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.
It matters not; no human enterprise continues without end.
Sorry if the conversation wasn’t clear to you. We were talking about years not centuries or geoligical eons.
It’s a renewable resource, it will continue as long as we want it. There’s no shortage of the stuff, anything else and people are lying. Maybe demand tapers off, but for shortages that’s a big negative.
there were no internationals involved
Again, you are confusing oil production companies with well service companies.
...........
exxon is heavily into downstream operations like refining but they only bought an upstream driller xto in 2010
I am talking about the companies the producers hire to do much of the hydraulic fracturing work. These are not companies that own oil wells.
Companies like Halliburton, Schlumberger, Weatherford, etc. That is where most of the expertise exists and these companies already work internationally.
Hopefully it will be just enough to get us to the point where other energy tech will be mature and won’t leave us venerable.
Yup and the Maverick, brand new.
So the growth rate would flatten out ( maybe, maybe not ), but actual production would still remain healthy ?
Those OCTOPAD oil rigs just give me the warm fuzzies.... love it, productive production.
They had lots of minivans back then.
In 1975? Not in my neck of the woods.
There’s always the envy factor but most of the new production is from private land so the US government can butt out.
See the chart in post #60
>> mini-vans <<
Well, they started making them in the late forties and continued to this very day.
Then in about 1960, the Econoline appeared on the scene with a 144 CID L6 (2.4L) engine, along with the Chevy Greenbriar with the air-cooled H6 rear engine setup.
Then all hell broke loose and everyone got in on the act.
>> Not in my neck of the woods. <<
What, they don’t have car dealerships where you live?
Did we have car dealerships? Yes
Were the lots full of minivans and SUV’s?. No
Were minivans available in 1975? Sort of - Although the actual term ‘Minivan’ was not widely used until 1984.
Were they widely marketed, or have more than a minimalistic market share? No. Not before 1984.
You’ve got to love the internet - one off-handed comment on how we used to travel in much more cramped quarters is almost guaranteed to draw a know it all comment on the history of minivans. I assure you, I was not living in a parallel universe in 1974, where were the only people who did not own a minivan...most people had a car or a station wagon, a few suburbans were around, some had full sized vans....but no, everybody in the neighborhood most certainly did not own a Chevy Greenbriar (sic).
No, a lot of them owned a VW bus however.
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