EIA’s Outlook: Natural Gas and Oil Remain Integral to U.S.
Posted February 5, 2020
The federal government’s latest energy projections are out, and they portray a U.S. energy future that continues to be driven by natural gas and oil.
It’s a future noteworthy for continued production growth, greater efficiency, the U.S. as a net energy exporter and emissions progress. All are connected in various ways to shale reserves and safe, modern hydraulic fracturing – and at risk if fracking were banned as some have advocated.
Americans understand how far the United States has come in the past decade and a half, thanks to shale and hydraulic fracturing, helping advance the goal voiced by U.S. presidents since Jimmy Carter of seeing this country end its reliance on foreign energy. Indeed, in December the U.S. Energy Information Administration (EIA) confirmed the United States as a net exporter of energy in total for the first time since the 1950s.
This is an historic sign of new U.S. global energy leadership, and it shouldn’t be thrown away with foolish policy choices.
Now, some highlights from EIA’s Annual Energy Outlook 2020:
EIA projects the U.S. will continue to produce historically high levels of natural gas and crude oil. U.S. oil production reaches 14 million barrels per day by 2022 and remains near that level through 2045. EIA’s chart:
As the graphic shows, this production growth is directly tied to energy that’s developed from shale and other tight-rock formations. By 2050, tight oil produced with fracking accounts for 73% of total U.S. oil production. Similarly, by 2050, natural gas developed from shale with fracking accounts for 91% of total U.S. natural gas production. This is reflected in the following two charts:
EIA says this production, coupled with slower growth in domestic demand, will lead the U.S. to increase its exports of crude oil, petroleum products and liquefied natural gas (LNG). The U.S. becomes a net exporter of petroleum by volume after 2020:
EIA projects the U.S. will export more petroleum and other liquids than it imports annually starting this year, with domestic production continuing to rise and decreased domestic consumption of petroleum products. EIA says net exports of U.S. petroleum and petroleum products peak at 3.73 million barrels per day in 2033 before gradually declining as domestic consumption rises.
The U.S. became a net natural gas exporter on an annual basis in 2017, exporting more natural gas than it imported in 2018 and last year. EIA projects U.S. LNG exports to more distant destinations will increasingly dominate the U.S. natural gas trade, and the United States is projected to remain a net natural gas exporter through 2050. Below, EIA’s chart:
EIA Administrator Linda Capuano:
“With continued technologically enabled growth in domestic oil and natural gas production, we see the United States remaining a net exporter of energy for some time.”
EIA’s reference case assumes trend economic growth over the forecast period – and with it, corresponding efficiency improvements through technological change and demand for energy from the industrial and transportation sectors. That’s the context for EIA’s projection of an uptick in U.S. energy-related carbon dioxide emissions in the 2030s. The overall perspective is that by 2050, EIA says, these emissions still will be 4% lower than 2019 levels. EIA’s infographic:
In the electric power sector, CO2 emissions decline through the 2020s largely because coal continues to decline as a fuel for generation. Emissions from the sector, with natural gas playing a leading role, are relatively flat out to 2050.
Many of these data points underscore the reality of American global energy leadership. Again, this is leadership that would suffer a heavy blow if hydraulic fracturing were banned. Mike Sommers, API president and CEO:
For decades, American presidents across the political spectrum have outlined their policy proposals to Congress at the State of the Union. Ideologies come and go with each transition of power. But every president from Jimmy Carter to Donald Trump has agreed that affordable, reliable, and homegrown energy is essential to the country’s economic growth, national security, and overall prosperity. … To further develop our energy resources and strengthen environmental performance, it’s imperative that the White House and Congress prepare for the projected growth in global energy demand with forward-looking policies that support safe and responsible natural gas and oil production.
About The Author
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Previously, Mark was a reporter, copy editor and sports editor at an assortment of newspapers. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela have two grown children and six grandchildren.