‹ Analysis & Projections

Annual Energy Outlook 2011

Release Date: April 26, 2011   |  Next Early Release Date: January 23, 2012  |   Report Number: DOE/EIA-0383(2011)

natural gasNatural Gas

exec summary Executive Summary

Shale gas production in the United States grew at an average annual rate of 17 percent between 2000 and 2006. Early success in shale gas production was achieved primarily in the Barnett Shale in Texas. By 2006, the success in the Barnett shale, coupled with high natural gas prices and technological improvements, turned the industry focus to other shale plays. The combination of horizontal drilling and hydraulic fracturing technologies has made it possible to produce shale gas economically, leading to an average annual growth rate of 48 percent over the 2006-2010 period.

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Mkt trends Market Trends

Unlike crude oil prices, natural gas prices do not return to the higher levels recorded before the 2007-2009 recession (Figure 86). Although some supply factors continue to relate the two markets loosely, the two do not track directly (Figure 87). The large difference between crude oil and natural gas prices results in a shift in drilling toward shale formations with high concentrations of liquids.

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issues Issues in Focus

Production of natural gas from large underground shale formations (shale gas) in the United States grew by an average of 17 percent per year from 2000 to 2006. Early successes in shale gas production occurred primarily in the Barnett Shale of north central Texas. By 2006, successful shale gas operations in the Barnett shale, improvements in shale gas recovery technologies, and attractive natural gas prices encouraged the industry to accelerate its development activity in other shale plays. The combination of two technologies—horizontal drilling and hydraulic fracturing—made it possible to produce shale gas economically, and from 2006 to 2010 U.S. shale gas production grew by an average of 48 percent per year. Further increases in shale gas production are expected, with total production growing by almost threefold from 2009 to 2035 in the AEO2011 Reference case. However, there is a high degree of uncertainty around the projection, starting with the estimated size of the technically recoverable shale gas resource.

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Reference Case Tables
Table 1. Total Energy Supply, Disposition, and Price Summary XLS
Table 13. Natural Gas Supply, Disposition, and Prices XLS
Table 14. Oil and Gas Supply XLS
Table 18. Carbon Dioxide Emissions by Sector and Source - United States XLS
Table 18.1. Carbon Dioxide Emissions by Sector and Source - New England XLS
Table 18.2. Carbon Dioxide Emissions by Sector and Source - Middle Atlantic XLS
Table 18.3. Carbon Dioxide Emissions by Sector and Source - East North Central XLS
Table 18.4. Carbon Dioxide Emissions by Sector and Source - West North Central XLS
Table 18.5. Carbon Dioxide Emissions by Sector and Source - South Atlantic XLS
Table 18.6. Carbon Dioxide Emissions by Sector and Source - East South Central XLS
Table 18.7. Carbon Dioxide Emissions by Sector and Source - West South Central XLS
Table 18.8. Carbon Dioxide Emissions by Sector and Source - Mountain XLS
Table 18.9. Carbon Dioxide Emissions by Sector and Source - Pacific XLS
Table 60. Lower 48 Crude Oil Production and Wellhead Prices by Supply Region XLS
Table 61. Lower 48 Natural Gas Production and Wellhead Prices by Supply Region XLS
Table 62. Oil and Gas End-of-Year Reserves and Annual Reserve Additions XLS
Table 63. Natural Gas Imports and Exports XLS
Table 64. Natural Gas Consumption by End-Use Sector and Census Division XLS
Table 65. Natural Gas Delivered Prices by End-Use Sector and Census Division XLS
Table 66. Primary Natural Gas Flows Entering NGTDM Region from Neighboring Regions XLS