U.S. Energy Information Administration Independent Statistics & Analysis Prospects for U.S. Oil & Natural Gas for The Aspen Institute: Global Energy Forum July 20, 2012| Aspen, CO by Adam Sieminski, Administrator

Primary energy use by fuel, …in absolute terms, all fuels grow except petroleum liquids 1 U.S. energy consumption quadrillion Btu Source: EIA, Annual Energy Outlook 2012 ProjectionsHistory 2010 Renewables (excluding biofuels) Liquid biofuels Petroleum and other liquids Coal Nuclear Natural gas 21% 37% 9% 25% 7% 1% 20% 32% 9% 26% 11% 4% Share of total U.S. energy use Adam Sieminski July 20, 2012

U.S. shale gas production comprised over 30 percent of total U.S. dry production in 2011 Adam Sieminski July 20, shale gas production (dry) billion cubic feet per day Sources: Lippman Consulting, Inc. gross withdrawal estimates as of May 2012 and converted to dry production estimates with EIA-calculated average gross-to-dry shrinkage factors by state and/or shale play.

Shale gas grows from under a quarter to about half of U.S. gas production from U.S. dry natural gas production trillion cubic feet Source: EIA, Annual Energy Outlook 2012 Lower 48 offshore ProjectionsHistory Coalbed methane Lower 48 onshore conventional Shale gas 2010 Alaska Tight gas Adam Sieminski July 20, % 12% 6% 10% 22% 49%

U.S. production of shale gas in four cases, dry natural gas production trillion cubic feet Source: EIA, Annual Energy Outlook 2012 Adam Sieminski July 20, 2012 High EUR Reference Low EUR High TRR 2010 HistoryProjections Technically Recoverable Resource (TRR) Estimated Ultimate Recovery (EUR)

Adam Sieminski July 20, Lower 48 oil and gas shale plays and federal lands Source: EIA

6 U.S. dry natural gas trillion cubic feet Source: EIA, Annual Energy Outlook 2012 ProjectionsHistory 2010 Consumption Domestic production Adam Sieminski July 20, 2012 U.S. becomes a net natural gas exporter in % 11% Net imports, 2010 Net exports, 2035

U.S. natural gas spot prices are very low compared to prices in other regions and oil prices Adam Sieminski July 20, 2012 Sources: EIA, Bloomberg, as of July 17, global spot natural gas and crude oil prices U.S. dollars per million British thermal unit

Non-hydro renewable sources grow nearly three-fold by 2035; growth climbs nearly five-fold with a price on CO 2 8 non-hydropower renewable generation billion kilowatthours Source: EIA, Annual Energy Outlook Wind Biomass Geothermal Solar Municipal waste Coal Cost Gas Price Economic Growth Coal Cost Gas Price Economic Growth Adam Sieminski July 20, 2012

Energy-related CO 2 emissions % change from %-4.0% Energy-related CO 2 emissions never get back to pre-recession levels in the AEO2012 Reference case 9 energy carbon dioxide emissions billion metric tons Source: EIA, Annual Energy Outlook 2012 ProjectionsHistory Adam Sieminski July 20, 2012

U.S. natural gas prices separate from crude oil price equivalency 10 spot market prices 2010 dollars per million Btu Source: EIA, Bloomberg Crude oil (West Texas Intermediate) Natural gas (Henry Hub) Adam Sieminski July 20, 2012

Non-OECD liquid fuels use is expected to surpasses almost flat OECD liquid fuels use in the near future total liquids consumption million barrels per day Source: EIA, Annual Energy Outlook 2012 Projections History 2010 Other non-OECD OECD Americas OECD % 19% 35% 41 Non-OECD Adam Sieminski July 20, 2012

Tight oil production for selected plays approaches 900,000 barrels per day in March 2012 Adam Sieminski July 20, thousand barrels of oil per day Source: HPDI, Texas RRC, North Dakota department of mineral resources, and EIA, through March, 2012.

U.S. leads the league table for non-OPEC crude oil and liquid fuels growth Adam Sieminski July 20,

Tight oil resource potential and production remain highly uncertain Adam Sieminski July 20, tight oil production million barrels per day Source: EIA, Annual Energy Outlook 2012 High TRR Reference High EUR Low EUR Technically Recoverable Resource (TRR) Estimated Ultimate Recovery (EUR)

U.S. imports of liquid fuels fall due to increased domestic production – including biofuels – and greater efficiency 15 U.S. liquid fuels consumption million barrels per day Source: EIA, Annual Energy Outlook 2012 EURTRR % 5% 36% 10% Natural gas plant liquids Other non- petroleum supply Biofuels Net petroleum imports Domestic including imports EUR TRREUR supply Reference Adam Sieminski July 20, 2012

U.S. dependence on imported petroleum declines …moves even lower in various “side case” scenarios U.S. liquid fuel supply million barrels per day ProjectionsHistory 2010 Consumption Domestic supply Net petroleum imports 49% 36% 60% 2005 Source: EIA, Annual Energy Outlook Adam Sieminski July 20, % Extended Policies High TRR

Heavy-duty vehicle natural gas consumption grows substantially in an AEO2012 side case 17 heavy-duty vehicle fuel consumption quadrillion Btu Source: EIA, Annual Energy Outlook 2012 (heavy-duty natural gas vehicle case) Motor Gasoline ProjectionsHistory Natural Gas Diesel % 8% 5% 64% 31% Adam Sieminski July 20, 2012

AEO2012 scenarios show wide range of outcomes 18 Adam Sieminski July 20, 2012 Reference case High and low economic growth High and low oil price High and low estimated ultimate recovery cases and high technically recoverable resources Integrated high and low technology (demand, renewables, electric power, refining, nuclear) Policy related: Extended Policy, No Sunset, No Greenhouse Gas Concern, carbon dioxide allowance fee ($15 and $25), and 5-year investment recovery with reference and with low natural gas prices Proposed light-duty vehicle CAFE standards; advanced battery technology; heavy-duty truck natural gas potential

Independence does not eliminate interdependence 19 Adam Sieminski July 20, 2012 “…quasi oil self-sufficiency will neither insulate the United States from the rest of the global oil market (and world oil prices), nor diminish the critical importance of the Middle East to its foreign policy.” Source: Harvard Kennedy School, Oil: the Next Revolution, June 2012

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