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

International energy markets

For

Cheung Kong Graduate School of Business

July 29, 2015 | Beijing, China

by

Adam Sieminski, Administrator

U.S. Energy Information Administration


July 29, 2015 2

Mandate: EIA collects, analyzes, and disseminates independent and impartial

energy information to promote sound policymaking, efficient markets, and public

understanding of energy and its interaction with the economy and the environment

Independence: EIA, an element of the Department of Energy, is one of 14 federal

statistical agencies; by law, its data, analyses, and forecasts are independent of

approval by any other officer or employee of the United States Government

Mission: EIA provides data and analysis to help stakeholders understand the

rapidly changing energy sector in areas such as:

• Oil and gas production

• Changing energy trade flows

• Oil price volatility and projections

• Vehicle, building, and manufacturing consumption trends

• Distributed renewables generation

• Coal and nuclear power outlooks

EIA principles


July 29, 2015 3

• Provide relevant energy statistics and analysis as a public

good

• Be accurate and objective

• Protect the confidentiality of respondents

• Maintain the public trust

EIA information is used by a range of stakeholders


July 29, 2015 4

Government

• Executive Agencies – WH, DOE, & EPA use EIA data to track

energy markets and program performance and to analyze

policy proposals

• Congress – policy development and agency funding

• State Governments – planning and program development

Energy Sector

• Consumers – monitor price forecasts

• Producers – track inventory statistics

Business/Industry

• Manufacturers – market research

Finance/Consulting

• Commodities Analysts – market response to supply data

Media/Education

• Journalists – cite energy statistics

• Teachers – use Energy Kids materials

• Researchers – energy forecasting and modeling

Private Citizens

• Public – research gasoline prices

Customer-focused Performance Results

• Quality: 95% of customers are satisfied or very satisfied with the quality of EIA information

• Timeliness: 96% of selected EIA recurring products meet their release date target

Examples of Activities

Media 2%

Government 9%

Education 12%

Private Citizen

16%

Finance/ Consulting

18%

Energy Sector 21%

Business/ Industry

22%

EIA Customers

Source: 2014 EIA Web Customer Survey

The importance of China in the global

energy markets


July 29, 2015 5

By 2040, China’s energy use will be double the U.S. level;

India’s a little more than half despite its faster GDP growth

6

energy consumption by selected country

quadrillion Btu

Source: EIA, International Energy Outlook 2013

0

50

100

150

200

250

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

China

United States

India

History Projections 2010


July 29, 2015

Net oil imports: Trends in the largest consuming countries

7

million barrels per day (MMb/d)

Source: EIA, Short-Term Energy Outlook, July 2015

0

1

2

3

4

5

6

7

8

9

10

2011 2012 2013 2014 2015 2016

China net imports

U.S. net imports

Forecast History


July 29, 2015

Current oil and gas markets


July 29, 2015 8

For oil prices, the market-implied confidence band is very wide

9

WTI price

dollars per barrel


0

25

50

75

100

125

150

Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct

Historical Spot Price

STEO Forecast

NYMEX Futures Price

Current 95% NYMEX futures price confidence interval

June 2014 95% NYMEX futures price confidence interval

2013 2014 2015 2016


July 29, 2015

The U.S. has experienced a rapid increase in natural gas and oil

production from shale and other tight resources

10

Sources: EIA derived from state administrative data collected by DrillingInfo Inc. Data are through May 2015 and represent

EIA’s official tight oil & shale gas estimates, but are not survey data. State abbreviations indicate primary state(s).


July 29, 2015

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0Eagle Ford (TX)

Bakken (MT & ND)

Spraberry (TX & NM Permian)

Bonespring (TX & NM Permian)

Wolfcamp (TX & NM Permian)

Delaware (TX & NM Permian)

Yeso-Glorieta (TX & NM Permian)

Niobrara-Codell (CO, WY)

Haynesville

Utica (OH, PA & WV)

Marcellus

Woodford (OK)

Granite Wash (OK & TX)

Austin Chalk (LA & TX)

Monterey (CA)

U.S. tight oil production

million barrels of oil per day

0

5

10

15

20

25

30

35

40

45Marcellus (PA & WV)

Haynesville (LA & TX)

Eagle Ford (TX)

Fayetteville (AR)

Barnett (TX)

Woodford (OK)

Bakken (ND)

Antrim (MI, IN, & OH)

Utica (OH, PA & WV)

Rest of US 'shale'

U.S. dry shale gas production

billion cubic feet per day

Production growth in top crude producing regions (Permian,

Bakken, Niobrara, and Eagle Ford) reverses in early 2015

11

monthly percent change

three month rolling average

Source: EIA, Drilling Productivity Report, July 2015


July 29, 2015

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

Jan 2012 Jan 2013 Jan 2014 Jan 2015

Oil supply and demand begin to rebalance in 2016

12

million barrels per day (MMb/d) MMb/d



July 29, 2015

-3

-2

-1

0

1

2

3

4

5

6

78

80

82

84

86

88

90

92

94

96

98

2010-Q1 2011-Q1 2012-Q1 2013-Q1 2014-Q1 2015-Q1 2016-Q1

Implied stock change and balance (right axis)

World production (left axis)

World consumption (left axis)

Surprises in liquid fuel demand to the upside are rare

13

world liquid fuels consumption



annual change

million barrels per day

Forecast

-2

-1

0

1

2

3

4

5

6

7

8

76

78

80

82

84

86

88

90

92

94

96

2008 2009 2010 2011 2012 2013 2014 2015 2016

Change in U.S. consumption (right axis)

Change in China consumption (right axis)

Change in other consumption (right axis)

Total world consumption (left axis)


July 29, 2015

OPEC surplus crude oil production capacity remains moderate

to low

14




July 29, 2015

0

1

2

3

4

5

6

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Forecast

Note: Shaded area represents 2004-2014 average (2.2 MMb/d)

OECD commercial petroleum stocks remain high

15

days of supply



July 29, 2015

Forecast

45

50

55

60

65

70

Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016

Note: Shaded area represents the range between the minimum

and maximum from Jan 2010 to Dec 2014

Long-term U.S. energy projections


July 29, 2015 16

Reductions in energy intensity largely offset impact of GDP

growth, leading to slow projected growth in energy use

17

0

20

40

60

80

100

120

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

U.S. primary energy consumption

quadrillion Btu

Source: EIA, Annual Energy Outlook 2015, Reference case


36%

18%

27%

8%

8%

1%

33%

10%

18%

29%

8%

1% Nuclear

Petroleum and other liquids

Natural gas

Coal

Renewables (excluding liquid biofuels)

2025

35%

19%

27%

8%

9%

1% Liquid biofuels

2040


July 29, 2015

U.S. crude oil production: Supply rises above previous historical highs

before 2020 in all AEO2015 cases, with a range of longer-term outcomes

dependent on prices, resources and technology

18

U.S. crude oil production


Source: EIA, Annual Energy Outlook 2015

0

5

10

15

20

1990 2000 2010 2020 2030 2040 2020 2030 2040 2020 2030 2040

Tight oil

Alaska

Lower 48 offshore

History 2013 2013 2013

U.S. maximum production level of

9.6 million barrels per day in 1970

Other lower 48 onshore

Reference High Oil and Gas

Resource Low Oil Price


July 29, 2015

U.S. natural gas imports and exports

trillion cubic feet

-8

-4

0

4

8

12

16

2000 2010 2020 2030 2040 2020 2030 2040 2020 2030 2040

LNG imports

19

billion cubic feet per day

Projections History 2013

-10

0

10

20

2013 2013

30

40

-20 Reference Low Oil Price High Oil and Gas

Resource

Pipeline exports

to Mexico

Lower 48 states

LNG exports

Pipeline exports to Canada Pipeline imports from Canada

Alaska LNG exports


July 29, 2015

U.S. natural gas trade: Projected U.S. natural gas trade reflects the spread

between domestic natural gas prices and world energy prices, along with

resource outcomes

Source: EIA, Annual Energy Outlook 2015

U.S. energy trade

20

• Net exporter of petroleum products since 2010

• Crude oil export policy debate underway

• Net exporter of natural gas by 2017

• Net exports of coal are small and steady

• Net imports of electricity are small


July 29, 2015

Source: EIA, Annual Energy Outlook 2015, Reference case

Long-term international outlook


July 29, 2015 21

Renewable energy and nuclear power are the fastest growing

source of energy consumption

22

world energy consumption by fuel

quadrillion Btu

Source: EIA, International Energy Outlook 2013

0

50

100

150

200

250

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

liquids

(including biofuels)

renewables

(excluding biofuels)

natural gas

coal

nuclear


34%

28%

22%

11%

5%

28%

27%

23%

7%

15%

share of

world total


July 29, 2015

Non-OPEC petroleum and other liquids production

23


Source: EIA, International Energy Outlook 2013, Reference case

Russia

United States

China

Brazil

rest of non-OECD


July 29, 2015

0

10

20

30

40

50

60

70

2010 2015 2020 2025 2030 2035 2040

Canada

rest of OECD

World natural gas production

24

trillion cubic feet

MENA

Russia

rest of OECD

Canada

United States

0

20

40

60

80

100

120

140

160

180

200

2010 2015 2020 2025 2030 2035 2040

China

rest of non-OECD

Note: The MENA region consists of the Middle East and North Africa countries



July 29, 2015

World coal production

25

billion short tons

Note: Indonesia accounted for 72 percent of the total coal production in Other non-OECD Asia in 2010, rising from 52

percent in 2000. Throughout the projection period, Indonesia continues dominating the region's coal production.


0

2

4

6

8

10

12

14

2010 2015 2020 2025 2030 2035 2040

other non-OECD Asia Australia

United States

China

world total

India


July 29, 2015

World net hydropower and other renewable electricity generation

26

trillion killowatthours


China

rest of OECD

Canada

United States 0

2

4

6

8

10

12

2010 2015 2020 2025 2030 2035 2040

Brazil

India

rest of non-OECD


July 29, 2015

World net nuclear electricity generation

27

trillion killowatthours


Russia

OECD Europe

other Asia

Japan

United States

0

1

2

3

4

5

6

2010 2015 2020 2025 2030 2035 2040

India

rest of world

China


July 29, 2015

For more information

28

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 Profiles | www.eia.gov/state

Drilling Productivity Report | www.eia.gov/petroleum/drilling/

International Energy Portal | www.eia.gov/beta/international/?src=home-b1


July 29, 2015

http://www.eia.gov/

http://www.eia.gov/aeo

http://www.eia.gov/steo

http://www.eia.gov/ieo

http://www.eia.gov/mer

http://www.eia.gov/todayinenergy

http://www.eia.gov/state

http://www.eia.gov/petroleum/drilling/

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