Supplies of crude oil and natural gas are expected to soar over the next four years, while energy demand in the U.S. remains modest, according to the Energy Information Administration’s 2018 annual energy outlook released Tuesday.
"The reference case projects that the U.S. will become a net energy exporter by 2022," which "reverses a near 70-year trend when the U.S. became a net energy importer in 1953," said newly appointed EIA Administrator Linda Capuano in unveiling the 2018 annual projections at a conference in Washington.
The key finding of the report is based on the prevailing trend of energy production going up as domestic energy demand drops through the next decade, according to Capuano. While the U.S. gross domestic product is expected to hover around 2 percent by 2050, energy consumption grows by about 0.4 percent per year on average from 2017 to 2050. This is a result of increases in energy efficiency that tempers growth in energy demand through 2050.
The report “shows continued development of U.S. shale and tight oil and natural gas resources paired with modest energy consumption growth, leading to the transition of the United States from a net energy importer to a net energy exporter,” according to an EIA summary. Natural gas and oil production will continue to grow even further out in the future, with production projected to still be increasing through the 2040s to 2050 before tapering off.
That data could back up the Trump administration’s goal of exporting more of America’s natural resources while looking for way to increase production under its "energy dominance" agenda.
The U.S. is already a net exporter of natural gas, shipping out more than it brings in from other countries. But that trend is expected to extend to oil in the next four years. However, the EIA projections also said the U.S. could speed up its becoming a net exporter of oil before 2022 if it ratchets up production.
“The United States has been a net energy importer since 1953, but the [outlook’s] reference case projects the United States will become a net energy exporter by 2022,” it reads. “This transition occurs even earlier in some [the 2018 outlook's] sensitivity cases that incorporate assumptions supporting larger growth in oil and natural gas production or that have higher oil prices.”
Capuano noted higher oil prices would spur production in the U.S. to even greater levels leading to greater levels of petroleum exports and the U.S. becoming both an oil and natural gas net export ahead of the 2022 base case projection.
"We also see that the export transition could occur earlier with increased production in the high oil price and high resource and technology development cases," said Capuano.
She said lower oil prices and technology development cases "could cause it not to occur at all," where U.S. does not become a net exporter of oil.
At the same time, the new 2018 projections show renewables and natural gas will make up all new generating resources of electricity in the U.S. after 2022, with no new coal plants on the horizon.
"This is the result of natural gas prices that remain below $5/million British thermal units until the very end of the projection period and the continued decline in the cost of renewables, especially solar photovoltaic," according to the agency.