[NEW YORK] The US will become a net energy exporter by 2029 as the development of crude supplies locked in shale formations bolsters oil production, the government said today.
US energy exports will exceed imports from 2029 through 2032, and from 2037 through 2040, the Energy Information Administration said Tuesday in its Annual Energy Outlook. The agency raised its oil output forecasts for 2025 and 2040, while cutting total energy demand estimates for the same years.
"Advanced technologies are reshaping the US energy economy," EIA Administrator Adam Sieminski said in an e-mailed statement. "With continued growth in oil and natural gas production, growth in the use of renewables and the application of demand-side efficiencies, the projections show the potential to eliminate net US energy imports in the 2020 to 2030 timeframe."
US crude output will total 10.3 million barrels a day in 2025 and 9.4 million in 2040, the EIA said. That's up from last year's forecast of 9 million barrels a day in 2025 and 7.5 million in 2040. The country pumped 7.4 million barrels a day in 2013. The agency also bolstered its estimates for natural-gas liquids production over the period.
Horizontal drilling and hydraulic fracturing, or fracking, have unlocked supplies in shale formations in North Dakota, Texas and other states. The rise in production over the past year and the continuing development of "sweet spots" in fields under development accounted for part of the increase in the long-term reference case, the EIA said.
ConocoPhillips and Exxon Mobil are making shale in the central US a major focus as oil companies adapt to market conditions that require the ability to ramp up or cut back drilling swiftly. Conoco CEO Ryan Lance has pledged to spend 50 per cent more over the next three years, primarily in the US and Canada, even as crude prices fell by more than half.
Exxon CEO Rex Tillerson said in March that the global energy giant will double the amount of oil it pumps from US shale fields during the next three years. Decades after quitting many US fields to pursue bigger reserves from the Middle East to the North Sea, Exxon now sees its US assets as its most reliable cash engines.
West Texas Intermediate oil for May delivery rose US$1.31, or 2.5 per cent, to US$53.22 a barrel at 11:41 a.m. today on the New York Mercantile Exchange. Futures slipped to US$42.03 on March 18, the lowest level since March 2009. The US benchmark oil is down 49 per cent from a year earlier.
The EIA raised its demand forecast for liquid fuels such as gasoline and diesel through 2040 while trimming its estimate for natural-gas consumption. Residential electricity use projections were reduced as increased building-efficiency standards and lighting regulations were taken into account.