Posted May 17, 2016
The United States in 2040 will be more energy self-sufficient, a net energy exporter and a lower source of energy-related carbon emissions as clean-burning natural gas becomes the dominant fuel for generating electricity. The leading energy source 24 years into the future – as they are now – will be oil and natural gas.
So projects the U.S. Energy Information Administration (EIA) in an early look at select data from EIA’s Annual Energy Outlook 2016 report that’s scheduled for full release in July.
The main takeaway from EIA’s “sneak preview” is the importance of the U.S. energy revolution – primarily oil and natural gas developed from shale and other tight-rock formations using safe hydraulic fracturing and modern horizontal drilling. The United States is stronger now and will be in the future thanks to domestic energy from fracking.
EIA’s early release includes two projections – a reference or baseline estimate (given known technologies and demographic trends) that assumes compliance with the Obama administration’s proposed Clean Power Plan (CPP), and a business-as-usual trend estimate that assumes the CPP isn’t implemented. Focusing on projections that include CPP implementation, let’s take a spin through the early release highlights.
Energy Use – EIA projects that oil and natural gas will be our country’s leading fuel sources in 2040, with petroleum and other liquids supplying 35.02 percent of our energy and natural gas supplying 33.03 percent – totaling 68.05 percent.
That’s virtually the same share oil and natural gas supplied in 2015 (66.99 percent):
Oil Production – EIA projects that domestic crude output will rise above the previous historical high of 9.6 million barrels per day in 1970 before 2030, reaching 11.3 million barrels per day by 2040.
Natural Gas Production – EIA projects natural gas output will exceed domestic consumption, making the U.S. a net exporter of gas in the very near future.
- Natural gas production growth is driven by the continued development of shale gas, EIA projects, with improvements in technology resulting in higher rates of recovery at lower costs. Shale natural gas is projected to remain the dominant source of U.S. natural gas growth.
Net Imports – U.S. net energy imports continue to decline, reflecting increased oil and natural gas production here at home, coupled with relatively flat demand:
- EIA projects the share of net imports in total U.S. liquids use will be 7 percent in 2040 (chart) – remarkable considering the share was 24 percent in 2015 and 60 percent in 2005, just a little more than a decade ago.
- Overall net energy imports – including petroleum and other liquids, natural gas and coal – decline and ultimately end in EIA’s reference case, a first since the 1950s.
U.S. Energy Exports – EIA projects domestic energy production will exceed consumption, making the United States a net energy exporter – a net natural gas exporter before 2020, largely through the growth of liquefied natural gas (LNG) exports.
- By 2040, total U.S. energy production is projected to be greater than total U.S. energy consumption, allowing for U.S. net energy exports equal to 4 percent of total consumption.
Carbon Emissions Reductions – Energy-related CO2 emissions are lower in 2040 – even without the CPP.
- Key drivers for the lower energy-related CO2 emissions projections include lower natural gas prices that support higher electricity generation from natural gas – again, with or without the CPP.
Electricity Generation – The CO2 projection above reflects EIA’s estimate that the share of power generated from clean-burning natural gas will increase from 33 percent in 2015 to 38 percent in 2040, making it the leading fuel for power generation.
More to come when EIA releases the full Annual Energy Outlook 2016 report in July. Still a developing picture emerges – one of greater opportunities for the United States because of projected domestic energy production.
That’s opportunity for greater energy security, increased trade, consumer benefits and progress toward climate goals. Critically important in this election year is choosing candidates who will support policy paths that sustain and grow the ongoing energy revolution –including increased access to energy reserves, as well as sound regulatory approaches and sensible leasing and permitting rules that avoid needlessly hindering energy development.
ABOUT THE AUTHOR
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.