| NEW YORK
NEW YORK Dec 16 U.S. crude oil production will
surge faster than expected to a near historic high by 2016,
according to the Energy Information Administration (EIA), which
sharply raised its annual output forecasts on Monday due to the
breakneck speed of shale oil development.
The EIA's forecasts show that shale will help oil output in
the world's largest consumer increase by 800,000 barrels per day
(bpd) every year until 2016, when it will total 9.5 million bpd,
just below a 1970 record of 9.6 million bpd. That is some 2
million bpd higher than its forecast in last year's Annual
The agency maintained its view that output will start to
decline after that, but said production would still be above 9
million bpd in 2025 - a million barrels a day more than current
production. And the United States would be pumping 7.5 million
bpd in 2040, more than last year's 6.1 million bpd forecast.
Crude oil production exceeded 8 million bpd in November for
the first time in over two decades.
The higher production will also help tamp down global
benchmark Brent crude oil prices, which are now expected to fall
to a low of $92 a barrel (in 2012 prices) in 2017, before
resuming a rise to $141 in 2040. Last year the EIA forecast a
decline to as low as $96 (in 2011 prices) in 2015.
MORE NATURAL GAS
The EIA raised its forecast on natural gas production, also
undergoing a shale renaissance, to 31.9 trillion cubic feet
(tcf) by 2025 from the 28.7 tcf it had forecast last year, and
to 37.6 tcf by 2040 against the 33.2 tcf touted earlier.
The 2040 total annual gas production number equates to just
over 100 billion cubic feet a day from around 70 bcf/d now.
While oil production will plateau after 2016 and start to
gradually fall after 2020, natural gas output will increase
steadily, growing 56 percent between 2012 and 2040.
U.S. oil and gas output unexpectedly reversed a long decline
after companies learnt how to unlock production from the
tightly-packed shale rock using horizontal wells that are
"EIA's updated reference case shows that advanced
technologies for crude oil and natural gas production are
continuing to increase domestic supply and reshape the U.S.
energy economy as well as expand the potential for U.S. natural
gas exports," said EIA Administrator Adam Sieminski.
"Growing domestic hydrocarbon production is also reducing
our net dependence on imported oil and benefiting the U.S.
economy as natural-gas-intensive industries boost their output,"
he said in a statement.
LIQUID FUEL IMPORTS
Imports of liquid fuels will fall to 25 percent of total
U.S. consumption by 2016, far lower than the EIA's previous
forecast of 34 percent by 2019. As oil production begins to
fall, that share will increase to 32 percent by 2040, still
lower than the 37 percent it expected a year ago.
The country currently imports about 40 percent of the crude
and other liquid fuels that it consumes.
Consumption of petroleum and liquid fuels will rise to 19.3
million bpd in 2025, but then slip to 18.7 million bpd from 18.5
million bpd in 2012. Natural gas consumption will rise to 28.4
tcf by 2025 and to 31.6 tcf in 2040 from 25.6 tcf last year.
And while crude oil exports remain severely limited by law,
natural gas exports will continue to rise. The country will
become a net natural gas exporter two years sooner than the EIA
had previously judged, in 2018.
It will become a net exporter of liquefied natural gas (LNG)
by 2016 with sales abroad rising to 3.5 tcf by 2029 and
remaining at that level until 2040.
The rise in natural gas production will lower the percentage
of electricity that is generated by dirtier coal to 32 percent
in 2040 from 37 percent in 2012 and over 50 percent in 2000 as
plants switch to using gas.
(Reporting by Sabina Zawadzki; Editing by Joseph Radford)