U.S. Energy Information Administration Independent Statistics & Analysis Outlook for shale gas and tight oil development in the U.S. for FLAME Natural Gas & LNG Conference March 13, 2013 | Amsterdam, Netherlands by Adam Sieminski, Administrator

Annual Energy Outlook 2013 projections to Growth in energy production outstrips consumption growth Crude oil production rises sharply over the next decade Motor gasoline consumption reflects more stringent fuel economy standards The U.S. becomes a net exporter of natural gas in the early 2020s U.S. energy-related carbon dioxide emissions remain below their 2005 level through 2040 Adam Sieminski, FLAME March 13, 2013

U.S. energy use grows slowly over the projection reflecting improving energy efficiency and slow, extended economic recovery 3 U.S. primary energy consumption quadrillion Btu Adam Sieminski, FLAME March 13, 2013 HistoryProjections % 20% 26% 8% 1% 32% 28% 19% 11% 9% 2% Shares of total U.S. energy Nuclear Oil and other liquids Liquid biofuels Natural gas Coal Renewables (excluding liquid biofuels) % 39% 24% 6% 8% Source: EIA, Annual Energy Outlook 2013 Early Release

U.S. Shale Gas 4 Adam Sieminski, FLAME March 13, 2013

An average well in shale gas and other continuous resource plays can also have steep decline curves, which require continued drilling to grow production 5 million cubic feet per year Source: EIA, Annual Energy Outlook Adam Sieminski, FLAME March 13, 2013

For example: Oil production by monthly vintage of wells in the Williston Basin 6 Source: DrillingInfo history through August 2012, EIA Short-Term Energy Outlook, February 2013 forecast Adam Sieminski, FLAME March 13, 2013

Domestic production of shale gas has grown dramatically over the past few years 7 shale gas production (dry) billion cubic feet per day Sources: LCI Energy Insight gross withdrawal estimates as of January 2013 and converted to dry production estimates with EIA-calculated average gross-to-dry shrinkage factors by state and/or shale play. Adam Sieminski, FLAME March 13, 2013

Shale gas leads growth in total gas production through U.S. dry natural gas production trillion cubic feet Source: EIA, Annual Energy Outlook 2013 Early Release Associated with oil Coalbed methane Tight gas Shale gas Alaska Non-associated onshore Non-associated offshore ProjectionsHistory 2011 Adam Sieminski, FLAME March 13, 2013

9 U.S. dry gas consumption trillion cubic feet Source: EIA, Annual Energy Outlook 2013 Early Release 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, FLAME March 13, 2013

Growth of natural gas in transportation led by heavy duty trucks (LNG) and gas to liquids (diesel)… marine and rail to come? 10 U.S. natural gas consumption quadrillion Btu Note: Gas to liquids includes heat, power, and losses. Source: EIA, Annual Energy Outlook 2013 Early Release Adam Sieminski, FLAME March 13, 2013 Pipeline fuel Light-duty vehicles 2011 HistoryProjections 95% 3% 1% 28% 38% 3% 31% 1% Buses Freight trucks Gas to liquids

Total natural gas exports nearly quadruple by 2040 in the AEO2013 Reference case 11 U.S. natural gas exports trillion cubic feet Source: EIA, Annual Energy Outlook 2013 Early Release Alaska LNG exports Exports to Mexico Exports to Canada Lower 48 LNG exports Adam Sieminski, FLAME March 13, 2013

Domestic natural gas production grows faster than consumption and the U.S. becomes a net exporter of natural gas around 2020 Adam Sieminski, FLAME March 13, U.S. dry gas trillion cubic feet Source: EIA, Annual Energy Outlook 2013 Early Release ProjectionsHistory 2011 Consumption Domestic supply Net imports

U.S. Tight Oil 13 Adam Sieminski, FLAME March 13, 2013

Domestic production of tight oil has grown dramatically over the past few years 14 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 October Adam Sieminski, FLAME March 13, 2013

U.S. tight oil production leads a growth in domestic production of 2.6 million barrels per day between 2008 and U.S. crude oil production million barrels per day Source: EIA, Annual Energy Outlook 2013 Early Release and Short-Term Energy Outlook, February 2013 ProjectionsHistory 2011 Alaska Tight oil Other lower 48 onshore Lower 48 offshore STEO Feb U.S. crude oil projection Adam Sieminski, FLAME March 13, 2013

U.S. petroleum product exports exceeded imports in 2011 for first time in over six decades 16 annual U.S. net exports of total petroleum products, 1949 – 2011 million barrels per day Source: EIA, Petroleum Supply Monthly net product exporter Adam Sieminski, FLAME March 13, 2013

U.S. dependence on imported liquids depends on both supply and demand 17 U.S. liquid fuel supply million barrels per day Source: EIA, Annual Energy Outlook 2013 Early Release Consumption Domestic supply Net imports 45% 37% ProjectionsHistory % 2005 Adam Sieminski, FLAME March 13, 2013

Light-duty vehicle liquids consumption is lower primarily due to more stringent CAFE standards Adam Sieminski, FLAME March 13, light-duty vehicle liquids consumption million barrels per day Source: EIA, Annual Energy Outlook 2013 Early Release AEO2012 AEO2013

Global tight oil production comparisons 19 Source: Preliminary International Energy Outlook 2013, BP Energy Outlook 2030 million barrels per day BP Energy Outlook 2030 IEO2013 DRAFT Adam Sieminski, FLAME March 13, 2013

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