US to become net energy exporter in 2020 – EIA

HOUSTON (ICIS)–US energy exports will surpass imports for the first time in 70 years in 2020, and the country will remain a net exporter through 2050, the Energy Information Administration (EIA) said on Thursday.

The expectation is driven by robust development of US shale and tight oil and natural gas resources, as production will continue at record levels amid slow growth in energy consumption, the EIA said in its Annual Energy Outlook 2019 (AEO2019).

Source: US Energy Information Administration (EIA)

US crude oil production will set annual records through 2027 and remain above 14m bbl/day through 2040, according to the AEO2019 reference case.

Natural gas liquids (NGL) production will reach 6m bbl/day by 2029, and dry natural gas production will reach 43tr cubic feet (tcf) by 2050.

Liquefied natural gas (LNG) exports and pipeline exports to Canada and Mexico will increase until 2030 and then flatten through 2050.

“The US has become the largest producer of crude oil in the world, and growth in domestic oil, natural gas and renewable energy production is quickly establishing the US as a strong global energy producer for the foreseeable future,” said Linda Capuano, EIA administrator.

NATURAL GAS EXPORTS INCREASE THROUGH 2030

Low natural gas prices will keep the US competitive in North American and global markets.

The US became a net export of natural gas on an annual basis in 2017, and liquefied natural gas (LNG) export capacity will increase once construction projects are completed by 2022.

Asian demand growth will allow the US to remain competitive there. After 2030, more suppliers will enter the market, pressuring down prices and making US LNG export capacity expansion uneconomic.

More pipeline infrastructure to and within Mexico will increase US natural gas exports there. By 2030, domestic production in Mexico will displace US exports.

US natural gas exports to eastern Canada will increase because of its proximity to US resources in the Marcellus and Utica plays and additional pipeline infrastructure. US imports from western Canada will decline from historic levels.

ELECTRICITY FROM NATURAL GAS AND RENEWABLES EXPANDS

Low natural gas prices and higher renewable electricity generation have resulted in lower wholesale prices, changes in utilisation rates, as well as operating losses for coal and nuclear generators.

Natural gas will maintain its leading share of electricity generation, increasing from 34% in 2018 to 39% in 2050.

The share of renewable generation will rise from 18% to 31%, mostly driven by growth in wind and solar generation.

Coal generation will drop from 28% to 17%, while nuclear generation will decline from 19% to 12%.

END-USE ACTIVITIES GROW, ENERGY INTENSITIES DECREASE

Increasing energy efficiency across end-use sectors will keep US energy consumption relatively stable, even as the US economy continues to expand.

US energy consumption will expand across all major end uses, with electricity and natural gas growing the fastest.

The steepest decline in energy intensity will be the transportation sector. Energy used per highway vehicle mile travelled will decline by 32% from 2018 to 2050 amid stricter fuel economy and energy efficiency standards.

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