The U.S. energy industry has written “an amazing story, really, when you think about what has happened in the shale oil and gas space” in the past decade, the federal government’s man with the energy numbers told the recent North American Gas Forum in Washington, D.C.
Adam Sieminski, administrator of the U.S. Energy Information Administration (EIA), said in his conference keynote address that the agency currently projects crude oil production could climb to as high as 13 million barrels per day (MMbbl/d) in the next decade before leveling off.
In contrast, “we don’t see a plateau for natural gas,” he added. EIA currently credits the unconventional shale plays with producing around 35 billion cubic feet per day (Bcf/d)—“that’s over half of our domestic gas production,” Sieminski pointed out. Oil output from the shale plays currently runs around 4 MMbbl/d, he said, or a little less than half of U.S. output. But shale’s share of both hydrocarbons will continue to rise.
He discussed differences in the EIA’s long-term Annual Energy Outlook and its more current—and more precise—Short-Term Energy Outlook.
“We’re beginning to see some daylight between the [reports’] numbers,” Sieminski added, indicating the industry continues to beat even the EIA’s rather optimistic production projections. “I’m pretty sure we’re going to show even more production when we come out with the 2015 Annual Energy Outlook in December. … Production just keeps growing,” he said.
The administrator said the agency currently projects the ratio of oil to gas prices will narrow in the next decade and added “we project there will be plenty of gas around and plenty of interesting places for it to go.” Power generation will take a larger and larger share of gas output as the government encourages a move away from coal-fired generation. Industrial demand also will grow but use of gas as a transportation fuel will remain a comparatively small market, he predicted.
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