Analysis and Projections: US Energy Trends and Market Forecasts
Explore the analysis and projections presented by Adam Sieminski at the Deloitte Energy Conference in June 2016. The data from the U.S. Energy Information Administration (EIA) showcases the rapid increase in natural gas and oil production, global supply-demand balance, WTI oil price expectations, and Henry Hub natural gas price forecasts. Gain insights into the energy market trends and future outlooks shaping the industry landscape.
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EIA Analysis and Projections For Deloitte Energy Conference June 21, 2016 | Washington, DC By Adam Sieminski, Administrator U.S. Energy Information Administration www.eia.gov Independent Statistics & Analysis
Short-Term Energy Outlook Adam Sieminski | Deloitte Energy Conference June 21, 2016 2
The U.S. has experienced a rapid increase in natural gas and oil production from shale and other tight resources U.S. tight oil production million barrels of oil per day U.S. dry shale gas production billion cubic feet per day Sources: EIA derived from state administrative data collected by DrillingInfo Inc. Data are through May 2016 and represent EIA s official tight oil & shale gas estimates, but are not survey data. State abbreviations indicate primary state(s). Note: Scales are presented at approximate barrel of oil equivalent. Adam Sieminski | Deloitte Energy Conference June 21, 2016 3
Global supply has consistently exceeded demand since the start of 2014; EIA forecasts a return to market balance in the second half of 2017 world supply and demand million barrels per day implied stock change million barrels per day 100 6 Forecast Implied stock change and balance (right axis) 98 5 World production (left axis) 96 4 World consumption (left axis) 94 3 92 2 90 1 88 0 86 -1 84 -2 82 -3 2011-Q1 2012-Q1 2013-Q1 2014-Q1 2015-Q1 2016-Q1 2017-Q1 Source: EIA, Short-Term Energy Outlook, June 2016 Adam Sieminski | Deloitte Energy Conference June 21, 2016 4
EIA expects WTI oil prices to remain low compared to recent history, but the market-implied confidence band is very wide WTI price dollars per barrel 120 100 80 60 Historical Spot Price 40 STEO Forecast NYMEX Futures Price 20 Current 95% NYMEX futures price confidence interval 0 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct 2017 2015 2016 2013 2014 Source: EIA, Short-Term Energy Outlook, June 2016 Adam Sieminski | Deloitte Energy Conference June 21, 2016 5
EIA expects Henry Hub natural gas prices to rise to early 2015 levels Henry Hub price dollars per million Btu 7 6 5 4 3 Historical Spot Price STEO Forecast 2 NYMEX Futures Price 1 Current 95% NYMEX futures price confidence interval 0 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct 2017 2015 2016 2013 2014 Source: EIA, Short-Term Energy Outlook, June 2016 Adam Sieminski | Deloitte Energy Conference June 21, 2016 6
Annual Energy Outlook Adam Sieminski | Deloitte Energy Conference June 21, 2016 7
Reference case crude oil prices exceed $130 in 2040 Brent crude oil spot price 2015 dollars per barrel History 2015 Projections 160 120 80 40 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 Source: EIA, Annual Energy Outlook 2016 Reference case Adam Sieminski | Deloitte Energy Conference June 21, 2016 8
Natural gas prices are projected to remain below $5 per million British thermal units through most of the projection period with or without the Clean Power Plan average Henry Hub spot prices for natural gas 2015 dollars per million Btu History 2015 Projections 12 9 No CPP AEO2016 Reference 6 3 0 2005 2010 2015 2020 2025 2030 2035 2040 Source: EIA, Annual Energy Outlook 2016 Adam Sieminski | Deloitte Energy Conference June 21, 2016 9
Clean Power Plan accelerates shift to lower-carbon options for generation, led by growth in renewables and gas-fired generation; results are likely sensitive to CPP implementation approach electricity net generation trillion kilowatthours AEO2016 Reference 1 3 % No CPP 6 History 2040 2040 2015 2015 1993 5 4 34% 38% Natural gas 33% 13% 3 23% 27% Renewables 11% 13% 2 33% 53% Coal 26% 18% 1 19% 20% Petroleum and other liquids 15% Nuclear 16% 1% 1% 4% 1% 0 1990 2000 2010 2020 2030 2040 2020 2030 2040 Source: EIA, Annual Energy Outlook 2016 Adam Sieminski | Deloitte Energy Conference June 21, 2016 10
Electricity prices increase with rising fuel costs and expenditures for electric transmission and distribution infrastructure average retail electricity prices 2015 cents per kilowatthour History 2015 Projections 14 Residential 12 10 Commercial 8 Industrial 6 4 No CPP AEO2016 Reference 2 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 Source: EIA, Annual Energy Outlook 2016 Adam Sieminski | Deloitte Energy Conference June 21, 2016 11
Technology improvements, largely driven by federal standards, help to increase energy efficiency within the end-use sectors Buildings lighting space heating and cooling refrigeration water heating miscellaneous electric loads (MELs) and other end uses Industrial electric motors combined heat and power Transportation light-duty vehicles heavy-duty vehicles Adam Sieminski | Deloitte Energy Conference June 21, 2016 12
International Energy Outlook Adam Sieminski | Deloitte Energy Conference June 21, 2016 13
Renewables grow fastest, coal use plateaus, natural gas surpasses coal by 2030, and oil maintains its leading share world energy consumption quadrillion Btu History 2012 Projections 250 30% Petroleum and other liquid fuels 26% 200 Share of total energy 33% Coal 22% 22% Coal with U.S. CPP 28% 150 Renewables with U.S. CPP 17% 16% Natural gas 23% 100 Renewables 12% 50 6% 4% Nuclear 0 1990 2000 2010 2020 2030 2040 Source: EIA, International Energy Outlook 2016 and EIA, Analysis of the Impacts of the Clean Power Plan (May 2015) Adam Sieminski | Deloitte Energy Conference June 21, 2016 14
As total energy consumption grows, shares by end-use sector remain relatively unchanged world delivered energy consumption by end-use sector quadrillion Btu 625 500 Share of total delivered energy 53% Industrial 375 54% 250 26% Transportation 25% 125 Buildings 21% 20% 0 2012 2020 2025 2030 2035 2040 Source: EIA, International Energy Outlook 2016 Adam Sieminski | Deloitte Energy Conference June 21, 2016 15
Many global issues increase uncertainty Economic growth in key economies (China, Brazil, Russia, among others) Implementation and strength of climate policies Technology improvement rates (both supply and demand) Future of nuclear generating capacity Geopolitical events Adam Sieminski | Deloitte Energy Conference June 21, 2016 16
Continuous improvement highlights at EIA Brent crude used as marker price and revived the International Energy Outlook U.S. Drilling Productivity Report U.S. crude export analysis Monthly solar PV capacity and generation U.S. movements of crude by rail Expanded natural gas production survey; added oil Data browsers, application programming interface, and Excel add-in Adam Sieminski | Deloitte Energy Conference June 21, 2016 17
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 | www.eia.gov/mer Today in Energy | www.eia.gov/todayinenergy Drilling Productivity Report | http://www.eia.gov/petroleum/drilling/ Excel Data Add-In | http://www.eia.gov/opendata/excel/ Adam Sieminski | Deloitte Energy Conference June 21, 2016 18
