of oil price to natural gas price

Source: EIA, Annual Energy Outlook 2012 Reference Case

History

2009

Projections

Oil and natural gas prices

2010 dollars per million Btu

History

2009

Projections

Flame - The U.S. Natural Gas Market in Focus, Howard Gruenspecht, April 17, 2012


Domestic natural gas production grows faster than consumption
Domestic natural gas production grows faster than consumption

U.S. dry gas

trillion cubic feet per year

Source: EIA, Annual Energy Outlook 2012 Early Release

History

Projections

2010

Consumption

Domestic supply

Net imports

Flame - The U.S. Natural Gas Market in Focus, Howard Gruenspecht, April 17, 2012


For more information

U.S. Energy Information Administration home page | consumption 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

For more information

EIA Information Center

InfoCtr@eia.gov

Our average response time is within three business days.

(202) 586-8800

24-hour automated information line about EIA and frequently asked questions.

Flame - The U.S. Natural Gas Market in Focus, Howard Gruenspecht, April 17, 2012