emerging oil & gas supplies: future prospects for oil & gas … · · 2017-09-20tight oil...
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www.eia.gov U.S. Energy Information Administration Independent Statistics & Analysis
Emerging Oil & Gas Supplies: Future
Prospects for Oil & Gas Production
for
Bipartisan Policy Center: Understanding the New Energy Landscape
June 27, 2012| Washington, DC
John Staub, Team Leader for Exploration and Production Analysis
U.S. shale gas production comprised over 30 percent of total
U.S. dry production, in 2011
John Staub, Washington, DC
June 27, 2012 2
0
5
10
15
20
25
30
2000 2002 2004 2006 2008 2010 2012
Rest of US
Bakken (ND)
Eagle Ford (TX)
Marcellus (PA and WV)
Haynesville (LA and TX)
Woodford (OK)
Fayetteville (AR)
Barnett (TX)
Antrim (MI, IN, and OH)
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.
Tight oil production for selected plays in March 2012
approaches 900,000 barrels per day
John Staub, Washington, DC
June 27, 2012 3
0
200
400
600
800
1,000
2000 2002 2004 2006 2008 2010 2012
Eagle Ford
Bakken
Granite Wash
Bonespring
Monterey
Woodford
Niobrara
Spraberry
Austin Chalk
thousand barrels of oil per day
Source: HPDI, Texas RRC, North Dakota department of mineral resources, and EIA, through March, 2012.
Technology and its application can change rapidly:
horizontal drilling replaced vertical drilling in the Barnett shale
between 2003 and 2007
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June 27, 2012 4
percentage of new wells drilled
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Vertical Wells
Horizontal Wells
Directional Wells
Source: EIA analysis of Barnett shale play
The shale gas & tight oil technology story is
only beginning, with much yet to be written
• Technology is creating new resources out of rocks
• Production data provides a rearview mirror perspective
– see the changes, but with a delay
– EIA does not anticipate step changes in technology applications
– EIA does recognize and incorporate long-term technological change
• Annual re-estimating of U.S. plays is necessary
– new data is providing significant new detail of what production is possible
• Broad implications exist for world wide oil and gas production
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June 27, 2012
The shale gas & tight oil uncertainty
• Uncertainty is illustrated through scenario analysis of key
variables
– resource volume, how well we understand geology characteristics, productivity
of wells across a play and over time, and how many wells can be drilled
– Technically Recoverable Resources is only one measure of production potential
– others considerations include: depth, access, labor and infrastructure
availability, which all play a role in the cost of production
6 John Staub, Washington, DC
June 27, 2012
Theory Experiment Commercial Practice
Technically recoverable resources are dynamic and reflect
changing understanding of geology, technology and economics
John Staub, Washington, DC
June 27, 2012 7
Geology
Engineering / Technology
Economics
Gas in Place Technically
Recoverable
Resources
Drilling Data
Shale gas resource potential and related costs remain highly uncertain
0
5
10
15
20
25
2010 2015 2020 2025 2030 2035
Three alternate cases
High Technically Recoverable Resource (TRR) case
assumes High EUR case with wells closer together (80
acres per well), and it could represent finding more
plays.
High Estimate Ultimate Recovery (EUR) case
assumes an EUR per shale gas well set 50% higher than
in the Reference case. Results in lower per Mcf costs.
Low EUR case is like High EUR but lower.
High TRR
Reference
High EUR
Shale gas production
trillion cubic feet
Low EUR
8 John Staub, Washington, DC
June 27, 2012
Source: EIA, Annual Energy Outlook 2012
Tight oil resource potential and production remain highly uncertain
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2010 2015 2020 2025 2030 2035
Three alternate cases
High Technically Recoverable Resource (TRR) case
assumes High EUR case with wells closer together (80
acres per well), and it could represent finding more
plays.
High Estimate Ultimate Recovery (EUR) case
assumes an EUR per shale gas well set 50% higher than
in the Reference case. Results in lower per Mcf costs.
Low EUR case is like High EUR but lower.
High TRR
Reference
High EUR
Tight oil production
million barrels per day
Low EUR
9 John Staub, Washington, DC
June 27, 2012
Source: EIA, Annual Energy Outlook 2012
Increased drilling in the Western Gulf Basin
(Eagle Ford play) is driving up oil production
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Denver Basin (Niobrara play) production is expected
to fall due to better productivity in other plays
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June 27, 2012 11
Steep decline curves for shale gas plays make the market more
responsive to price
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0
500
1,000
1,500
2,000
0 5 10 15 20
Haynesville
Eagle Ford
Woodford
Marcellus
Fayetteville
million cubic feet per year
Source: EIA, Annual Energy Outlook 2012
1
0%
50%
100%
0 5 10 15 20
Cumulative production
Some questions to consider:
13 John Staub, Washington, DC
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What is possible? What are the risks?
• What do we know, and don’t know, about the resources?
• What is the possible rate and magnitude of production?
– What is the breakeven cost, or profitability that is driving the industry?
– What is the possibility that we aim to low or have overlooked some better
prospects?
– What are the technology factors that either could be improved upon, or have
already been improved upon, to achieve that growth?
• What, if anything, is standing in the way of achieving the
full potential of tight oil?
– Labor, access to resources, pipeline or rail capacity, refinery capacity and type
For more information
John Staub, Washington, DC
June 27, 2012 14
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
EIA Information Center
Our average response time is within three
business days.
(202) 586-8800
24-hour automated information line about EIA
and frequently asked questions.
Initial assessment of shale gas resources in 48 major shale basins in 32
countries indicates a large potential globally
15
Source: U.S. Energy Information Administration http://www.eia.gov/analysis/studies/worldshalegas/
John Staub, Washington, DC
June 27, 2012
16 John Staub, Washington, DC
June 27, 2012 http://www.eia.gov/pub/oil_gas/natural_gas/analysis_publications/maps/maps.htm
17
0
500
1000
1500
2000
2500
3000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
U.S. dry gas resources
trillion cubic feet
*Alaska resource estimates prior to AEO2009 reflect resources from the North Slope that were not included in previously published
documentation.
Source: EIA, Annual Energy Outlook 2012
2,214
273
482
1,460
Unproved shale gas
Unproved other gas (including Alaska* and offshore)
Proved reserves (all types and locations)
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June 27, 2012
AEO Edition
Technically recoverable resources are dynamic and reflect
changing understanding of geology, technology and economics
Key concepts
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June 27, 2012 18
• Gas in place (GIP)
– Total amount of gas that exists in reservoirs (including shale) in a field (field: geographic area, geologically related)
– GIP cannot be directly measured, only inferred from maps of geologic parameters
• Technically recoverable resources (TRR)
– Amount of gas that could be produced from a field using currently available technology and production practices, but regardless of economic viability
– Includes historical production, known proved reserves, plus estimate of areas not yet tested
• Economically recoverable resources
– Amount of gas that would be produced economically from a field using currently available technology and production practices, and assuming current economic (e.g., costs, prices) conditions continue without change
• Estimated ultimate recovery per well (EUR)
– Estimate of total gas that will be produced by any given well
– Based on historical production data and decline curve fit
AEO 2012 projected annual tight oil production: selected plays
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June 27, 2012 19
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
2010 2015 2020 2025 2030 2035
Niobrara
million barrels per day
Source: U.S. Energy Information Administration, Annual Energy Outlook 2012, Early Release
Bakken
Eagle Ford Woodford
Austin Chalk
Monterey
Avalon/Bone Springs
Spraberry
Monthly tight oil and gas production for selected plays through
March 2012 is over 1.6 million barrels of oil equivalent per day
John Staub, Washington, DC
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0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2000 2002 2004 2006 2008 2010 2012
Eagle Ford
Bakken
Granite Wash
Bonespring
Monterey
Woodford
Niobrara
Spraberry
Austin Chalk
barrels of oil equivalent per day
Source: HPDI and EIA, through March, 2012.