WASHINGTON (MNI) – The following are excerpts from the Energy
Information Administration’s Annual Energy Outlook released Monday:
Domestic crude oil production increases
Domestic crude oil production has increased over the past few
years, reversing a decline that began in 1986. U.S. crude oil production
increased from 5.0 million barrels per day in 2008 to 5.5 million
barrels per day in 2010. Over the next 10 years, continued development
of tight oil, in combination with the ongoing development of offshore
resources in the Gulf of Mexico, pushes domestic crude oil production
higher.
Because the technology advances that have provided for recent
increases in supply are still in the early stages of development, future
U.S. crude oil production could vary significantly, depending on the
outcomes of key uncertainties related to well placement and recovery
rates. Those uncertainties are highlighted in several cases completed as
part of AEO2012 and discussed in an article examining impacts of
uncertainty about current estimates of the crude oil and natural gas
resources.
With modest economic growth, increased efficiency, growing domestic
production, and continued adoption of nonpetroleum liquids, net imports
of petroleum and other liquids make up a smaller share of total U.S.
energy consumption
U.S. dependence on imported petroleum and other liquids declines in
the AEO2012 Reference case, primarily as a result of rising energy
prices; growth in domestic crude oil production to more than 1 million
barrels per day above 2010 levels in 2020; an increase of 1.2 million
barrels per day crude oil equivalent from 2010 to 2035 in the use of
biofuels, much of which is produced domestically; and slower growth of
energy consumption in the transportation sector as a result of existing
corporate average fuel economy standards.
Proposed light-duty vehicle fuel economy standards covering vehicle
model years 2017 through 2025, which are not included in the Reference
case, could further reduce demand for petroleum and other liquids and
the need for imports, and increased supplies from U.S. tight oil
deposits could also significantly decrease the need for imports as
examined in several cases in AEO2012.
Natural gas production increases throughout the projection period,
allowing the United States to transition from a net importer to a net
exporter of natural gas
Much of the growth in natural gas production in the AEO2012
Reference case results from the application of recent technological
advances and continued drilling in shale plays with high concentrations
of natural gas liquids and crude oil, which have a higher value than dry
natural gas. Shale gas production increases in the Reference case from
5.0 trillion cubic feet per year in 2010 (23 percent of total U.S. dry
gas production) to 13.6 trillion cubic feet per year in 2035 (49 percent
of total U.S. dry gas production). As a result of the projected growth
in production, U.S. natural gas production exceeds consumption early in
the next decade in the Reference case. The outlook reflects increased
use of LNG in markets outside North America, strong growth in domestic
natural gas production, reduced pipeline imports and increased pipeline
exports, and relatively low natural gas prices in the United States.
When looking forward to 2035 there are unresolved uncertainties
surrounding the technological advances that have made shale gas
production a reality. The potential impact of those uncertainties
results in a range of outcomes for U.S. shale gas production from 9.7 to
20.5 trillion cubic feet per year when looking forward to 2035. Those
uncertainties and their impact are examined in several cases that are
summarized in an article in AEO2012.
** MNI Washington Bureau: 202-371-2121 **
[TOPICS: M$U$$$,MI$OI$,MAUDS$,MGU$$$]
