US oil imports will continue to decline as domestic production rises, and by 2040 the US could be importing crude only from Canada, according to the latest forecast from ExxonMobil.
That forecast depends on off-shore, Arctic, oil sands and unconventional resources being available for development in coming decades.
“We believe oil imports have reached a peak in the US,” said William Colton, ExxonMobil Vice President of Corporate Strategic Planning at a recent company announcement in Washington DC. He said Exxon’s forecasting models show that imports, other than Canadian, could reach 1 million barrels per day or less–perhaps down to zero–in the coming 30 years.
The US Energy Information Administration says crude imports set a record in 2005 of 10.1 million barrels per day and have declined since. Now the US averages about 8 million b/d, of which a quarter comes from Canada. US petroleum usage is running 19-20 million b/d.
Unveiling the outlook at a meeting at the Center for Strategic and International Studies in Washington, DC, Colton said US oil resources, including those in the outer continental shelf, in Alaska on and off shore, and unconventional tight oil and shales, will let the US remain the third largest global petroleum producer, behind Russia and Saudi Arabia, for the foreseeable future. That forecast comes despite discovery of new oil resources worldwide.
“We’ll still use a lot” of coal
Adam Sieminski, Chief Energy Economist, Global Markets, at Deutsche Bank, questioned whether advances in shale and tight oil drilling, which are building on technology developed for natural gas shales, might open up so many new oil resources that they would upend everyone’s expectations in a couple of years, as the technology did for gas.
Colton agreed “the potential is there.” But he noted it is “early days” in locating tight oil deposits worldwide, because producers have just begun looking for them, in the US and elsewhere.
The development of technology combining horizontal drilling and hydraulic fracturing, which enabled profitable production from gas shales, has led to huge increases in estimates of US reserves and new production that has depressed the price of natural gas. Gas shales are being sought elsewhere; China National Petroleum Corp. just announced its first discoveries of shale gas in Sichuan Province.
Globally, Exxon’s 2012 Outlook for Energy, released Thursday, sees oil, natural gas and coal still providing 80% of global energy by 2040, but predicts coal’s share will drop while natural gas’ grows. Concern about both global warming and coal pollution, combined with greater availability of natural gas, will drive the shift, it says.
Demand for all energy sources will grow, but usage will become more efficient, the Outlook says. Demand growth will be driven by population increase and economic expansion in the developing world, Colton said.
Electricity demand will increase the most, soaring worldwide as more people connect to power grids. Exxon’s Outlook sees all types of generation increasing, but says natural gas will gradually displace coal and, by 2040, they’ll each provide about a third of world electricity. Today, coal’s share is closer to half, and natural gas, a quarter.
Nonetheless, Colton said, “We’ll still use a lot” of coal.
The report predicts oil will remain dominant in transportation – from nearly 100% today down to about 90%. Colton said government mileage mandates will mean energy consumption by personal vehicles will plateau, even as more cars hit the roads worldwide, but economic growth requires more fuel use for commercial transportation – heavy-duty trucks, railroads, shipping and aviation.
Exxon forecasters believe hybrid vehicles will be the wave of the future, comprising 40% of new cars worldwide by 2040. Colton said plug-in electrics and natural gas vehicles remain too expensive up front, and hybrids seem to offer “the best of both worlds.”
Photo Caption: A large excavator loads a truck with oil sands at the Suncor mine near the town of Fort McMurray in Alberta Province, Canada on October 23, 2009.