U.S. Energy Information Administration Independent Statistics & Analysis Outlook for shale gas and tight oil development in the U.S. For Joint Forum on US Shale Gas & Pacific Gas Markets May 14, 2013 | New York, NY By Adam Sieminski, Administrator

U.S. Shale Gas 2 Adam Sieminski, May 14, 2013

Domestic production of shale gas has grown dramatically over the past few years Adam Sieminski, May 14, shale gas production (dry) billion cubic feet per day Sources: LCI Energy Insight gross withdrawal estimates as of March 2013 and converted to dry production estimates with EIA-calculated average gross-to-dry shrinkage factors by state and/or shale play.

Shale gas leads growth in total gas production through 2040 to reach half of U.S. output 4 U.S. dry natural gas production trillion cubic feet Source: EIA, Annual Energy Outlook 2013 Associated with oil Coalbed methane Tight gas Shale gas Alaska Non-associated onshore Non-associated offshore ProjectionsHistory 2011 Adam Sieminski, May 14, 2013

5 U.S. dry gas consumption trillion cubic feet Source: EIA, Annual Energy Outlook 2013 ProjectionsHistory Industrial Electric power Commercial Residential Transportation 33% 14% 6% 32% 12% 33% 19% 3% 31% 13% *Includes combined heat-and-power and lease and plant fuel. **Includes pipeline fuel. Gas to liquids 2% Natural gas consumption is quite dispersed with electric power, industrial, and transportation use driving future demand growth Adam Sieminski, May 14, 2013

Domestic natural gas production grows faster than consumption and the U.S. becomes a net exporter of natural gas around U.S. dry gas trillion cubic feet Source: EIA, Annual Energy Outlook 2013 ProjectionsHistory 2011 Consumption Domestic supply Net imports Adam Sieminski, May 14, 2013

7 U.S. natural gas imports and exports Source: EIA, Annual Energy Outlook 2013 trillion cubic feet Reference case High resource case Exports to Mexico Exports to Canada Lower 48 states LNG exports Alaska LNG exports Imports from Canada LNG imports

Uncertainties that could slow global growth of shale gas and tight oil Adam Sieminski, May 14, Resource quantities and distribution Surface vs. mineral rights Risk appetite of industry participants Infrastructure and technology Environmental constraints

U.S. Tight Oil 9 Adam Sieminski, May 14, 2013

Domestic production of tight oil has grown dramatically over the past few years 10 tight oil production for select plays million barrels per day Source: Drilling Info (formerly HPDI), Texas RRC, North Dakota department of mineral resources, and EIA, through December 2012 Adam Sieminski, May 14, 2013

11 U.S. tight oil production leads growth in domestic production Source: EIA, Annual Energy Outlook 2013 and Short-Term Energy Outlook, May 2013 million barrels per day ProjectionsHistory 2011 Alaska Tight oil Other lower 48 states onshore Lower 48 states offshore STEO May 2013 U.S. crude oil projection ProjectionsHistory 2011 Alaska Tight oil Other lower 48 states onshore Lower 48 states offshore Reference caseHigh resource case

U.S. dependence on imported liquids depends on both supply and demand 12 U.S. liquid fuel supply million barrels per day Source: EIA, Annual Energy Outlook 2013 and Short-Term Energy Outlook, April 2013 Consumption Domestic supply Net imports 37% ProjectionsHistory Adam Sieminski, May 14, 2013 Petroleum Exports -8% 32% STEO forecast for % 2012

Thomas Fanning Chairman, President and CEO Southern Company Aldo Flores-Quiroga Secretary General International Energy Forum Hans Rosling Chairman Gapminder Keynote Speakers

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