U.S. Energy Information Administration _ Oil and Gas Sept 2014

North American Oil and Natural Gas
Supply and Demand
For
North Dakota Petroleum Council
September 24, 2014 | Dickinson, ND
By
Adam Sieminski, EIA Administrator
U.S. Energy Information Administration Independent Statistics & Analysis www.eia.gov

U.S. energy use grows slowly over the projection reflecting steady
growth in GDP offset by improving energy efficiency
120
100
80
60
40
20
0
2012
27%
8%
18%
8%
liquid biofuels 2%
1%
natural gas
coal
28%
9%
19%
8%
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
2
U.S. primary energy consumption
quadrillion Btu
Source: EIA, Annual Energy Outlook 2014 Early Release
history projections
37%
nuclear
oil and other liquids
renewables
(excluding liquid
biofuels)
34%
Shares of total U.S. energy
September 24, 2014

China’s use of liquid fuels exceeds the United States by 2035
liquid fuels consumption in China and the United States, Reference case
million barrels per day
25
20
15
10
5
0
history 2010 projections
United States
China
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
Source: EIA, International Energy Outlook 2014
September 24, 2014 3

Challenges in understanding U.S. transportation fuel use
4
vehicle miles traveled (VMT) and income indices
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
1995 = 1.0
personal disposable income per capita
VMT per capita
mean household income
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Source: U.S. Department of Transportation, U.S. Bureau of Labor Statistics, U.S. Bureau of Economic Analysis
September 24, 2014

Changing pattern of U.S. electricity use
percent growth
(3-year compounded annual growth rate)
14%
12%
10%
8%
6%
4%
2%
0%
-2%
1950 1960 1970 1980 1990 2000 2010
Source: EIA, Annual Energy Outlook 2014
5
electricity
use
GDP
• Structural change in economy
• Higher prices
• Standards
• Improved efficiency
September 24, 2014

The U.S. has experienced a rapid increase in natural gas and oil
production from shale and other tight resources
6
U.S. tight oil production
million barrels of oil per day
Eagle Ford (TX) 4.5
Bakken (MT & ND)
Spraberry (TX & NM Permian)
4.0
Bonespring (TX & NM Permian)
Wolfcamp (TX & NM Permian)
3.5
Delaware (TX & NM Permian)
Yeso-Glorieta (TX & NM Permian)
3.0
Niobrara-Codell (CO, WY)
Haynesville
2.5
Utica (OH, PA & WV)
2.0
Marcellus
Woodford (OK)
1.5
Granite Wash (OK & TX)
Austin Chalk (LA & TX)
1.0
Monterey (CA)
0.5
0.0
U.S. dry shale gas production
billion cubic feet per day
Marcellus (PA & WV) 40
Haynesville (LA & TX)
35
Eagle Ford (TX)
Fayetteville (AR)
30
Barnett (TX)
25
Woodford (OK)
Bakken (ND)
20
Antrim (MI, IN, & OH)
15
Utica (OH, PA & WV)
Rest of US 'shale'
10
5
0
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).
September 24, 2014

U.S. crude oil production approaches 13 million b/d by 2025 in
the High Oil and Gas Resource case
U.S. crude oil production in three cases
14
12
10
8
6
4
2
0
2012
history projections
High Oil and
Gas Resource
case
Reference
case
U.S. historic maximum production level:
9.6 million barrels/day (1970)
STEO September 2014
U.S. crude oil projection
1960 1970 1980 1990 2000 2010 2020
Source: EIA, Annual Energy Outlook 2014 Reference case and High Oil and Gas Resource case

Texas and North Dakota now account for nearly half of all oil
production in the United States
crude oil production by state, January 2010 to June 2014
9
8
7
6
5
4
3
2
1
0
North
Dakota
Texas
all other
states
25%
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
49%
8
Source: U.S. Energy Information Administration
September 24, 2014

U.S. rail carloads of crude oil and petroleum products exceed
1.5 million b/d in 2014
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
number of rail carloads per week
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2006 2007 2008 2009 2010 2011 2012 2013 2014
Source: U.S. Energy Information Administration, based on Association of American Railroads

U.S. oil production growth helping to offset unplanned outages
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
U.S. Production growth*
Jan-2012 Jul-2012 Jan-2013 Jul-2013 Jan-2014 Jul-2014
Other Non-OPEC
Syria
Sudan / S. Sudan
Iraq
Nigeria
Libya
Iran
10
estimated unplanned crude oil production outages
Source: EIA, Short-Term Energy Outlook, July 2014
*monthly production delta versus Jan. 2011 production level
Non-
OPEC
OPEC
September 24, 2014

U.S. is already a major net exporter of petroleum products
U.S. petroleum product net exports
3
2
1
0
-1
-2
-3
1950 1960 1970 1980 1990 2000 2010
Source: EIA, Annual Energy Outlook 2014 Reference case and Short Term Energy Outlook
2015(e)

U.S. exports of petroleum products to Mexico and Canada have
more than doubled and tripled, respectively, since 2004
U.S. petroleum products exports
thousand barrels per day
600
500
400
300
200
100
0
Mexico
Canada
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Source: EIA, Petroleum Supply Monthly
Jan-Feb

North American net imports of oil and natural gas
North American net imports, 1965-2013
million metric tons oil equivalent
600
500
400
300
200
100
0
-100
net oil imports
net gas imports
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Source: BP Statistical Review of World Energy 2014

Most of the growth in production between 2011 and 2015
consists of sweet grades with API gravity of 40 or above
10
9
8
7
6
5
4
3
2
1
0
history forecast
2011 2012 2013 2014 2015
API 50+
API 40-50
API 35-40
API 27-35
API below 27
U.S. crude oil production by type
million barrels of oil per day
Source: EIA, DrillingInfo, Colorado DNR, Texas RRC. http://www.eia.gov/analysis/petroleum/crudetypes/

Distillation processes and resulting products
processed products for domestic use or exportable without license
finished petroleum products and other
processed hydrocarbon liquids
processed
condensate
stabilizer finished product streams
separation via temperature gradients
flash drum heater treater
field / lease separator
mixed hydrocarbon wells
(gas, condensate, oil)
dry gas
(exportable with
order/authorization)
EIA Refinery Survey
splitter complex
distillation
crude oil / lease condensate
plant
condensate
gas processing plant
fractionator separator
wet gas (exportable under limited conditions)
water
separation via pressure changes
other
processed
gas liquids

U.S. shale gas leads growth in total gas production through
2040, when production exceeds 100 billion cubic feet per day
16
U.S. dry natural gas production
trillion cubic feet
40
35
30
25
20
15
10
5
Shale gas
Tight gas
Non-associated onshore
Non-associated offshore Alaska
Associated with oil
Source: EIA, Annual Energy Outlook 2014 Reference case
100
90
80
70
60
50
40
30
20
10
0
0
Coalbed methane
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
September 24, 2014

U.S. natural gas prices are expected to remain well below crude
oil prices
17
energy spot prices
2012 dollars per million Btu
30
25
20
15
10
5
0
history projections
1990 1995 2000 2005 2010 2015 2020 2025
2012
Henry Hub
natural gas
spot price
September 24, 2014
Brent crude oil
spot price
oil to gas
price ratio:
7.1
ratio:
3.6

Onshore natural gas production continues to grow, outpacing
declines in offshore and causing net imports to shrink
U.S. Natural Gas Production and Imports
billion cubic feet per day (Bcf/d)
80
70
60
50
40
30
20
10
0
-10
Source: Short-Term Energy Outlook, September 2014
18
September 24, 2014
8
7
6
5
4
3
2
1
0
-1
-2
2012 2013 2014 2015
-20
Federal Gulf of Mexico production (right axis)
U.S. non-Gulf of Mexico production (right axis)
U.S. net imports (right axis)
Total marketed production (left axis)
annual change (Bcf/d)

U.S. becomes a net exporter of natural gas in the near future
19
U.S. dry natural gas
trillion cubic feet per year
40
30
20
10
0
-10
Consumption
Domestic supply
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
September 24, 2014
Net exports
100
75
50
25
0
-25

Projected U.S. natural gas trade depends on assumptions
regarding resources and future technology advances
Reference case
8
6
exports to
Mexico
exports to
4
Canada
lower 48
2
LNG exports
0
imports from
Canada
-2
8
6
4
2
0
-2
LNG imports
Source: EIA, Annual Energy Outlook 2014 Reference case and High Oil and Gas Resource case
20
September 24, 2014
-4
2010 2015 2020 2025
-4
2010 2015 2020 2025
High Oil and Gas Resource case
billion cubic
feet per day
20
15
10
5
0
-5
-10

share of flared natural gas
60%
50%
40%
30%
20%
10%
0%
Though flaring is trending down somewhat, a large share of
natural gas production does not go to market
North Dakota natural gas production
thousand cubic feet per day
1200
1000
800
600
400
200
0
marketed gas
production
non-marketed gas
production
percentage
flared
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
21
Source: North Dakota Industrial Commission, Department of Mineral Resources, Oil and Gas Division
September 24, 2014

For more information
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
State Energy Portal | www.eia.gov/state
Drilling Productivity Report | www.eia.gov/petroleum/drilling/

U.S. Energy Information Administration _ Oil and Gas Sept 2014

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U.S. Energy Information Administration _ Oil and Gas Sept 2014