The US Energy Information Administration (EIA) has released its ‘Annual Energy Outlook 2018’ (AEO2018), which includes projections of US energy markets through 2050 based on a Reference case and a number of sensitivity cases.
The AEO2018 Reference case shows continued development of US shale and tight oil and natural gas resources coupled with modest energy consumption growth, leading to the transition of the US from a net energy importer to a net energy exporter.
The US has been a net energy importer since 1953, but the AEO2018 Reference case projects the US will become a net energy exporter by 2022. This transition occurs even earlier in some AEO2018 sensitivity cases that incorporate assumptions supporting larger growth in oil and natural gas production or that have higher oil prices.
In the ‘High Oil and Gas Resource and Technology’ case, favourable geology and technological developments increase oil and natural gas supply, leading to higher energy exports. In the ‘High Oil Price’ case, before 2040, economic conditions are more favourable for oil producers, supporting higher levels of exports and lower domestic consumption than in the Reference case. Exports decline after 2040 in this sensitivity case as a result of the lack of substantial improvements in technology.
The AEO2018 presents updated projections for US energy markets through 2050 based on the Reference case and six additional sensitivity cases: ‘Low and High Economic Growth’, ‘Low and High Oil Price’, and ‘Low and High Oil and Gas Resource and Technology’. The AEO2018 Reference case incorporates only existing laws and policies and is not intended to be a prediction of the future. The sensitivity cases incorporate different key assumptions that reflect market, technology, resource, and policy uncertainties that affect energy markets.
Other key findings include the following:
Increases in energy efficiency temper growth in energy demand throughout the Reference case projection
Energy consumption grows approximately 0.4% per year on average in the Reference case from 2017 to 2050, which is less than the rate of expected population growth (0.6% per year). Annual real gross domestic product (GDP) growth is expected to average 2% through 2050 in the Reference case.
Almost all new electricity generation capacity is fuelled by natural gas and renewables after 2022 in the Reference case
Natural gas prices are projected to remain lower than US$5/ million Btu until the very end of the projection period. The costs associated with adding new renewable electricity generation capacity are expected to continue declining, especially for solar photovoltaic systems.
Production of liquids and natural gas continues to grow for decades
In the Reference case, production of shale gas resources is projected to increase through 2050. US liquids production (mostly crude oil and petroleum products) begins to decline toward the end of the projection period as less productive areas are developed.
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/07022018/eia-releases-annual-energy-outlook/