The U.S. Energy Information Administration’s (EIA) new Annual Energy Outlook for 2015 contains a number of stats, charts and projections, but you could boil them down to a couple of important points.

First, oil and natural gas are and will continue to be the foundation of an all-of-the-above energy approach that’s key to continued U.S. economic growth, energy security and overall security. EIA’s chart showing our energy sources now and projecting them into the future:

As you can see, oil (36 percent) and natural gas (27 percent) supply 63 percent of America’s energy now, and EIA projects they will supply 62 percent in 2040 (oil 33 percent and natural gas 29 percent). This is because oil and natural gas are high in energy content, portable and reliable. They’re the workhorse fuels of the broader economy, making modern living possible as fuels and as the building blocks for a number of products Americans depend on every day. America is and will be dependent on a variety of energies, but oil and natural gas are and will play leading roles.

The great news is the U.S. is in the midst of a revolution in domestic oil and natural gas production, leading to a second big takeaway from EIA’s report – that domestic output is and will continue to reduce U.S. dependence on imported energy. EIA says strong growth in domestic oil and natural gas production from shale and other tight rock formations, coupled with modest demand growth after 2020, will result in declining imports. EIA’s chart:

EIA:

The net import share of crude oil and petroleum products supplied falls from 33% of total supply in 2013 to 17% of total supply in 2040 in the Reference case. The United States becomes a net exporter of petroleum and other liquids after 2020 in the High Oil Price and High Oil and Gas Resource cases because of greater U.S. crude oil production. … The United States transitions from being a modest net importer of natural gas to a net exporter by 2017.

EIA Administrator Adam Sieminski:

“EIA’s AEO2015 shows that the advanced technologies are reshaping the U.S. energy economy. With continued growth in oil and natural gas production, growth in the use of renewables, and the application of demand-side efficiencies, the projections show the potential to eliminate net U.S. energy imports in the 2020 to 2030 timeframe.”

Both of the above attest to the strength of America’s energy revolution – fueling economic growth and increasing U.S. security in the world – and suggest the need for energy policies going forward that keep these trend lines going. Kyle Isakower, API vice president for regulatory and economic policy:

“The revolution in U.S. oil and natural gas production has provided an incredible boost to workers and consumers here in America. The latest federal forecast shows that U.S. production can remain strong, despite the downturn in prices, but an all-of-the-above energy policy will be critical to our competitive edge in the decades to come. We need more energy – not less – especially as natural gas plays a rapidly growing role in America’s energy mix and domestic oil production continues to replace imports.”

This we can do with sound policy decisions that support increased oil and natural gas development, including access to energy reserves – onshore and offshore – a common-sense regulatory approach and policies that foster energy investment, including removing artificial obstacles to U.S. energy exports. Isakower:

“To meet the demands of a growing economy, policymakers must steer away from duplicative regulations, encourage free trade, and keep public lands open to energy production. The EIA report shows that America is a global energy superpower, and keeping that momentum strong will drive jobs, economic growth, and energy security through 2040 and beyond.”

Two other points from EIA’s report:

• Rising natural gas production – which has made the U.S. the world’s leading natural gas producer– is a result of shale development, which EIA says will continue to grow for decades to come. EIA’s chart:

For the production surge we can thank advanced hydraulic fracturing and horizontal drilling, which is safely tapping shale and other tight formations of energy that once was beyond our reach. EIA:

Growth in production of dry natural gas and natural gas plant liquids (NGPL) contributes to the expansion of several manufacturing industries (such as bulk chemicals and primary metals) …

• U.S. energy-related emissions of carbon dioxide will remain below the 2005 level through 2040. EIA’s chart:

This is due in part to efficiency improvements and greater use of clean-burning natural gas.

By Mark Green

Originally posted April 14, 2015

Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America’s oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry.