Over the next 10 years, continued development of tight oil and ongoing development of offshore resources in the Gulf of Mexico will push US crude oil production to 6.7 million b/d in 2020, and even with a projected decline after 2020, crude oil production will remain above 6.1 million b/d through 2035, the US Energy Information Administration forecasts in the early release of its Annual Energy Outlook 2012 (AEO2012). The full report will be released on Apr. 26.
These projections are in the AEO2012 reference case, which focuses on factors that shape US energy markets in the long term, under the assumption that current laws and regulations remain generally unchanged throughout the projection period. EIA says the outlook provides a basis for examination and discussion of energy market trends and serves as a starting point for analysis of potential changes in US energy policies, rules, or regulations or potential technology breakthroughs.
Shale gas production in the US is forecast to climb to 13.6 tcf in 2035, comprising 49% of total dry gas production, from 5 tcf in 2010, when shale gas comprised 23% of total US dry gas production.
With increased production, EIA forecasts that average annual wellhead prices for natural gas will remain below $5/Mcf (in 2010 dollars) through 2023 in the reference case.
After 2023, gas prices will increase as the number of tight gas and shale gas wells drilled increases to meet growing US demand and offset declines in gas production from other sources. Gas prices then will rise as production gradually shifts to resources that are less productive and more expensive, reaching $6.52/Mcf in 2035.
Gas production is expected to exceed consumption early in the next decade, EIA said, as the US is projected to become a net exporter of LNG in 2016, a net pipeline exporter in 2025, and an overall net exporter of natural gas in 2021.
The outlook reflects increased use of LNG in markets outside of North America, strong US gas production, reduced pipeline imports and increased pipeline exports, and relatively low natural gas prices in the US compared to other global markets, the report said.
US oil demand
Energy-demand growth in the US will slow over the forecast period, reflecting an extended economic recovery and increasing energy efficiency in end-use applications. Projected demand for transportation fuels will grow at an annual rate of 0.2% from 2010-35 in the reference case, and electricity demand will grow by 0.8%/year.
Energy consumption per capita will decline by an average of 0.5%/year between 2010 and 2035, according to the report, while energy intensity of the US economy will decline by 42% over the period.
With modest economic growth, increased efficiency, growing domestic production, and continued adoption of nonpetroleum liquids, net petroleum imports will account for a smaller share of total liquids consumption, AEO2012 said.
US dependence on imported petroleum liquids is forecast to decline in the reference case, primarily as a result of growth in US oil production by more than 1 million b/d by 2020, an increase in biofuels use of more than 1 million boe/d by 2024, and modest growth in transportation fuels demand through 2035.
Net petroleum imports as a share of total US liquid fuels consumed will decline to 36% in 2035 from 49% in 2010. Proposed fuel economy standards covering vehicle model years 2017-25 that are not included in the reference case would further reduce projected liquids use and the need for liquids imports, according to the report.