Posted November 15, 2017
The International Energy Agency’s World Energy Outlook 2017 has a couple of big takeaways for U.S. energy:
- World energy demand will increase 30 percent by 2040, and natural gas will meet a big part of that demand.
- The U.S. will be a leading global supplier of two leading fuels, natural gas and oil.
Let’s take the second one first. IEA credits the U.S. shale revolution with unlocking vast resources that will push U.S. natural gas and oil output “to a level 50% higher than any other country has ever managed.” IEA’s chart on U.S. natural gas and oil output out to 2040:
IEA’s statement above is remarkable. What it means is that the energy security goals U.S. leaders have discussed for more than 40 years appear to be coming into view. Thanks to modern, data analytics-based exploration and production, the United States will produce natural gas and oil at unprecedented levels, decreasing oil imports and growing opportunities for U.S. energy in the global marketplace. IEA:
In our projections, the 8 mb/d rise in US tight oil output from 2010 to 2025 would match the highest sustained period of oil output growth by a single country in the history of oil markets. A 630 bcm increase in US shale gas production over the 15 years from 2008 would comfortably exceed the previous record for gas.
Expansion on this scale is having wide-ranging impacts within North America, fueling major investments in petrochemicals and other energy-intensive industries. It is also reordering international trade flows and challenging incumbent suppliers and business models.
And one more:
[A]lready a net exporter of natural gas, the US becomes a net exporter of oil in the late 2020s.
Let’s keep our eye on the ball here. Near-term fluctuations in crude oil markets are less important than strategic decisions here at home to fully harness the United States’ vast energy potential over the next several decades.
Natural gas and oil companies make investment decisions based not on current market conditions, but on long-term outlooks like those published by IEAs and other organizations. The world is going to continue to need more energy, and the U.S. is in strong position to be the leading supplier, helping ourselves and friends and allies abroad.
Washington’s focus should be on policies and approaches today that will support such a scenario in the future: increased access to domestic reserves onshore and offshore, a commonsense regulatory approach and pro-growth tax reforms that support investment.
As for global demand, IEA charts it like this:
IEA projects that global demand will rise out to 2040 at a rate that’s equivalent to adding another China and India to today’s demand level – mainly because of economic expansion and population growth. Use of natural gas and renewables is projected to increase – so we’ll repeat our point that natural gas is renewables’ essential partner, supplying fuel for electricity generation when intermittent energy sources aren’t available (see here and here).
Demand for natural gas and oil will continue to grow, IEA projects. Natural gas use will rise 45 percent by 2040, the agency says, with industrial demand becoming the largest area for growth. Again, those are significant projections for U.S. energy producers – demand that will spur growth in domestic output and job creation.
ABOUT THE AUTHOR
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.