By 2040, the U.S. Department of Energy forecasts that the net import share of U.S. energy consumption will only be 4 percent. This means that the U.S. is almost breaking even in terms of U.S. energy imports vs. exports. Although the country still will skews on the side of imports, the percentage is significantly less than it was in 2012 — when it had net imports of 16 percent — and even 2005 — when it had net imports of 30 percent.
The DOE’s Energy Information Administration reported its predictions about the future of U.S. energy production and use in an early preview of its Annual Energy Outlook 2014.
Besides predicting that the energy trade balance is tipping more in the U.S.’ favor, the EIA report said imported fuels will drop dramatically in the U.S. This will primarily be an effect of increases in U.S. energy production and technological improvements in energy efficiency.
Domestic production of crude oil is expected to reach close to historic highs in 2016, according to the report. In 2016, the EIA expects the U.S. to produce 9.5 million barrels per day of crude oil, incredibly close to the historical high of 9.6 million barrels per day reached in 1970. Between 2016 and 2020, domestic crude oil production is expected to increase further, but after 2020, it will begin to decline, the EIA reports.
Production of natural gas, on the other hand, will see consistent growth through 2040. The EIA predicts natural gas production will increase 56 percent between 2012 and 2040, at which time production will be around 37.6 trillion cubic feet.
The influx of natural gas production will not only lead to increased exports of liquefied natural gas, but it will also lead to more industrial production. Considering that the industrial sector — which includes manufacturing, agriculture, construction and mining — used one-third of U.S. energy delivered in 2012, this sector will profit immensely by having more domestic energy sources. The bulk chemicals segment that consumes the most energy is already taking advantage of this domestic energy and is expanding production.
Interestingly, at the same time that more energy is being produced in the U.S. and used by the industrial sector, the EIA says that carbon dioxide emissions are not expected to rise beyond what they were in 2005. By 2040, improvements in technology should allow for emissions to be 7 percent below the 2005 level. The decline can be partially attributed to the declining demand for coal as other sources of power become more popular.
All of this means good news for Houston — for the oil and gas production companies that are headquartered here, the chemical companies that are expanding their production along the Houston Ship Channel and manufacturers reliant on stable energy sources to keep their plants running.
Houston Business Journal
By: Molly Ryan