The US Energy Information Administration (EIA) has released its Annual Energy Outlook 2019 report, which projects significant development of US petroleum and natural gas resources.
The Annual Energy Outlook 2019 notes that the production of petroleum, natural gas and other natural gas plant liquids has continued to grow over the projection period as a result of further development of tight oil resources. Production is projected to increase through 2022 for all types of oil, with crude oil expected to exceed its previous peak 1970 level.
Annual Energy Outlook 2019 contains a reference case to demonstrate EIA’s key assumptions. The report says that “oil and natural gas resource discoveries in deepwater in the Gulf of Mexico lead Lower 48 states offshore production to reach a record 2.4 million bpd in 2022”, and crude oil production continues to grow through 2030, plateauing at 14 million barrels per day (bpd) until 2040.
Consumption of oil is projected to drop below its 2004 peak level through 2050 in most cases. The EIA notes that “consumption of petroleum and other liquids is less sensitive to varying assumptions about resources, technology, and oil prices”, predicting that consumption could increase in cases of high economic growth and low oil prices.
As a result of this high production and low consumption, the US is expected to become a net exporter of petroleum on a volume basis from 2020 to 2049.
The US southwest is expected to be a consistent and significant leader in the production of oil and natural gas, with projected highs of over 5 million bpd in petroleum and over 4 million bpd in natural gas.
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Natural gas production is also expected to experience production growth, with the largest production increase of all fossil fuels during the projection period. The EIA notes that this increase is a result of “combined development of tight and shale resources”, which account for nearly 90% of dry natural gas production in the US.
While onshore production of natural gas is predicted to eventually decline through 2050, offshore natural gas production in the US remains nearly flat during the projection period, as production from new discoveries generally offsets declines.
This growth in natural gas production is to support increasing domestic consumption, particularly in electric and industrial power sectors. Conversely, consumption in commercial and residential sectors remains relatively flat across the projection period.
The EIA added: “The United States has been a net energy importer since 1953, but continued growth in petroleum and natural gas exports results in the United States becoming a net energy exporter by 2020 in all cases.”