The U.S. Energy Information Administration issued a 20-page overview of its Annual Energy Outlook 2014. The final report which analyzes US energy supply, demand and prices through 2040 will be released in spring 2014. The report confirms that hydraulic fracturing and horizontal drilling are driving the current oil and natural gas boom.
It is anticipated that there will be a spike of 800,000 barrels a day in domestic crude oil production in 2014. By 2016, crude oil production will increase to nearly the 9.6 million barrels per day achieved in 1970. “While domestic crude oil production is expected to level off and then slowly decline after 2020…, natural gas production grows steadily with a 56% increase between 2012 and 2040, when production reaches 37.6 trillion cubic feet (Tcf).”
Additional key findings in the overview include:
- Low natural gas prices are projected to continue due to increased production.
- By 2040, natural gas will overtake coal to provide the largest share of US electric power generation.
- With the strong growth in domestic crude oil and natural gas production, US reliance on imported fuels will fall sharply between 2014 and 2040.
- Improved efficiency of energy use in the residential and transportation sectors and a shift away from carbon-intensive fuels for electricity generation keep US energy-related carbon dioxide emissions below their 2005 level through 2040.
- The pace of oil-directed drilling in the near term is much stronger than in the 2013 outlook, as producers locate and target the sweet spots of plays currently under development and find additional tight formations that can be developed with the latest technologies.
- Cumulative production of dry natural gas from 2012 to 2040 is about 11% higher than in 2013, primarily reflecting continued growth in shale gas production resulting from hydraulic fracturing and horizontal drilling. Another contributing factor is ongoing drilling in shale and other plays with high concentrations of NGL and crude oil, which in energy-equivalent terms have a higher value than dry natural gas.
- The US becomes a net exporter of LNG in 2016.