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

Assumptions for Annual Energy Outlook 2017: 

Oil and Gas Working Group

AEO2017 Oil and Gas Supply Working Group Meeting

Office of Petroleum, Gas, and Biofuels Analysis

August 25, 2016| Washington, DC

http://www.eia.gov/forecasts/aeo/workinggroup/

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Overview

• “Short” AEO2017 with extension of model projection period to 2050

• World oil prices

• Upstream

– Offshore Gulf of Mexico and Alaska

– Feedback on AEO2016 results

• Natural gas markets

– Feedback on AEO2016 results

• LNG exports

• Pipeline imports/exports

Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

August 25, 2016 DO NOT QUOTE OR CITE as results are subject to change 2
“Short” AEO2017

• In general, restricted to historical data updates and major policy changes

• Can include design updates that help to better represent current events –

none are planned for OGSM and NGTDM

• AEO cases are limited

– Reference price case

– High and low price cases

– High and low economic cases

– High and low resource and technology cases

• Extending projection period to 2050

3 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

August 25, 2016 DO NOT QUOTE OR CITE as results are subject to change
0

50

100

150

200

250

300

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Brent crude oil spot price

2015 dollars per barrel

Crude oil price lower for AEO2017

Source: EIA, Annual Energy Outlook 2017 and Annual Energy Outlook 2016

4 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

August 25, 2016 DO NOT QUOTE OR CITE as results are subject to change

AEO2016

AEO2017preliminary
OGSM / Upstream

5 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

August 25, 2016 DO NOT QUOTE OR CITE as results are subject to change
Oil and Gas Supply – Offshore GOM and Alaska

• Update assumptions for announced discoveries in the GOM

• Preliminary Reference case results for Alaska crude oil production show 

minimum throughput volume of TAPS and minimum oil production revenue 

level reached, causing Alaska crude oil production to shut down in 2037

– Solicit feedback on reasonableness

6 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

August 25, 2016 DO NOT QUOTE OR CITE as results are subject to change
Lower 48 offshore announced discoveries

7 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

August 25, 2016 DO NOT QUOTE OR CITE as results are subject to change

Field name Field 

nickname

Water 

Depth 

(Feet)

Year of 

Discovery

Start Year 

of 

Production

Resource 

size 

(MMBoe)

AC865 GOTCHA 7844 2006 2019 80

DC353 VICKSBURG 7457 2009 2019 325

GB506 BUSHWOOD 2700 2009 2019 65

GC432 SAMURAI 3400 2009 2017 60

GC468 STAMPEDEPONY 3497 2006 2018 372

GC512

STAMPEDEKNOTTY 

HEAD

3557 2005 2018 372

GC903 HEIDELBERG 5271 2009 2016 400

KC102 TIBER 4132 2009 2017 692

KC292 KASKIDA 5894 2006 2020 691

KC736 MOCCASIN 6759 2011 2021 350

KC872 BUCKSKIN 6978 2009 2018 200

KC919 HADRIAN 

NORTH 7000 2010 2020 372

Field 

name

Field nickname

Water 

Depth 

(Feet)

Year of 

Discovery

Start Year 

of 

Production

Resource 

size 

(MMBoe)

LL370 DIAMOND 9975 2008 2018 75

LL400 CHEYENNE EAST 9187 2011 2020 12

MC199 MANDY 2478 2010 2020 20

MC392 APPOMATTOX 7290 2009 2017 325

MC762 DEIMOS SOUTH 3122 2010 2016 75

MC771 KODIAK 5006 2008 2018 182

MC792 WEST BOREAS 3094 2009 2015 182

MC984 VITO 4038 2009 2020 365

SM217 FLATROCK 10 2007 2017 200

MC768 KAIKIAS 4575 2014 2024 100

WR029 BIG FOOT 5235 2006 2018 200

WR052 SHENANDOAH 5750 2009 2017 182

WR508 STONES 9556 2005 2018 250
Lower 48 offshore announced discoveries (cont.)

8 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

August 25, 2016 DO NOT QUOTE OR CITE as results are subject to change

Field 

name

Field nickname

Water 

Depth 

(Feet)

Year of 

Discovery

Start Year 

of 

Production

Resource 

size 

(MMBoe)

WR627 JULIA 7087 2007 2018 600

MC948 GUNFLINT 6138 2008 2016 90

KC093 GILA 4900 2013 2017 692

MC026 AMETHYST 1200 2014 2017 60

MC525 RYDBERG 7500 2014 2019 100

MC431 SON OF BLUTO 2 6461 2012 2017 100

GB959 NORTH PLATTE 4400 2012 2022 693

GC823 PARMER 3821 2012 2022 44

SE039 PHOBOS 8500 2013 2018 100

WR095 YUCATAN NORTH 5860 2013 2020 90

MC126 HORN MOUNTAIN 

DEEP 5400 2015 2017 90

Field 

name

Field nickname

Water 

Depth 

(Feet)

Year of 

Discovery

Start Year 

of 

Production

Resource 

size 

(MMBoe)

GC807 ANCHOR 5183 2015 2025 1392

KC010 GUADALUPE 4000 2014 2024 450

GC040 KATMAI 2100 2014 2024 100

WR160 YETI 5895 2015 2025 175

DC398 GETTYSBURG 5000 2014 2024 100

MC079 OTIS 3800 2014 2018 44

KC642 LEON 1865 2014 2024 357

GC643 HOLSTEIN 

DEEP 4326 2014 2016 250

MC566 FORT SUMTER 7062 2016 2020 125

KC814 SICILY 6716 2015 2020 400

EB954 EW954 560 2015 2016 90

GC726 CAESAR

TONGA 2 5000 - 2016 90
AEO2016 Reference case

9 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

August 25, 2016 DO NOT QUOTE OR CITE as results are subject to change
0

2

4

6

8

10

12

2000 2005 2010 2015 2020 2025 2030 2035 2040

U.S. crude oil production

million barrels per day

U.S. crude oil production rises above previous historical high before 

2030

Source: EIA, Annual Energy Outlook 2016

10 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

August 25, 2016 DO NOT QUOTE OR CITE as results are subject to change

Tight oil

Alaska

Lower 48 offshore

U.S. historical high production

level of 9.6 million barrels

per day in 1970

Other lower 48 onshore

History Projections
0

1

2

3

4

5

6

7

8

2000 2005 2010 2015 2020 2025 2030 2035 2040

 Other

 Wolfcamp

 Monterey

 Avalon/Bone Springs

 Niobrara

 Spraberry

 Austin Chalk

 Woodford

 Eagle Ford

 Bakken

Crude oil production

million barrels per day

Projected crude oil production from tight oil plays in Reference case

Source: EIA, Annual Energy Outlook 2016

11 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

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History Projections
0

20

40

60

80

100

120

0

5

10

15

20

25

30

35

40

45

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

U.S. dry natural gas production

trillion cubic feet billion cubic feet per day

Shale resources remain the dominant source of U.S. natural gas 

production growth

Source: EIA, Annual Energy Outlook 2016

12 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

August 25, 2016 DO NOT QUOTE OR CITE as results are subject to change

Tight gas

Coalbed methane

Other lower 48

onshore

Shale gas and

tight oil plays

Lower 48 offshore Alaska

History Projections
0

5

10

15

20

25

30

2000 2005 2010 2015 2020 2025 2030 2035 2040

 Bakken

 Utica

 Marcellus

 Antrim

 Eagle Ford

 Woodford

 Fayetteville

 Haynesville/Bossier

 Barnett

Natural gas production

trillion cubic feet

Shale gas production by play

Source: EIA, Annual Energy Outlook 2016

13 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

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History Projections
0

5

10

15

20

25

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

U.S. liquid fuels supply

million barrels per day

Combination of increased tight oil production and higher fuel 

efficiency drives projected decline in oil imports

Note: “Other” includes refinery gain, biofuels production, all stock withdrawals, and other domestic sources of liquid fuels

Source: EIA, Annual Energy Outlook 2016

14 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

August 25, 2016 DO NOT QUOTE OR CITE as results are subject to change

Projections

Natural gas

plant liquids

Other crude oil production

(excluding tight oil starting in 2000)

Net petroleum and other liquids

imports

Other

Tight oil

25% production

19%

23%

12%

21%

7%

21%

12%

25%

35%

History
0

3

6

9

12

2005 2010 2015 2020 2025 2030 2035 2040

average Henry Hub spot prices for natural gas

2015 dollars per million Btu

Natural gas prices are projected to remain below $5/MMBbtu through 

most of the projection period

Source: EIA, Annual Energy Outlook 2016

15 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

August 25, 2016 DO NOT QUOTE OR CITE as results are subject to change

History Projections

AEO2016 Reference
0

5

10

15

20

25

30

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

energy spot prices

2015 dollars per million Btu

Difference between U.S. natural gas and crude oil prices grows 

through 2040

Source: EIA, Annual Energy Outlook 2016

16 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

August 25, 2016 DO NOT QUOTE OR CITE as results are subject to change

History Projections

Henry Hub spot price

Brent crude oil spot price

2016

Ratio: 3.5

Ratio: 2.5

Ratio:

4.9

2012

Oil to gas price ratio: 7.1
Natural Gas Markets

17 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

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0

10

20

30

40

50

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

U.S. energy production and consumption

quadrillion Btu

U.S. natural gas production exceeds consumption, making the United 

States a net natural gas exporter in the very near future

Source: EIA, Annual Energy Outlook 2016

18 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

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Consumption

Domestic supply

History Projections
0

2

4

6

8

10

12

14

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Dry natural gas

Trillion cubic feet per year

Natural gas consumption by sector, 1990-2040

* Includes lease and plant fuel, and natural gas-to-liquids heat, power, and production ** Includes pipeline fuel

Source: EIA, Annual Energy Outlook 2016

19 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

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History Projections

Residential

Commercial

Industrial*

Electric generators

Transportation**
0

500

1,000

1,500

2,000

2,500

2005 2010 2015 2020 2025 2030 2035 2040

electric generation by fuel 

billion kwh

Net electricity generation by fuel

Source: EIA, Annual Energy Outlook 2016

20 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

August 25, 2016 DO NOT QUOTE OR CITE as results are subject to change

natural gas

coal

renewables
0

2

4

6

8

10

12

14

16

18

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Natural Gas End-User Prices 

2015 dollars per thousand cubic feet

Natural Gas End-User Prices, 1990-2040

Source: EIA, Annual Energy Outlook 2016

21 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

August 25, 2016 DO NOT QUOTE OR CITE as results are subject to change

History Projections

Residential

Industrial

Electric generators
-8

-6

-4

-2

0

2

4

6

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Canada

Mexico

LNG

Dry natural gas

Trillion cubic feet per year

Net U.S. imports by source, 1990-2040

Source: EIA, Annual Energy Outlook 2016

22 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

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History Projections
0

1000

2000

3000

4000

5000

6000

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Consumption

Production

Dry natural gas

Billion cubic feet per year

Mexico consumption and production

Source: EIA, Annual Energy Outlook 2016

23 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

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History Projections
0

1000

2000

3000

4000

5000

6000

7000

2005 2010 2015 2020 2025 2030 2035 2040

Consumption

Production

LNG Exports

Dry natural gas

Billion cubic feet per year

Canada consumption and production

Source: EIA, Annual Energy Outlook 2016

24 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

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History Projections
0

5

10

15

20

25

30

35

2005 2010 2015 2020 2025 2030 2035 2040

LNG exports

Low oil price

High 

resource

Low resource

0

2

4

6

8

10

12

2005 2010 2015 2020 2025 2030 2035 2040

Henry Hub price

Low oil price

High resource

Low resource

High oil price

LNG exports vary significantly across cases in response to 

world oil prices and oil and gas resource assumptions

25 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

August 25, 2016 DO NOT QUOTE OR CITE as results are subject to change

Bcf/d 2015$/MMBtu

Reference

Reference

High oil price
We welcome feedback on our assumptions and documentation

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

• NEMS Model Documentation

– Oil and gas supply 

http://www.eia.gov/forecasts/aeo/nems/documentation/ogsm/pdf/m063(2014).pdf

– Natural gas transmission and distribution 

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

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

• And these working group meetings 

http://www.eia.gov/forecasts/aeo/workinggroup/

26 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

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Contacts

27 Office of Petroleum, Gas, and Biofuels Analysis Working Group Presentation for Discussion Purposes Washington, DC, 

August 25, 2016 DO NOT QUOTE OR CITE as results are subject to change

John Staub: john.staub@eia.gov

Mindi Farber-DeAnda: mindi.farber-deanda@eia.gov

Dana Van Wagener: dana.vanwagener@eia.gov

Joe Benneche: joseph.benneche@eia.gov

Terry Yen: terry.yen@eia.gov

Next Working Group Meeting

Tentatively planned for late September 2016.

Will present preliminary results for AEO2017.