Colonial In The News

U.S. Could Eliminate Net Energy Imports By 2030 (Wall Street Journal)

Wall Street Journal – 4/14/2015
By: Alison Sider

The U.S. could soon export more energy than it imports, significantly changing the country’s appetite for foreign fuels starting as early as 2020, according to a new report from the Energy Information Administration.

Despite energy prices that are sharply lower today than they were a year ago, the federal government’s new outlook forecasts that U.S. oil and natural gas production will continue to rise over the next five years.

As American drillers keep pumping, the U.S. will meet more of its own energy needs. The trend will also boost the amount of natural gas, refined fuels such as diesel and ultralight oil the U.S. has available to ship overseas, reversing the country’s energy importing trend that has been in place since the 1950s.

Advanced technologies are reshaping the U.S. energy economy,” said Adam Sieminski, EIA Administrator. The projections show the potential to eliminate net U.S. energy imports in the 2020 to 2030 time frame.”

In the new outlook released Tuesday, Mr. Sieminski pointed to greater use of renewable energy sources, more efficient cars and trucks as well as growth in American oil and gas production as transforming the country’s energy picture.

The government appears to be even more bullish about U.S. oil production this year than it was last year. Despite a nearly 50% drop in the price of crude-oil since then, the government’s expectation for oil production growth is even more robust than in last year’s energy forecast.

U.S. oil output will peak at 10.6 million barrels a day in 2020, according to the EIA’s base case in this year’s forecast. That is up from last year’s base case prediction that U.S. oil production would peak at 9.6 million barrels a day by 2019.

The agency set forth six different scenarios based on the energy prices and economic growth. In a high oil price scenario the U.S. could become a net exporter of energy as early as 2019, the EIA said. But even in scenarios where oil prices don’t rebound very quickly, the U.S. will export more energy than it imports by 2030, the report said.

The U.S. has been a net importer of energy for nearly six decades, but new trade routes opening up will change that, including natural gas exports from the U.S. to Europe and Asia and greater shipments of a type of ultralight oil called condensate that can now be sold to foreign buyers.

Cheap, plentiful natural gas should also be a boon to heavy industry and manufacturing inside the U.S., the EIA said. Manufacturers of chemicals, metals and pulp and paper products are particularly energy intensive and will benefit from America’s abundant gas supply. Low-price natural gas will also help keep electricity prices in check, which should help industries that use large quantities of power.