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

Annual Energy Outlook 2014

Preliminary Reference Case Results for Oil and Natural Gas

AEO2014 Oil and Gas Supply Working Group Meeting

Office of Petroleum, Gas, and Biofuels Analysis

September 26, 2013 | Washington, DC

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE

AEO2014P uses ref2014.d092413a

AEO2013 uses ref2013.d102312a
Changes for AEO2014

2

• Revised shale & tight play resources (EURs, type curves)

• Updated classification of shale gas, tight gas, & tight oil 

reservoirs

• Updated offshore announced discoveries

• Updated assumptions for Canada 

• Estimated world natural gas prices in order to endogenously 

model LNG exports

• Updated methodology for calculating the Henry Hub price

• Updated historical data and related parameters

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change
Range of oil price paths is slightly more narrow than in AEO2014

3

0

50

100

150

200

250

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

Annual average spot price of Brent crude oil

2012 dollars per barrel

Source: EIA, Annual Energy Outlook 2013, and draft AEO2014 prices

History Projections

2012

High Oil Price

Low Oil Price

Reference

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change

Sept STEO

 AEO2014P

--- AEO2013
Consumption

Production

0

5

10

15

20

25

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

U.S. reliance on imported liquid fuels is reduced by increased 

domestic production and greater fuel efficiency

4

Source: Preliminary AEO2014 runs, dated as of 09/24/2013

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change

2005 2012

million barrels per day

61%

Peak

40% 37% Net Imports

History Projections
Buildings

Industrial

Transportation

0

2

4

6

8

10

12

14

16

2000 2005 2010 2015 2020 2025 2030 2035 2040

Liquid fuels consumption by sector, 1990-2040

million barrels per day

5

2012

History Projections

Electricity Generators

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change

Source: Preliminary AEO2014 runs, dated as of 09/24/2013
Lower 48 unproved tight oil resources (million bbls)

6

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change

Source: Preliminary AEO2014 runs, dated as of 09/24/2013

Region Basin Play

TRR (mmb) Wells Needed to Develop TRR

Oil Condensates Total Oil Condensates Total

1 Appalachian Marcellus 43 43 69,431 69,431 

Utica 965 - 965 48,668 48,668 

2 West Gulf

Austin Chalk 7,313 7,313 87,173 87,173 

Cotton 

Valley/Bossier 795 795 87,593 87,593 

Eagle Ford 3,274 6,039 9,313 32,509 34,449 66,958 

Vicksburg 43 43 2,634 2,634 

Wilcox/Lobo - - 7,178 7,178 

3 Anadarko Woodford 90 97 187 2,751 11,974 14,725 

Granite Wash/Atoka 564 564 14,663 14,663 

4 Permian

Abo/Canyon 1,088 1,088 49,440 49,440 

Avalon/Bonespring 3,322 3,322 49,031 49,031 

Barnett 22 22 12,828 12,828 

Spraberry 8,083 8,083 75,177 75,177 

Wolfcamp 1,983 1,983 24,882 24,882 

5

Denver

Bakken

 1,441 1,441 39,179 39,179 

Greater Green River - - 31,141 31,141 

Montana Thrust Belt 602 602 5,433 5,433 

Powder River 2,417 2,417 63,488 63,488 

San Juan 19 19 27,076 27,076 

Southwestern 

Wyoming 1,972 1,972 17,691 17,691 

Uinta/Piceance 68 - 68 1,367 12,344 13,711 

Williston 8,449 8,449 70,709 70,709 

6 San Joaquin/Los 

Angeles Monterey/Santos 555 555 1,229 1,229 

 40,532 8,710 49,242 470,619 409,419 880,038 
0

1

2

3

4

5

6

7

8

9

10

2000 2005 2010 2015 2020 2025 2030 2035 2040

Domestic crude oil production by source, 1990-2040

7

U.S. crude oil production

million barrels per day

Source: EIA, Annual Energy Outlook 2013, and AEO2014 Preliminary run 09/24/2013

History Projections

2012

Lower 48 offshore

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change

Alaska

Lower 48 onshore

Total
0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2005 2010 2015 2020 2025 2030 2035 2040

Lower 48 onshore oil production, 2005-2040

8

million barrels per day

Onshore Other + Tight Oil + Other EOR

CO2 EOR

History Projections

2012

Source: Preliminary AEO2014 runs, dated as of 09/24/2013 

Note: Sum of two sets of lines equals L48 onshore total

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change

 AEO2014P

--- AEO2013
9

Tight oil production estimates

Source tight oil: HPDI, Texas RRC, North Dakota department of mineral resources, and EIA, through April 2013. 

million barrels per day

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2000 2002 2004 2006 2008 2010 2012

GLORIETA

YESO

WOODFORD

WOLFCAMP

SPRABERRY

NIOBRARA_CODELL

MONTEREY

GRANITEWASH

EAGLEFORD

BONESPRING

BARNETT

BAKKEN

AUSTINCHALK
0

1

2

3

4

5

2010 2015 2020 2025 2030 2035 2040

 Other (i.e. condensates)

 Wolfcamp

 Monterey

 Avalon/Bone Springs

 Niobrara

 Spraberry

 Austin Chalk

 Woodford

 Eagle Ford

 Bakken

Projected crude oil production from tight oil plays in AEO 2014

10

million barrels per day

Source: Preliminary AEO2014 runs, dated as of 09/24/2013

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change

2012

History Projections
Office of Petroleum, Gas, and Biofuels Analysis Working Group Oil Presentation for Discussion Purposes 

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change 11

Lower 48 unproved shale gas resources

Region Basin Play AEO2014P

(billion cubic feet)

AEO2013

(billion cubic feet)

Northeast

Appalachian

Marcellus 132,739 148,409

Devonian 8,283 27,395

Utica 37,355 37,257

Illinois Northwestern Ohio 2,620 2,641

New Albany 11,680 10,909

Michigan Antrim 15,316 12,586

Gulf Coast

TX-LA-MS Salt Haynesville 70,850 74,661

Western Gulf Coast Eagle Ford 53,377 55,040

Pearsall 7,821 8,652

Black Warrior Floyd-Neal/Conasauga 4,263 4,922

Midcontinent Arkoma

Fayetteville – Central 14,619 11,075

Fayetteville – West 5,207 4,517

Woodford – Western Arkoma 6,732 15,043

Caney 1,053 1,132

Chattanooga 1,585 1,620

Anadarko Woodford - Central 8,921 19,168

Southwest Ft. Worth Barnett 20,274 29,454

Permian Barnett-Woodford 15,834 28,259

Rocky 

Mountain

Greater Green River Hilliard-Baxter-Mancos 10,491 13,302

San Juan Lewis 9,772 9,778

Uinta Mancos 10,865 11,288

Williston Gammon 3,376 3,491

Source: Preliminary AEO2014 runs, dated as of 09/24/2013
0

2

4

6

8

10

12

14

16

2000 2005 2010 2015 2020 2025 2030 2035 2040

 Bakken

 Marcellus

 Antrim

 Eagle Ford

 Woodford

 Fayetteville

 Haynesville/Bossier

 Barnett

Shale gas production by play

12

trillion cubic feet

Source: Preliminary AEO2014 runs, dated as of 09/24/2013

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change

2012

History Projections
Natural Gas Markets

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change 13
Natural gas consumption, production, and trade, 1990-2040

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change 14

trillion cubic feet

Source: Preliminary AEO2014 runs, dated as of 09/24/2013

0

5

10

15

20

25

30

35

40

45

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

History Projections

Consumption

Production

Net Imports 

Net Exports 

 AEO2014P

--- AEO2013

2012
Net U.S. imports by source, 1990-2040

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change 15

trillion cubic feet

Source: Preliminary AEO2014 runs, dated as of 09/24/2013

-5

-4

-3

-2

-1

0

1

2

3

4

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

History Projections

Canada

LNG

Mexico AEO2014P

--- AEO2013

2012
LNG Exports, 2015-2040: All LNG Exports from North 

America are destined for the Asian market

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change 16

billion cubic feet per day

Source: AEO2013 compared with the preliminary AEO2014 runs, dated as of 9/24/2013

Western 

Canada

Alaska

Gulf

0

2

4

6

8

10

12

14

16

2015 2020 2025 2030 2035 2040

Atlantic

0

2

4

6

8

10

12

14

16

2015 2020 2025 2030 2035 2040

AEO2013 AEO2014P

billion cubic feet per day
Henry Hub Natural Gas Spot Prices, 1995-2040

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change 17

2012 dollars per million Btu

* CERA: August 2012, IHS CERA North American Natural Gas Outlook Data Tables

Source: Preliminary AEO2014 runs, dated as of 09/24/2013

0

2

4

6

8

10

12

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

History Projections

STEO - 9/2013

 AEO2014P

--- AEO2013

2012
Henry Hub Natural Gas Spot Prices, 1995-2040

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change 18

2012 dollars per million Btu

* CERA: August 2012, IHS CERA North American Natural Gas Outlook Data Tables

Source: Preliminary AEO2014 runs, dated as of 09/24/2013

0

2

4

6

8

10

12

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

History Projections

CERA HH price*

STEO - 9/2013

 AEO2014P

--- AEO2013

NYMEX future gas price

as of 9/05/2013

2012
Natural Gas End-User Prices, 1970-2040

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change 19

2012 dollars per thousand cubic feet

Source: Preliminary AEO2014 runs, dated as of 09/24/2013

0

2

4

6

8

10

12

14

16

18

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Residential

Industrial

Electric Utility

History Projections

 AEO2014P

--- AEO2013

2012
Natural gas consumption by sector, 1990-2040

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change 20

trillion cubic feet

Source: Preliminary AEO2014 runs, dated as of 09/24/2013

0

2

4

6

8

10

12

14

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Industrial*

Electric Power

Residential

Commercial

Transportation**

History Projections

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

** Includes pipeline fuel

 AEO2014P

--- AEO2013
NGTDM AEO2014 model enhancements 

(network flows and pricing)

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change 21

• Allow reverse direction flows out of Middle Atlantic

• Move gas based on variable pipeline rates, not fixed plus 

variable rates

• Set variable pipeline rates based on historical basis 

differentials, not regulated rates

• Benchmark regional hub prices to historical spot prices

• Set electric prices based on markup off of regional spot price, 

not citygate

• Update residential/commercial distributor tariffs
NGTDM AEO2014 model enhancements 

(imports and exports)

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change 22

• Update equations/parameters for Canada and Mexico 

supply/demand

• Set majority of exports to Canada endogenously

• Set LNG exports out of Canada exogenously

• Allow three LNG export trains to be built in North America 

each year

• Allow less than 100% utilization of liquefaction capacity 

based on economics
For more information

23

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 | www.eia.gov/mer

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.

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change
Changes in release cycles for EIA’s AEO and IEO

24

• To focus more resources on rapidly 

changing energy markets and how 

they might evolve over the next few 

years, the U.S. Energy Information 

Administration is revising the 

schedule and approach for 

production of the International 

Energy Outlook (IEO) and the 

Annual Energy Outlook (AEO).

• Starting with IEO2013, which was 

released in July, 2013, EIA adopted 

a two-year production cycle for 

both the IEO and AEO.

• Under this approach, a full edition 

of the IEO and AEO will be 

produced in alternating years and 

an interim, shorter edition of each 

will be completed in the “off” years.

2014 2015

International 

Energy 

Outlook

Interim Edition will be 

released in mid 2014, focusing 

on the liquids projection, which 

is used as part of the AEO2014. 

Summary tables and a short 

analysis will be included. 

Full Edition will be released 

in the spring 2015

Annual 

Energy 

Outlook

Full Edition will be released 

in spring 2014, including 

analysis of energy issues and 

many alternative scenarios. 

Interim Edition will be 

released in late 2014 or early 

2015 and will only include the 

Reference, Low and High 

Economic Growth, and Low 

and High Oil Price cases. The 

shorter version will include 

tables for these cases and 

short discussions. 

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

Washington, DC, September 26, 2013 DO NOT QUOTE OR CITE as results are subject to change