Natural Gas Demand: New Domestic Uses and LNG Exports

1
Natural Gas DemandNew Domestic Uses and LNG
Exports

• Natural Gas Demand Outlook
• Morgan Stanley Global Commodities Conference
• December 12, 2012 Sunny Isles Beach, FL
• by
• Adam Sieminski, Administrator

2
Shale gas leads growth in production through 2040

• U.S. dry natural gas production
• trillion cubic feet

Projections
History
2011
Shale gas
Tight gas
Non-associated offshore
Alaska
Coalbed methane
Associated with oil
Non-associated onshore

• Source EIA, Annual Energy Outlook 2013 Early
  Release

3
Natural gas consumption is dispersed with
electric power, industrial, and transportation
use driving future demand growth

• U.S. dry gas consumption
• trillion cubic feet

Projections
History
Includes combined heat-and-power and lease and
plant fuel. Includes pipeline fuel.
Electric power
32
31
Industrial
33
33
2
Gas to liquids
6
3
Transportation
13
12
Commercial
19
14
Residential

• Source EIA, Annual Energy Outlook 2013 Early
  Release

4
Electricity generation mix shifts toward natural
gas and renewables, but coal remains the largest
fuel source

• U.S. electricity net generation
• trillion kilowatthours

Projections
History
2011
1993
30
Natural gas
25
16
Renewables
13
13
11
19
17
Nuclear
19
35
42
53
Coal
Oil and other liquids
4
1
1

• Source EIA, Annual Energy Outlook 2013 Early
  Release

5
Industrial natural gas use grows, especially
before 2025

• Industrial natural gas consumption
• quadrillion Btu

• Source EIA, Annual Energy Outlook 2013 Early
  Release

6
Natural gas use in transportation rises as motor
gasoline demand declines overall transportation
use is largely unchanged

• Transportation energy consumption by fuel
• quadrillion Btu

Projections
History
2011
22
29
Diesel
CNG/LNG
11
4
4
Jet fuel
13
2
E85
Other
1
4
3
Pipeline fuel
60
Motor gasoline
47

• Source EIA, Annual Energy Outlook 2013 Early
  Release

7
Growth of natural gas in transportation led by
heavy duty trucks (LNG) and gas to liquids
(diesel) marine and rail to come?

• U.S. natural gas consumption
• quadrillion Btu

History
Projections
2011
28
Gas to liquids
Freight trucks
38
1
3
Buses
1
1
Light-duty vehicles
3
Pipeline fuel
31
95

• Note Gas to liquids includes heat, power, and
  losses.
• Source EIA, Annual Energy Outlook 2013 Early
  Release

8
Domestic natural gas production grows faster than
consumption and the U.S. becomes a net exporter
of natural gas around 2020

• U.S. dry gas
• trillion cubic feet

Projections
History
2011
Consumption
Domestic supply
Net imports

• Source EIA, Annual Energy Outlook 2013 Early
  Release

9
Total natural gas exports nearly quadruple by
2040 in the AEO2013 Reference case

• U.S. natural gas exports
• trillion cubic feet

Exports to Mexico
Exports to Canada
Lower 48 LNG exports
Alaska LNG exports

• Source EIA, Annual Energy Outlook 2013 Early
  Release

10
Regulations for LNG export licenses

• Two key federal agencies are involved in LNG
  export licenses. The Federal Energy Regulatory
  Commission (FERC) licenses the export facilities
  (LNG plants and terminals). The Department of
  Energys Office of Fossil Energy (DOE/FE) is
  responsible for a public interest determination.
• Federal law generally requires approval of
  natural gas exports to countries that have a free
  trade agreement (FTA) with the United States.
• For countries that do not have an FTA, the DOE is
  required to grant applications for export
  authorizations unless the proposed exports "will
  not be consistent with the public interest." 
  Factors for consideration include economic,
  energy security, and environmental impacts.
• On August 7, 2012, Cheniere Marketing, LLC was
  granted a non-FTA license for up to 2.2 Bcf per
  day over 20 years. On December 5, 2012, the
  DOE/FE released a consultant study (NERA) on the
  economic impact of LNG exports, and invited
  comments. The NERA report will become part of the
  15 pending export application dockets.
• DOE/FE expects to act on the applications on a
  case-by-case basis, starting with applicants
  which have already commenced the pre-filing
  process at FERC.

11
For more information

• U.S. Energy Information Administration home page
  www.eia.gov
• Annual Energy Outlook www.eia.gov/forecasts/aeo
• Short-Term Energy Outlook www.eia.gov/forecasts/
  steo
• International Energy Outlook www.eia.gov/forecas
  ts/ieo
• Today In Energy www.eia.gov/todayinenergy
• Monthly Energy Review www.eia.gov/totalenergy/da
  ta/monthly
• Annual Energy Review www.eia.gov/totalenergy/dat
  a/annual