14 December 2009 18:07 [Source: ICIS news]
WASHINGTON (ICIS news)--The US Department of Energy said on Monday that it expects US oil prices to rise to around $130/bbl by 2035, but that domestic prices for natural gas will rise less rapidly to about $8/MMBtu as shale gas output offsets declining conventional production.
In its annual long-term energy outlook, the department’s Energy Information Administration (EIA) said that in general, existing ?xml:namespace>
However, the administration’s chief, Richard Newell, noted that even with an increasing reliance on alternative and renewable energy sources, the
The price forecast for crude oil varies widely depending on considerations included in the 25-year forecast to 2035, with oil selling for as little as $55/bbl in that out year or as much as $215/bbl.
The EIA long-term energy outlook takes into consideration only existing US policies and the likely impact of legislation already passed but not yet implemented. The outlook does not include any prospective policy shifts, such as legislation pending in Congress to impose limits and reductions on US emissions of greenhouse gases.
The wellhead price for domestic
“Total domestic natural gas production grows from 20,600bn cubic feet [bcf] in 2008 to 23,300 bcf in 2035,” the outlook said, based largely on the strength of increasing shale gas development and production.
“With technology improvements and rising natural gas prices, natural gas production from shale grows to 6,000 bcf in 2035, more than offsetting declines in conventional production,” the report added.
The availability and price of natural gas is a major concern for US petrochemical producers and downstream chemical makers because they rely on natural gas for about half of the industry’s feedstock. Gas also is critical to
The EIA forecast also expects the price ratio of oil to natural gas to remain high over the next quarter-century.
The outlook predicts oil to cost about $22/MMBtu by 2035, while domestic natural gas will be priced at around $6/MMBtu in that year.
That ratio spread is crucial for US chemical makers because the relative lower cost of natural gas gives them a better competitive position in the global chemicals market.
Most other regions of the world rely chiefly on naphtha as a principal petrochemicals feedstock and consequently are tied to oil prices.
The increasing availability of domestic shale gas also means that the US will become less dependent on gas imports, according to the EIA, falling from 13% of US gas consumption in 2008 to about 6% in the out years and possibly as little as 2% in the best-case scenario.
($1 = €0.68)
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