EIA Sees Continued US Energy Growth
The US Energy Information Administration (EIA), in its Annual Energy Outlook 2019 released January 24, is projecting robust energy growth in the US, led by shale and tight oil and natural gas and renewables.
In its Reference case (there are also six side cases which examine the robustness of certain assumptions), the EIA projects the US will be a net energy exporter in 2020 – for the first time in more than 70 years – and will remain so through 2050. The export growth is driven largely by crude oil and products, but also reflects additional exports of LNG.
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“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” EIA administrator Linda Capuano said. “For example, the US produced almost 11mn b/d of crude oil in 2018, exceeding our previous 1970 record of 9.6mn b/d.”
Dry natural gas production, meanwhile, is projected in the Reference case to reach 120bn ft3/day by 2020, from about 90bn ft3/day in 2018.
Growth in drilling in the southwest region – primarily the Permian Basin in Texas – also drives natural gas production from tight oil formations in the Reference case. Because drilling activity in oil formations primarily depends on crude oil prices rather than natural gas prices, the increase in natural gas production from oil-directed drilling puts downward pressure on natural gas prices.
Sustained low natural gas prices and declining costs of renewable power enable the shares of electricity generated by natural gas and renewables to increase. The natural gas share increases from 34% in 2018 to 39% in 2050, while the renewables share increases from 18% in 2018 to 31% in 2050. Most renewables growth comes from solar photovoltaics, which increases from about 750bn kWh in 2018 to more than 1,600bn kWh in 2050.