growth in appalachian hydrocarbon gas liquids …...u.s. energy information administration...

www.eia.govU.S. Energy Information Administration Independent Statistics & Analysis

Growth in Appalachian hydrocarbon gas liquids production leads to downstream investment

For:2018 EIA Energy ConferenceJune 5, 2018 | Washington, DC

By:Warren WilczewskiOffice of Petroleum, Natural Gas, and Biofuels Analysis

EIA products help to shape the conversation• EIA’s Energy Mapping System provides data on U.S. energy infrastructure, including

pipelines, terminals, refineries, gas plants, and petrochemical crackers

• EIA’s tabulation of production data enables tracking of growth in natural gas and natural gas plant liquids (NGPL) production in the region and around the country

• Forecasting products, including the Short Term Energy Outlook (STEO) and the Annual Energy Outlook (AEO), provide insights into future trends and opportunities for consideration in long-term planning and investment

• EIA data tabulation of movements by pipelines, barges, and rail illustrate how the U.S. energy market balances production with demand

• Providing state-level supply and consumption data and estimates make more granular information available to consumers and local decision-makers

• Today In Energy articles educate and bring issues into focus, like our series on Appalachia natural gas developments

Warren Wilczewski - 2018 EIA Energy ConferenceJune 5, 2018 | Washington, DC 2

Key takeaways• EIA’s coverage of Appalachian production growth is comprehensive

– Current analytical and modeling work includes detailed well data

– Monthly production statistics for natural gas and crude oil are collected and reported at the state level

– Tables splitting out alkanes and olefins in hydrocarbon gas liquids (HGL) data provide clearer picture of the market

– HGL-by-rail movements at the PADD level generate improved balances

• Improved forecasting tools round out the regional picture– AEO2018 features projections for region-level NGPL production

– Drilling Productivity Report provides near-term outlook for drilling activity and production


Marcellus wells through February 2018 and thermal maturity

Utica-Point Pleasant wells through February 2018 and thermal maturity

Warren Wilczewski - 2018 EIA Energy ConferenceJune 5, 2018 | Washington, DC

The Appalachian basin has favorable geological characteristics to remain a producing region for the long haul

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WV drilling data through Dec. 2016 only; annual data released 7 months after year-end. OH drilling data through Dec. 2017; quarterly data released 3 months after quarter end.Sources: EIA; DrillingInfo, Inc.; Appalachian Oil & Natural Gas Research Consortium; U.S. Geological Survey

-10

0

10

20

30

40

Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18

cumulative change in natural gas production since January 2012billion cubic feet per day


Since January 2012, the Appalachia region has accounted for 65% of increases in natural gas production from major shale regions

Source: U.S. Energy Information Administration, Drilling Productivity Report, May 14, 2018

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BakkenPermianEagle Ford

Appalachia

AnadarkoNiobraraHaynesville

https://www.eia.gov/petroleum/drilling/

Natural gas pipelines in the northeastern United States built to move natural gas out of the producing region


Moving dry gas out of the Appalachian region is becoming easier, with outbound pipeline capacity rising four-fold since 2010

Source: EIA Natural Gas Dry Production; Northeast region slated for record natural gas pipeline capacity buildout in 2018

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https://www.eia.gov/todayinenergy/detail.php?id=36272

0.0

0.2

0.4

0.6

0.8

1.0

2010 2012 2014 2016 20180.0

1.0

2.0

3.0

4.0

5.0

2010 2012 2014 2016 2018

U.S. NGPL productionmillion b/d


Since January 2010, NGPL production doubled in the U.S. and grew six-fold in Appalachia

Source: U.S. Natural Gas Plant Field Production; Appalachian No. 1 NGP Field Production + IN,IL,KY NGP Field Production, data to Mar. 2018

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ethane

propane

isobutanenormal butanenatural gasoline

Appalachia (KY, OH, PA, WV) NGPL productionmillion b/d

https://www.eia.gov/dnav/pet/pet_pnp_gp_dc_nus_mbblpd_m.htm

https://www.eia.gov/dnav/pet/pet_pnp_gp_dc_rap_mbblpd_m.htm


https://www.eia.gov/dnav/pet/pet_pnp_gp_dc_r2a_mbblpd_m.htm



Significant midstream investment in the region allows production to grow

Source: U.S. Energy Information Administration EIA-757 Data; Company public filings and press releases; Appalachian natural gas processing capacity key to increasing natural gas, NGPL production

100015010050

Gas Plant CapacityMMcfd

201912.5 Bcfd

20101.1 Bcfd

Marcus Hook ->PA NJ

DE

18015010050

FractionatorCapacity

1,000 b/d

20100.04 mil. b/d

20191.1 mil. b/d

Natural gas processing capacity Fractionation capacity

https://www.eia.gov/cfapps/ngqs/ngqs.cfm?f_report=RP9&f_sortby=&f_items=&f_year_start=&f_year_end=&f_show_compid=&f_fullscreen

https://www.eia.gov/todayinenergy/detail.php?id=32692


HGL pipeline Throughput (1,000 b/d) Start

To CanadaMariner West 50 2013 Q4Utopia East 50 2018 Q1To U.S. Gulf CoastATEX 125 2014 Q1ATEX expansion 25 2017 Q4UMTP 430 2019+To overseas export marketsMariner East 70 2015 Q3Mariner East II 275 2018 Q3Mariner East IIx 250 2019 Q2To local marketTeppco 60 2014 Q1Cornerstone 100 2016 Q4Falcon (Shell) 107 ±2020Source: EIA, company filings and public announcements

Projects to ship HGL out precede development of in-region demand

1,000

1,030

1,060

1,090

1,120

2010 2012 2014 2016 2018

W. Virginia

average

Pennsylvania

OhioKentucky

methane (1,010 Btu)0

200

400

600

800

1,000

2010 2011 2012 2013 2014 2015 2016 2017 2018

ethane productionthousand b/d


Gas quality data suggests the resource potential, especially for ethane, is above rates of current Appalachian production

Source: EIA Heat Content of Natural Gas Consumed; Natural Gas Gross Withdrawals and Production; Natural Gas Plant Field Production

10

conservative ethane rejection estimate

reported

potential ethane resource at full recovery

heat content of delivered natural gasBtu/scf

https://www.eia.gov/dnav/ng/ng_cons_heat_a_EPG0_VGTH_btucf_a.htm

https://www.eia.gov/dnav/ng/ng_prod_sum_a_EPG0_FGW_mmcf_m.htm

https://www.eia.gov/dnav/pet/pet_pnp_gp_dc_nus_mbbl_m.htm

0.0

0.5

1.0

1.5

2.0

2010 2015 2020 2025 2030 2035 2040 2045 2050

U.S. annual NGPL production by regionmillion b/d

East Region annual NGPL production by productmillion b/d


EIA’s AEO projects the East region to produce 35% of total U.S. NGPL production, with ethane accounting for half of that production

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2010 2015 2020 2025 2030 2035 2040 2045 2050

Midcontinent

Gulf Coast

East

Southwest

ProjectionsHistory

Rocky Mountains

2017

Lower Offshore

West Coast

ethane

propane

isobutanenormal butanenatural gasoline

ProjectionsHistory 2017

Source: EIA AEO; Natural gas plant liquids production reaches new annual record in 2017, with projected continued growth

https://www.eia.gov/naturalgas/weekly/archivenew_ngwu/2018/03_01/

Today in Energyhttps://www.eia.gov/todayinenergy/index.php?tg=HGL%20(hydrocarbon%20gas%20liquid)

Energy by rail datahttps://www.eia.gov/dnav/pet/pet_move_railNA_a_EPLLPA_RAIL_mbbl_m.htm

Short-Term Energy Outlook (STEO)https://www.eia.gov/outlooks/steo/

Energy Explained: Hydrocarbon Gas Liquidshttp://www.eia.gov/energyexplained/index.cfm?page=hgls_home

State Energy Data Portalhttps://www.eia.gov/state/

Drilling Productivity Reporthttp://www.eia.gov/petroleum/drilling/

EIA Annual Conferencehttps://www.eia.gov/conference/2018/

12Warren Wilczewski - 2018 EIA Energy ConferenceJune 5, 2018 | Washington, DC

For further reading…

https://www.eia.gov/todayinenergy/index.php?tg=HGL%20(hydrocarbon%20gas%20liquid)

https://www.eia.gov/dnav/pet/pet_move_railNA_a_EPLLPA_RAIL_mbbl_m.htm

https://www.eia.gov/outlooks/steo/

http://www.eia.gov/energyexplained/index.cfm?page=hgls_home

https://www.eia.gov/state/

http://www.eia.gov/petroleum/drilling/

https://www.eia.gov/conference/2018/

growth in appalachian hydrocarbon gas liquids …...u.s. energy information administration...

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