From the source report, click chart for link
Posted on 12/17/2013 4:53:57 AM PST by thackney
U.S. oil production is on track to reach a near historic high by 2016, before leveling off and eventually beginning to taper in 2020, according to a new federal forecast.
The nation’s crude output will crest at 9.5 million barrels per day in 2016, according to the U.S. Energy Information Administration’s latest annual energy outlook, released Monday. The United States hit its peak oil production in 1970, with 9.6 million barrels of crude harvested daily.
Advancements in oil field technology — particularly the combination of horizontal drilling and hydraulic fracturing, or fracking — have helped reverse years of declining oil production in the United States.
Growing U.S. oil production will have an impact on global crude oil prices. The spot price for Brent crude, the international benchmark, is set to decline to $92 per barrel (in 2012 dollars) in 2017, down from $112 per barrel a year ago, according to the EIA.
But after 2017, the agency predicts the price for Brent crude oil will start climbing, ultimately reaching $141 per barrel in 2040, as the oil industry tries to meet growing demand by developing more costly resources.
Rising gas price
Natural gas production also will rise, despite the precipitous decline in its domestic price during the early shale gas boom. The price will remain low enough to propel domestic chemical and metal manufacturing, even as companies sell more of the U.S. harvest overseas, the EIA forecasts.
The Henry Hub natural gas spot price, the U.S. benchmark, will rise to $4.80 per million British thermal units in 2018, according to the EIA outlook. That’s 77 cents higher than the agency predicted last year for 2018, and about 60 cents higher than current prices.
Ultimately, by 2040, the EIA expects natural gas to sell for $7.65 per million Btu.
The federal agency said the price hike will be driven by “faster growth of consumption in the industrial and electric power sectors and, later, growing demand for export at liquefied natural gas facilities.”
Exporting US gas
The EIA is the statistical arm of the U.S. Department of Energy. Its predictions could help color the department’s decisions on nearly two dozen pending applications to export liquefied natural gas to countries that do not have free trade agreements with the United States. The Energy Department already has granted five LNG export licenses.
U.S. exports of liquefied natural gas are expected to climb to 9.6 billion cubic feet per day before 2030 and then remain at that level through 2040, according to the EIA.
But critics in Congress and the manufacturing sector want the Obama administration to slow down on natural gas exports and consider the new forecasts before granting any more.
Industry forecast: Exxon expects fossil fuels to reign supreme
The risk, they say, is that by boosting demand, too many foreign sales of U.S. natural gas could hike domestic prices for the fossil fuel, blunting the profit margin for manufacturers that use the substance as a chemical building block and causing higher electric bills for all consumers.
But the EIA’s new outlook, which is based on current policies only, suggests that natural gas-intensive industries still will benefit from rising U.S. production. The agency expects the domestic natural gas price to stay relatively low, compared to international prices, as U.S. production climbs to 37.6 trillion cubic feet annually by 2040 from about 29.5 trillion cubic feet last year.
Growing demand
The agency forecasts shipments of industrial goods will grow 3 percent annually for a decade before slowing to 1.6 percent in annual growth, largely driven by low natural gas prices. And shipments of bulk chemicals that benefit from a bigger supply of natural gas liquids are set to grow 3.4 percent each year from 2012 to 2025, EIA says.
More natural gas demand is set to come from power utilities, too, as electric companies slowly move to the fossil fuel as a replacement for coal. The EIA expects electricity generated from natural gas to surpass coal-based power for the first time around 2034.
In making its predictions, the EIA also now assumes that liquefied natural gas could make up 35 percent of the fuel used by freight rail locomotives by 2040 and supply some domestic marine vessels.
Other projections
In a change from last year’s prognostications, the agency now believes that renewable fuels will provide a greater share of electricity by 2040.
Total U.S. energy consumption will grow by just 12 percent between 2012 and 2040. But consumption of petroleum-based liquid fuels will fall during that time span as a result of greater vehicle efficiency.
Energy use by cars and light trucks will decline sharply. Vehicle efficiency improvements will more than make up for the slight climb in overall miles traveled in these light-duty vehicles. Light duty vehicle energy consumption is set to decline 25 percent between 2012 and 2014.
Much of the Hydraulic Fracturing work is actually done by International Firms like Halliburton. The small independents that have driven this growth are typically not doing the fracturing themselves.
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No this is dead ass wrong. I’m shocked that you would say this. The internationals have been late to the party. They have only managed to get in by buying their way in. Fracking has been driven entirely by second tier American drillers.
Now I have to test you. What do you know about continental resources.
Halliburton has been doing hydraulic fracturing since the 1940s.
Tell what company you think does more hydraulic fracturing jobs per year.
We had one :(
I remember it constantly smelled like the belts were melting. And, for some reason, the hubcaps would fly off at the slightest bump. My brother and I took turns chasing after the hubcaps. The armrest fell off, the window crank handle broke, the heater occasionally worked.
In today’s minivan and SUV world, its hard to comprehend that our family of five would take thousand mile trips in that car.
I believe you are confusing oil production companies with well service companies.
Hydraulic Fracutring is typically done by a well service company hired to treat a well owned by the oil production company.
Halliburton has been doing hydraulic fracturing since the 1940s.
Tell what company you think does more hydraulic fracturing jobs per year.
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what country are you from?
Brought to you by the federal government - the institution that hasn’t been right about anything in recorded history!
We all know that production is a function of price. Oil recovery is a function of return on investment. As the price rises, alternatives become more viable. For example, if the major railroads switch over to using natural gas to power their electric locomotives, then the demand for diesel fuel goes down fairly significantly. They are the biggest user of diesel fuel in North America other than the US Navy. This is something the BNSF is exploring right now. If they switch, so will the UP, NS , CSXT, CN and CPRS.
Also, over the next few years we are going to see more trucking companies and local delivery companies switch over to natural gas. FedEx and UPS are already switching over. Bus companies are switching over. The postal service SHOULD switch over. It all comes down to one thing: MONEY. Is this going to increase our profit margin.
I was born in the US and most of my work has been in the US. But I have done some international oil production work, none lately.
Cruz and Palin will extend this boom deep into this Century and are any of you as sick as I am of these communist vermin and their printed lies?
It will be manmade unlike Global Warming.
This is very helpful (at least for me hopefully for others). Thanks for posting.
I have been seriously considering purchasing an electric car (all electric not hybrid) in the last month. This is/was mainly predicated on a belief I have had that the domestic oil production “bubble” would pop in the next year or so.
Now, it seems even the Feds say it will not only continue but increase up to at least 2017, with significant impacts on the price not seen until 2020. And that’s the Fed estimate, with all implied EPA agendas known. The truth of the matter is there will probably be abundant domestic oil for quite some time to come.
No sense in getting an electric car now.
Halliburton has been doing hydraulic fracturing since the 1940s............
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Yes hydraulic fracturing as been done since the 1940’s.
However the combination of hydraulic fracturing and horizontal drilling has only been done since about 2001. It was developed for natural gas in the barnet formation in Texas and then ported to Marcellus formation in PA in 2006 by purely regional American players. About 2008-9 they started experimenting with fracking oil. there were no internationals involved.
I speaking of growth rate, not absolute production.
Horizontal drilling, a very separate job from hydraulic fracturing, is also older than the shale production and not limited to the use of tight formations. We did a lot of that in Alaska to limit the production pad size while covering a far larger area underground.
About 2008-9 they started experimenting with fracking oil
You are several decades behind.
http://www.spe.org/jpt/print/archives/2010/12/10Hydraulic.pdf
Again, you are confusing oil production companies with well service companies.
When you look at the report, here is the rest of the story:
In its new long-range forecast, the Energy Information Administration projects that while wind, solar, hydropower and biomass will grow significantly over the next three decades, those renewable energy sources still will make up just a sliver — 16 percent — of the nation’s electricity by 2040.
That is higher than renewable power’s 12 percent contribution in 2012, with the EIA crediting the projected growth to federal tax credits, state mandates and, eventually, relatively low cost.
It would be interesting to learn what assumptions the EIA is making about population growth and what the impact would be if the Gang of 8 amnesty bill passes. It would almost triple legal immigration over the next 10 years to 33 million and we would be also importing 1.4 million guest workers annually.
I was born in ‘77 but I am familiar with the Pinto Pony and the Mercury version (Bobcat). When I met my wife in 1997 she was driving the cheapest version of the Ford Escort called a Pony. She still misses that car, mostly because it was a 5-speed.
From the source report, click chart for link
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