U.S. Energy Information Administration Independent Statistics & Analysis www.eia.gov

Annual Energy Outlook

Preliminary results for oil, natural gas, & liquid fuels

for

Oil and Gas Supply, Natural Gas Markets, & Liquid Fuels Markets Working Group

September 21, 2017 | Washington, DC

by

John Staub, Office Director for Petroleum, Natural Gas, and Biofuels Analysis 

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Source: Preliminary AEO2018 runs, dated as of 9/19/17

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

Brent crude oil prices are lower compared to AEO2017

Brent crude oil spot price

$/barrel

2

History Projection

0

50

100

150

200

250

2010 2015 2020 2025 2030 2035 2040 2045

2018 reference case 2018 low price case 2018 high price case

2017 reference case 2017 low price case 2017 high price case
Oil and Gas Supply

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change 3
0

50

100

150

200

250

300

350

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Edition of the Annual Energy Outlook 

Unproved tight oil (including shale oil)

Unproved other oil (including Alaska and offshore)

Proved reserves (all types and locations)

Source: U.S. Energy Information Administration, Annual Energy Outlook 2018 and prior editions

Note: Resources are as of January 1 of two years prior to the “edition” year of the AEO (e.g. AEO2018 is 1/1/2016).

Multiple factors have contributed to crude oil resource estimate increases over the 

years, with tight oil contributing recently 

U.S. crude oil and lease condensate resources

billion barrels

4

107

151

35

293

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC 

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change
0

2

4

6

8

10

12

14

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Preliminary AEO2018 Ref

AEO2017 Reference

Source: Preliminary AEO2018 runs, dated as of 9/19/17

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

U.S. crude oil production is higher than last year’s AEO

U.S. crude oil production

million barrels per day

5

History Projections
0

1

2

3

4

5

6

7

8

9

1995 2010 2020 2030 2040 2050

Preliminary AEO2018 Ref

AEO2017 Reference

0

1

2

3

4

1995 2010 2020 2030 2040 2050

Other Lower 48

Lower 48 offshore AEO2017

Lower 48 offshore

Alaska

U.S. tight oil production 

million barrels per day

U.S. crude oil production other than tight oil 

million barrels per day

Source: Preliminary AEO2018 runs, dated as of 9/19/17

Higher tight oil resources lead to higher total domestic crude oil production in 

AEO2018 

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change 6
0.0

0.4

0.8

1.2

1.6

2.0

2.4

2.8

3.2

3.6

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

 Sum of selected Permian

 Wolfcamp*

 Bakken

 Other

 Eagle Ford

 Spraberry*

 Avalon/Bone Springs*

 Austin Chalk

 Niobrara

 Woodford

 Monterey

*Permian Basin

Source: Preliminary AEO2018 runs, dated as of 9/19/17

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

Bakken and Wolfcamp lead growth in tight oil production

Crude oil production by selected tight oil plays

million barrels per day

7

History Projections
0

500

1,000

1,500

2,000

2,500

3,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Edition of the Annual Energy Outlook

Source: U.S. Energy Information Administration, Annual Energy Outlook 2018 and prior editions

Note: Resources are as of January 1 of two years prior to the “edition” year of the AEO (e.g. AEO2018 is 1/1/2016).

Technically recoverable natural gas resources reflect new information, a combination 

of assessments and EIA updates

U.S. dry gas resources

trillion cubic feet

8

308

985

1,149

Unproved shale gas (including tight oil plays)

Unproved other gas (including Alaska and offshore)

Proved reserves (all types and locations)

2,442

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC 

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change
0

5

10

15

20

25

30

35

40

45

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Preliminary AEO2018 Ref

AEO2017 Reference

Source: Preliminary AEO2018 runs, dated as of 9/19/17

U.S. dry natural gas production is higher than last year’s AEO

U.S. dry natural gas production 

trillion cubic feet

9

History Projections

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change
0

5

10

15

20

25

30

35

1995 2010 2020 2030 2040 2050

Preliminary AEO2018 Ref

AEO2017 Reference

0

1

2

3

4

5

6

7

8

9

10

1995 2010 2020 2030 2040 2050

Tight Gas

Other Lower 48

Lower 48 Offshore

Coalbed Methane

Alaska

U.S. dry shale gas production 

trillion cubic feet

U.S. dry natural gas production 

trillion cubic feet

Note: Shale gas includes natural gas production in tight oil plays.

Source: Preliminary AEO2018 runs, dated as of 9/19/17

Shale gas leads growth in U.S. dry natural gas production in AEO2018 

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change 10
0

2

4

6

8

10

12

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

 Marcellus

 Utica

 Other

 Haynesville/Bossier

 Eagle Ford

 Barnett

 Fayetteville

 Woodford

 Bakken

 Antrim

Note: Other includes natural gas production in tight oil plays.

Source: Preliminary AEO2018 runs, dated as of 9/19/17

Marcellus and Utica lead production of U.S. shale gas 

Dry natural gas production by selected shale play

trillion cubic feet

11

History Projections

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC 

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change
0

1

2

3

4

5

6

2000 2005 2010 2015 2020 2025 2030 2035 2040

Preliminary AEO2018 Ref

AEO2017 Reference

Source: Preliminary AEO2018 runs, dated as of 9/19/17

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

NGPL production is higher than last year’s AEO

Natural gas plant liquids production

million barrels per day

12

History Projections
Liquid fuels markets

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change 13
0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2015 2020 2025 2030 2035 2040 2045 2050

2018 reference case

Source: Preliminary AEO2018 runs, dated as of 9/19/17

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

Crude oil exports rise through most of the projection period

U.S. crude oil exports

million barrels per day

14

Projections
Source: Preliminary AEO2018 runs, dated as of 9/19/17

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

The Brent-WTI price spread widens and then levels off in the projection period

Brent-WTI price spread

$/barrel

15

Projection

0

1

2

3

4

5

2015 2020 2025 2030 2035 2040 2045 2050

2018 reference case
-6

-5

-4

-3

-2

-1

0

2015 2020 2025 2030 2035 2040 2045 2050

2018 reference case

Source: Preliminary AEO2018 runs, dated as of 9/19/17

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

Net imports of petroleum products are largely driven by trends in domestic petroleum 

product consumption

Net petroleum product imports

millions of barrels per day

16

Projection
Source: Preliminary AEO2018 runs, dated as of 9/19/17

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

After updating taxes, distribution costs, and international supply/demand curves, the 

spread between gasoline and diesel will be lower in AEO2018

Diesel and Gasoline end-use prices

$/gallon

17

Projection

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

2015 2020 2025 2030 2035 2040 2045 2050

2018 diesel

2018 gasoline

2017 diesel

2017 gasoline
Note: Includes ethanol, biodiesel, and other advanced renewable production.

Source: Preliminary AEO2018 runs, dated as of 9/19/17

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

Renewable liquids production is higher in AEO2018, resulting from updates to 

feedstock prices

Domestic renewable liquids production

millions of barrels per day

18

Projection

0.75

0.85

0.95

1.05

1.15

1.25

2015 2020 2025 2030 2035 2040 2045 2050

2018 reference case 2017 reference case
Natural gas markets

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change 19
0

2

4

6

8

10

12

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

AEO 2017

AEO 2018 (preliminary)

2016

Source: Preliminary AEO2018 runs, dated as of 9/19/17

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC 

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

Henry Hub spot prices are lower than AEO 2017, particularly in the mid-term through 

the early 2020s

U.S. dollars (2016) per million British thermal units

20
0

1,000

2,000

3,000

4,000

5,000

6,000

2000 2010 2020 2030 2040 2050

2016

New England

East North Central

South Atlantic

Eastern Canada 0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2000 2010 2020 2030 2040 2050

Mid-Atlantic

East South Central

East North Central

2016

Flows out of Mid-Atlantic 

billion cubic feet per year

Flows into South Atlantic

billion cubic feet per year

Source: Preliminary AEO2018 runs, dated as of 9/19/17

Regional flows, particularly out of the Northeast and into the South Atlantic, reflect the 

continuing reversal of historical trends

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC 

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change 21
0

1

2

3

4

5

2000 2010 2020 2030 2040 2050

AEO 2018 (Preliminary)

AEO 2017

2016

• Preliminary results; data updates 

still needed

• Changes from AEO 2017 include:

– Elba Island (GA, 0.35 Bcf/d) LNG 

export capacity currently under 

construction

– Lower shipping costs (last updated 

2009) to reflect changes in fleet

– Utilization of LNG export capacity 

solved in optimization model

Total U.S. LNG exports

trillion cubic feet per year

Source: Preliminary AEO2018 runs, dated as of 9/19/17

U.S. LNG exports are expected to increase, with capacity being built in Texas and 

Louisiana; capacity utilization will depend on regional supply prices

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC 

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change 22
-1

0

1

2

3

4

5

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

AEO 2018 (Preliminary)

AEO 2017

2016

Imports

Exports

Net Imports

Source: Preliminary AEO2018 runs, dated as of 9/19/17

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC 

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

U.S. imports from Canada continue to decline while U.S. exports into eastern Canada 

rise due to increased pipeline capacity and production in the Marcellus and Utica

U.S. natural gas trade with Canada

trillion cubic feet per year

23
0

2

4

6

8

10

12

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

AEO 2018 (Preliminary)

AEO 2017

2016

Source: Preliminary AEO2018 runs, dated as of 9/2017

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC 

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

U.S. natural gas exports to Mexico continue their growth through the mid-2020s 

because of increasing demand in the electric power sector and decreasing natural gas 

production in Mexico

U.S. natural gas trade with Mexico

trillion cubic feet per year billion cubic feet per day

24

Mexico Consumption

Mexico Supply

U.S. Exports to Mexico
Contacts for liquid fuels markets including biofuels

25 Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

For questions about the Liquid Fuels Market Module contact:

Elizabeth May: elizabeth.may@eia.gov

For questions about the International Energy Module contact:

Adrian Geagla: adrian.geagla@eia.gov

For questions about Biofuels contact:

Steve Hanson: steve.hanson@eia.gov

Liquid Fuels Markets Team Lead: 

James Preciado: james.preciado@eia.gov

Biofuels and Emerging Technologies Team Lead: 

Mindi Farber-DeAnda: mindi.farber-deanda@eia.gov
Contacts for oil and natural gas supply and natural gas markets

26 Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

For questions about Oil & Gas Supply Model and Lower 48 onshore contact:

Dana Van Wagener: dana.vanwagener@eia.gov

For questions about Lower 48 offshore and Alaska contact:

Terry Yen: terry.yen@eia.gov

Exploration and Production Team Lead:

Meg Coleman: meg.coleman@eia.gov

For questions about NGTDM, NGMM design, and comparisons between models:

Joe Benneche: joseph.benneche@eia.gov

For questions pertaining to NGMM, design in AIMMS, suggestions for improvements to new model:

Katie Dyl: kathryn.dyl@eia.gov

Natural Gas Markets Team Lead:

Peter Gross: peter.gross@eia.gov
We welcome feedback on our assumptions and documentation

• Working group meetings http://www.eia.gov/forecasts/aeo/workinggroup/

• The AEO Assumptions report http://www.eia.gov/forecasts/aeo/assumptions/

• NEMS Model Documentation

– Oil and gas supply 

https://www.eia.gov/outlooks/aeo/nems/documentation/ogsm/pdf/m063(2017).pdf

– Natural gas transmission and distribution 

http://www.eia.gov/forecasts/aeo/nems/documentation/ngtdm/pdf/m062(2014).pdf

– LFMM 

https://www.eia.gov/outlooks/aeo/nems/documentation/lfmm/pdf/m059(2014).pdf

• Working papers series http://www.eia.gov/workingpapers/

27 Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC 

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change
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Annual Energy Outlook | www.eia.gov/aeo

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please subscribe at https://www.eia.gov/tools/emailupdates/. 

We have a new central AEO email address: AnnualEnergyOutlook@eia.gov

Office of Petroleum, Natural Gas, and Biofuels Analysis Working Group Presentation for discussion purposes Washington, DC

September 21, 2017 DO NOT QUOTE OR CITE as results are subject to change

For more information

28