EIA expects US natural gas production, exports to rise from 2017 to 2050

Publishing its Annual Energy Outlook for 2017, the US Energy Information Administration (EIA) expects natural gas production in the US to continue to increase until 2050, which will help the country become a net energy exporter by 2026.

In good news for petrochemical firms and for liquefied natural gas (LNG), ethane and propane export ventures, EIA expects plentiful and growing gas supplies, especially on the Eastern seaboard. Total shale gas production is expected to hit 90 billion cubic feet per day by 2040, more than twice current levels.

Gas production “is actually going to go up quite a bit, with relatively low and stable prices,” supporting higher levels of domestic consumption, especially in the electric and industrial sectors, EIA Administrator Adam Sieminski said in a briefing on the annual report.

As production outpaces domestic consumption, LNG exports are expected to rise to 12 billion cubic feet per day by the end of the forecast period – or even higher, under favorable price, resource and technology assumptions.

When factoring in cross-border pipeline trade with Canada and Mexico, the US may well become a net exporter of natural gas by a margin of as much as 15 billion cubic feet per day.

Among this year’s key predictions, EIA also believes that American petroleum consumption will remain roughly flat for the next two decades, with rising fuel economy offsetting demand growth in transportation uses.

On the supply side, crude production is expected to rise slightly through the mid-2020s, and then remain flat – unless oil prices rise dramatically.

EIA expects a price recovery to US$80 per barrel within four years, followed by a gradual rise to more than US$100 per barrel by 2040. If prices should rise much more sharply, the agency predicts that US oil production will increase by about one third by the early 2020s, and then decline to meet reference levels by 2040.

Under most scenarios, the US would remain a net importer of petroleum throughout the forecast period.

Tight oil is expected to make up the majority of new production. Offshore Gulf of Mexico oil output is expected to decline from 2020 through 2034 as existing fields mature, but offshore natural gas is expected to increase through 2040.

In electrical power generation, coal consumption is expected to decline, losing market share to natural gas and renewables. Of all energy sources, renewables are expected to grow fastest (on a percentage basis) due to increasing economies of scale and continued government support.

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