Shale Gas and the Outlook for U.S. Natural Gas Markets and Global Gas Resources Organization for Economic Cooperation and Development (OECD) Richard Newell, Administrator June 21, 2011 Paris, France U.S. Energy Information…
Overview History of U.S. shale gas production Outlook for the U.S. natural gas market Implications for electric power World shale gas resources: An initial assessment Richard Newell, Paris June 2011 2
Underground sources of natural gas Source: modified from U.S. Geological Survey Fact Sheet 0113-01 Richard Newell, Paris June 2011 3
Diagram of a typical hydraulic fracturing operation Source: ProPublica, http://www.propublica.org/special/hydraulic-fracturing-national Richard Newell, Paris June 2011 4
History of U.S. shale gas production Richard Newell, Paris June 2011 5
Since 1997, more than 13,500 gas wells completed in the Barnett shale Richard Newell, Paris June 2011 6
The result has been rapid increases in production from the Barnett field gas production wells drilled billion cubic meters thousands Source: EIA Richard Newell, Paris June 2011 7
Shale gas plays, Lower 48 States Source: Energy Information Administration based on data from various published studies. Richard Newell, Paris June 2011 8
North American shale plays Source: U.S. Energy Information Administration based on data from various published studies. Canada and Mexico plays from ARI. Richard Newell, Paris June 2011 9
At this stage, the Haynesville and the Marcellus formations appear to be the most attractive rigs drilling for gas Barnett Haynesville Marcellus Eagle Ford Woodford Fayetteville Source: Smith International Richard…
Over the last decade, U.S. shale gas production has increased 12-fold and now comprises about 25 percent of total U.S. production annual shale gas production trillion cubic feet Sources: EIA and Lippman Consulting Richard Newell,…
Outlook for U.S. gas market Richard Newell, Paris June 2011 12
Recent Annual Energy Outlook natural gas resources U.S. dry natural gas resources trillion cubic feet 2543 Unproved 827 shale gas Unproved other gas (including 1472 Alaska and offshore) Proved reserves 245 (all types &…
Shale gas offsets declines in other U.S. supply to meet consumption growth and lower import needs U.S. dry gas trillion cubic feet per year History 2009 Projections 30 1% 25 Net imports 11% 20 46% 14% Shale gas 15 20%…
30% domestic gas production growth outpaces 16% consumption growth, leading to declining imports U.S. dry gas trillion cubic feet per year History 2009 Projections 1% Consumption 6% Net imports 11% Domestic supply AEO2011…
Natural gas price projections are significantly lower than past years due to an expanded shale gas resource base natural gas spot price (Henry Hub) 2009 dollars per million Btu History 2009 Projections 9/MMBtu Updated AEO2009…
Oil to natural gas price ratio remains high over the projection ratio of oil price to natural gas price History 2009 Projections Oil and natural gas prices 2009 dollars per Btu History 2009 Projections Source: EIA, Annual…
U.S. oil rig count overtakes natural gas rig count oil-to-gas price ratio share of weekly rig count million Btu per barrel Gas-directed rigs Crude oil-to-natural gas price ratio Oil-directed rigs Sources: EIA, Baker…
Shale gas resource potential and related costs remain highly uncertain shale gas production Four alternate cases trillion cubic feet High Estimated Ultimate Recovery (EUR) case assumes an EUR per shale gas well set 50% higher than in…
Implications for electric power Richard Newell, Paris June 2011 20
Natural gas, wind and other renewables account for the vast majority of capacity additions from 2009 to 2035 2009 capacity Capacity additions 2009 to 2035 Nuclear 101 (10%) Coal 313 (30%) Hydropower* Nuclear Hydropower* 3 (1%) 6…
Electricity generation capacity additions by fuel type, 2010-2035 electric power capacity additions gigawatts Natural gas Renewables Coal Nuclear Source: EIA, Annual Energy Outlook 2011 Richard Newell, Paris June 2011 22
Natural gas electricity generation outlook varies with economic growth and regulatory policies electricity generation billion kilowatthours Source: EIA, Annual Energy Outlook 2011 Richard Newell, Paris June 2011 23
World shale gas resources: an initial assessment Richard Newell, Paris June 2011 24
Initial assessment of shale gas resources in 48 major shale basins in 32 countries indicates a large potential Source: U.S. Energy Information Administration Richard Newell, Paris June 2011 25
32 countries covered in the report North America Europe Canada, Mexico Denmark, France, Germany, Netherlands, Norway, Sweden, South America United Kingdom, Lithuania, Poland, Colombia, Venezuela, Argentina, Ukraine, Turkey Bolivia,…
Approach and methodology 1. Conducted preliminary geologic and reservoir characterization of shale basins and formation(s) 2. Established the areal extent, thickness and key reservoir properties of the major shale gas formations 3.…
Findings The initial shale gas technically recoverable resource (TRR) estimates for the 32 countries outside the U.S. is 5,760 Tcf More than six times EIAs 862 Tcf TRR estimate for U.S. shale gas Together with U.S. shale gas, world…
Findings (continued) Countries dependent on imports but have significant shale gas resource estimates relative to their production or consumption France, Poland, Turkey, Ukraine, South Africa, Morocco, Chile Countries that already…
Technically recoverable shale gas resource estimates (trillion cubic feet) Technically Continent Recoverable (Tcf) North America (non U.S.) Canada, Mexico 1,069 U.S. 862 Total North America 1931 Morocco, Algeria, Tunisia, Libya,…
Technically recoverable shale gas resource estimates (trillion cubic meters) Technically Continent Country Recoverable (Tcm) North America (non U.S.) Canada and Mexico 30.3 U.S. 24.4 Total North America Canada, Mexico, U.S. 54.7…
Western Europes shale gas resources and basins Onshore shale gas basins of Western Europe Western Europes shale gas resources (assessed by our study) exist in the Ordovician Alum shale of Scandinavia, the Permian/Carboniferous…
Distribution of Western Europes shale gas resources France holds large technically recoverable shale gas resources (180 Tcf or 5.10 Tcm) in the France Paris and South-East basins. Germany Netherlands Norways (83 Tcf or 2.35…
Polands shale gas resources and basins Onshore Shale Gas Basins of Poland Poland appears to hold some of the geologically most favorable shale gas resources in Europe, primarily in three basins: Baltic Lublin Podlasie Our shale…
For more information U.S. Energy Information Administration home page 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…
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