The United States will be awash in oil and natural gas over the next quarter century, but you will probably pay about what you are paying now, the federal government predicted today. U.S. oil production by 2016 will approach 9.6 million barrels per day, the all-time high achieved in 1970, the U.S. Energy Information Administration predicted in its Annual...
View full sizeA shale gas drilling rig stands lit in the waning light of day in Carroll County in April 2013. Well owner Chesapeake Energy subcontracted the drilling to Patterson-UTI Energy, Inc., a Houston company that drills wells throughout the nation.
The United States will be awash in oil and natural gas over the next quarter century, but you will probably pay about what you are paying now, the federal government predicted today.
U.S. oil production by 2016 will approach 9.6 million barrels per day, the all-time high achieved in 1970, the U.S. Energy Information Administration predicted in its Annual Energy Outlook.
But by 2020, production will have peaked and will begin to slowly decline over the following 20 years, the analysts think, necessitating the development of more costly technology
The Outlook, which forecasts out as far as 2040, also predicted U.S. natural gas production will continue to grow, increasing 56 percent from 2020 to 2040 to 37.6 trillion cubic feet per year.
The forecast "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 natural gas exports," EIA Administrator Adam Sieminski said in a statement.
"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.
The agency sees the price of gasoline declining to roughly $3.30 per gallon on average by 2017, then rising to $3.90 per gallon by 2040 (in 2012 dollars).
The cost of diesel fuel is expected to fall to an average of $3.50 per gallon by 2017, then rise to an average of $3.90 by 2040. Demand for diesel, used now mostly by trucks and trains, is expected to increase for auto use as manufacturers produce more of these vehicles.
Total demand for gasoline and diesel is not expected to soar, as once predicted, because of efficiency increases and a slower-than-once expected population growth, the agency said.
Total energy demand for transportation is seen falling by 25 percent by 2040, the analysis predicts.
Natural gas will be used not only for heating but also increasingly by the chemical and industrial plants, and by electric power plants.
The agency sees the average wholesale price of natural gas rising to about $4.80 for roughly 1,000 cubic feet by 2018 and then falling to $4.38 by 2020.
But in the following 20 years, with expanding consumption and global exports, the price of gas should rise to an average of $7.65 per Mcf by 2040.
Residential prices in the short run are not expected to differ markedly from where they are today.
Natural gas power plants are expected to generate about 35 percent of the nation's electric power by 2013, displacing coal, which is still seen as accounting for as much as 32 percent. Electric prices are also expected to be stable.