US set to become net energy exporter by 2022 - EIA

06 February 2018 18:42 Source:ICIS News

HOUSTON (ICIS)--The US will continue to develop its shale and tight oil and natural gas resources through 2050 against a backdrop of low growth in energy consumption, leading to the transition of the country from net energy importer to net energy exporter by 2022, the Energy Information Administration (EIA) said in an outlook published on Tuesday.

The US has been a net energy importer since 1953.

Under the EIA’s “reference case”, energy consumption is forecast to grow by about 0.4% per year on average in 2017 to 2050 – lower than expected population growth of 0.6% per year, and below expected average growth in real gross domestic product (GDP) of 2.0% per year through 2050.

The main reason for the slow growth in consumption are increases in energy efficiency, the EIA said.

The EIA added that some of its “sensitivity cases” incorporate assumptions supporting larger growth in oil and natural gas production or that have higher oil prices, meaning that the transition towards net energy exporter status could come before 2022.

US production of liquids and natural gas is set to continue growing for decades, the agency said.

In the EIAs reference case, production of shale gas resources is projected to increase through 2050.

US liquids production - mostly crude oil and petroleum products - begins to decline toward the end of the projection period as less productive areas are developed.

In the reference case, natural gas liquids (NGL) production nearly doubles between 2017 and 2050, supported by an increase in global petrochemical industry demand.

Near-term US natural gas production growth is supported by growing demand from large natural gas-intensive, capital-intensive chemical projects and from the development of liquefaction export terminals in an environment of low natural gas prices, the agency said.

Meanwhile, almost all new electricity generation capacity is fueled by natural gas and renewables after 2022, under the EIA’s reference case.

Natural gas prices are projected to remain lower than $5 per million British thermal units (MMBtu) until the very end of the projection period, according to the EIA’s forecasts.

The agency also said that the costs associated with adding new renewable electricity generation capacity are expected to continue declining, especially for solar photovoltaic systems.

By Stefan Baumgarten