US to become less dependent on energy imports - DOE

23 January 2012 16:42  [Source: ICIS news]

WASHINGTON (ICIS)--Increasing growth in domestic oil and natural gas production along with energy efficiency gains and slower economic growth will make the US less dependent on energy imports over the next two decades, the Energy Department said on Monday.

In its annual long-term energy outlook, the department’s Energy Information Administration (EIA) said its analysis of US energy production and use over the next 23 years shows a continuing fuel-shift in the nation’s power industry from coal to natural gas and “US natural gas production exceeding consumption” during the years up to 2035.

In addition, the EIA said it expects domestic oil production to grow by more than 20% over the next decade.

“Over the next ten years, continued development of tight oil combined with the development of offshore Gulf of Mexico resources are projected to push domestic crude oil production to 6.7m bbl/day in 2020, a level not seen since 1994,” the administration said.

US domestic oil production was 5.5m bbl/day in 2010.

Citing increased domestic oil and gas production, EIA director Howard Gruenspecht said US dependence on imported petroleum liquids will decline during the forecast period.

“Net petroleum imports as a share of total US liquid fuels consumed drop from 49% in 2010 to 38% in 2020 and to 36% in 2035,” he said.

For natural gas, Gruenspecht said domestic production will increase substantially over the next two decades, with output from shale gas accounting for all of the gains.

EIA said it expects overall domestic natgas production to increase from around 22,000bn cubic feet (bcf) in 2010 to or beyond 27,000 bcf in 2035.

While all other sources of domestic gas – tight gas, offshore production, oil-related gas production, etc. – decline by varying degrees over the forecast period, shale gas output increases significantly.

According to EIA, shale gas accounted for around 23% of all domestic gas production in 2010 but will grow to a 49% share by 2035.

As a result of those forecast gains in shale gas production, Gruenspecht said US gas output will exceed consumption early in the next decade.

“The US is projected to become a net exporter of liquefied natural gas (LNG) in 2016, an overall net exporter of natural gas in 2021, and a net pipeline exporter in 2025,” he said.

Those gains in domestic oil and natgas production, the EIA said, means net imports of energy as a share of total US energy demand will decline.

“The projected net import share of total US energy consumption in 2035 is 13%, compared with 22% in 2010 and 29% in 2007,” the administration said.

World liquids consumption is forecast to grow from 87.1m bbl/day in 2010 to 109.7 bbl/day by 2035, the administration said.

Driven by growing demand in China, India, the Middle East and other developing economies, the global price of oil is forecast to be $146/bbl (€114/bbl) in 2010 dollars by 2035, the forecast says.

($1 = €0.78)

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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