Energize Weekly, February 14, 2018
Oil, natural gas liquids and natural gas production are all projected to grow steadily over the next five years, with oil and gas liquids leveling off and natural gas continuing to climb slowly, according to the federal Energy Information Administration (EIA).
Oil production has already surpassed the 9.6 million barrels a day record set in 1970. The EIA’s 2018 Annual Energy Outlook projects it continuing to climb before leveling off between 11 and 12 million barrels a day.
Natural gas liquids production reaches 5 million barrels a day in 2023, nearly 35 percent above 2017 levels, as a result of continued development of tight oil and shale gas resources.
Natural gas production increases 6 percent a year from 2017 to 2020. After 2020, it slows to less than 1 percent a year for the remainder of the projection, which runs to 2050.
Nevertheless, by 2050, natural gas accounts for the largest share of energy production, about 45 quadrillion British thermal units (BTUs), 90 percent more than oil and condensate, and three times as much as renewable energy other than hydropower.
These forecasts are based on EIA’s “reference case,” which assumes continuing current trends in technological improvement, economics and demographics. The reference case also assumes current laws and regulations impacting the energy sector, including sunset provisions in some laws, are unchanged.
The High Oil and Gas Resource and Technology case reflects lower costs and higher resource availability. The Low Oil and Gas Resource and Technology case assumes lower resources and higher costs. EIA also ran “high growth-low growth” and “high oil price-low oil price” scenarios.
The U.S. is a net-energy exporter in all scenarios except in the high economic growth and High Oil and Gas Resource and Technology cases.
In the High Oil and Gas Resource and Technology case, exports reach 30 quadrillion BTUs, equal to 5,100 barrels of oil.
“After 2020, natural gas production grows at a higher rate than consumption in all cases except in the Low Oil and Gas Resource and Technology case, where production and consumption remain relatively flat as a result of higher production costs,” the Outlook said.
Total liquids production varies widely under the different scenarios. In the high growth and low oil price cases, petroleum product consumption increases. It remains flat or decreases in the other cases through 2050.
Tight shale plays in the lower 48 states remains the leading source of U.S. crude oil production from 2017 to 2050 in the reference case and across all the other scenarios. These plays account for 65 percent of cumulative production during the period.
The production growth comes mainly in the Permian Basin in the Southwest, which includes many shale plays including Bone Spring, Spraberry, and Wolfcamp. In the Dakotas, increasing production is centered on the Bakken and in the Rocky Mountain region on the Niobrara.
Gulf Coast region production increases through 2025 and then flattens out as drilling in the Eagle Ford becomes less productive.
