The Annual Energy Outlook 2014 (AEO2014) reference case from the US EIA has presented updated projections for the US energy markets to 2040.
Domestic oil and gas production on the up
In the reference case for AEO2014, domestic US crude oil production increases sharply with a growth level of 0.8 million bpd through 2016, when domestic production comes close to the historical high of 9.6 million bpd that was hit in 1970. After 2020, US crude production is expected to level off and then slowly decline in the reference case. Natural gas production is expected to grow steadily at 56% from 2012 to 2040 and reach a production level of 37.6 trillion ft3.
Natural gas prices
Low natural gas prices are expected to boost natural gas intensive industries. In AEO2014, industrial shipments are expected to grow at 3%/y over the first 10 years of the projection period and then slow to 1.6% for the remaining time. Bulk chemicals and metals based durables account for much of the increased growth in industrial shipments. Industrial shipments of bulk chemicals will benefit from an increased supply of natural gas liquids and grow by 3.4% /y from 2012 – 2025. However, it is reported that the competitive advantage in bulk chemicals will diminish in the long term. Industrial gas consumption is expected to grow by 22% from 2012 to 2025.
A higher natural gas production level stated in the AEO2014 is expected to support increased exports of both pipeline and liquefied natural gas. In addition to increases in domestic consumption in the electric power sectors, US exports of natural gas also increase in the reference case. US exports of LNG are expected to increase to 3.5 trillion ft3 before 2030 and remain at that level to the end of the projection period. Exports of US natural gas via pipeline to Mexico is expected to grow by 6% /y, from 0.6 trillion ft3 in 2012 to 3.1 in 2040. Pipeline exports to Canada are expected to grow by 1.2% /y, from 1 trillion ft3 I n2012 to 1.4 trillion ft3 in 2040. Over the same period, US pipeline imports from Canada are expected to fall by 30%, from 3 trillion ft3 in 2012 to 2.1 trillion ft3 in 2040, as more US demand is met by domestic production.
Transportation energy use
According to the AEO2014, car and light trucks energy use will decline sharply, reflecting slow growth in travel and accelerated vehicle efficiency improvements. The AEO2014 includes a new and detailed demographic profile of driving behaviour by age and gender as well as new population growth rates. Annual increased in vehicle miles travelled (VMT) in light duty vehicles (LDV) average 0.9% from 2012 – 2040, compared to a 1.2% level in the previous AEO. Rising fuel economy of LDVs more than offset the modest growth in VMT, resulting in a 25% decline in LDV energy consumption decline between 2012 and 2040.
Adapted from press release by Claira Lloyd
Read the article online at: https://www.oilfieldtechnology.com/exploration/27122013/us_energy_economy_part_1/