Your web browser is out of date. Update your browser for more security,
speed and the best experience on this site.
You have successfully subscribed to the newsletter!
12 06, 2012 by POLITICO
A federal report released Wednesday offers the latest indication that U.S. energy production will continue to boom in the coming decades amid surging production from shale while imports plummet and gasoline consumption falls below previous estimates.
The Energy Information Administration, in a summary of its 2013 Annual Energy Outlook, said domestic energy production will grow more quickly than consumption through 2040. And imports will fall from 19 percent of total U.S. energy consumption in 2011 to 9 percent in 2040.
The report also contains good news for renewables — though not necessarily for biofuels. And motorists shouldn’t expect a return to cheap gasoline: They’ll be paying more than $4 per gallon in 2040 under the EIA’s scenario.
The report, which will be released in full early next year and updates the agency’s 2012 projections, “shows how evolving consumer preferences, improved technology and economic changes are pushing the nation toward more domestic energy production, greater vehicle efficiency, greater use of clean energy and reduced energy imports,” EIA Administrator Adam Sieminski said.
It comes less than a month after the International Energy Agency predicted the U.S. will become the world’s largest oil producer, moving ahead of Saudi Arabia before 2020, and that North America will be a net oil exporter by around 2030.
Under what the EIA deems the most likely scenario, crude oil production “rises sharply” over the next decade, according to Wednesday’s report, which cites “the advent and continuing improvement of advanced crude oil production technologies.” Annual growth will average 234,000 barrels per day with production reaching 7.5 million barrels per day in 2019.
The growth will come largely from onshore oil production, especially from shale and other “tight” formations, says the EIA, the statistical arm of the Energy Department. But it says production will start “declining gradually” after about 2020, falling to 6.1 million barrels a day in 2040 “as producers develop sweet spots first and then move to less productive or less profitable drilling areas.”
It’s a similar story with natural gas. “Relatively low natural gas prices, facilitated by growing shale gas production, [will] spur increased use in the industrial and electric power sectors, particularly over the next 15 years,” the EIA report says.
And the report says the United States will become a net exporter of natural gas even earlier than the agency had projected just a year ago. It says the U.S. will be a net exporter of liquefied natural gas in 2016 and a net exporter of total natural gas in 2020.
The EIA also lowered its projections for gasoline consumption when compared with last year’s report, pointing to the Obama administration’s beefed-up fuel economy standards. Thanks to those standards, gasoline consumption in the transportation sector will fall by 0.5 million barrels per day in 2025 and by 1 million barrels per day in 2035 compared with last year’s projections.
Renewables will also see an expansion in the coming decades, EIA says. It projects the share of generation from renewables will increase from 13 percent in 2011 to 16 percent in 2040. But the report says the agency is “less optimistic” about “the ability of advanced biofuels to capture a rapidly growing share of the liquid fuels market.”
As for climate change, the report projects that U.S. energy-related carbon dioxide emissions will remain more than 5 percent below 2005 levels through 2040. In comparison, the Waxman-Markey cap-and-trade bill would have set a target of getting greenhouse gas emissions 3 percent below 2005 levels by 2012, 17 percent by 2020 and 83 percent by 2050.
The report projects gasoline prices will increase from an average of $3.45 per gallon in 2011 to $4.32 per gallon in 2040.
And Henry Hub spot natural gas prices will stay below $4 per million Btu through 2018, although prices will rise to $5.40 in 2030 and $7.83 in 2040, the agency says.
EIA says that “a wide range of price scenarios and discussion of the significant uncertainty surrounding future world oil prices” will be included in the full report next year. But the agency nonetheless projects that the Brent spot oil price will go down from $111 per barrel in 2011 to $96 per barrel in 2015. Prices will increase after 2015 to $163 per barrel in 2040.
The report makes its projections based on the assumption that current laws and regulations will remain largely the same through 2040.
Jan 20, 2022 | LMOGA
Dec 13, 2021 | LMOGA
Nov 17, 2021 | LMOGA
Nov 02, 2021 | LMOGA