WASHINGTON — The Annual Energy Outlook 2011, released by the U.S. Energy Information Administration, predicts recoverable shale gas resources are nearly double what the agency forecasted a year ago.
The projection shows the growing importance of natural gas from domestic shale gas resources, according to Energy Information Administration Administrator Richard Newell.
Shale jackpot
The technically recoverable unproved shale gas resource is 827 trillion cubic feet (as of Jan. 1, 2009), which is 474 trillion cubic feet larger than the projection made a year ago.
This larger resource leads to about double the shale gas production and more than 20 percent higher total lower-48 natural gas production in 2035, with lower natural gas prices.
The report presented updated projections for U.S. energy markets through 2035.
Key findings
Other key findings include a higher updated estimate of domestic shale gas resources that supports the increase of natural gas production at prices below those in last year’s outlook.
Imports meet a major but declining share of total U.S. energy demand: Projected demand for energy imports is moderated by increased use of domestically produced biofuels demand reductions, resulting from the adoption of efficiency standards, and rising energy prices.
Rising fuel prices also spur domestic energy production across all fuels, which moderate growth in energy imports.
The net import share of total U.S. energy consumption in 2035 is 18 percent, compared with 24 percent in 2009.
Growing fuels
Non-hydro renewables and natural gas are the fastest growing fuels used to generate electricity, but coal remains the dominant fuel because of the large amount of existing capacity and continued reliance on existing coal-fired plants.
The Energy Information Administration is not projecting any new central station coal-fired power plants, however, beyond those already under construction or supported by clean coal incentives.
The generation share from renewable resources increases from 11 percent in 2009 to 14 percent in 2035 in response to federal tax credits in the near term and state requirements in the long term.
Natural gas
Natural gas also plays a growing role due to lower natural gas prices and relatively low capital construction costs that make it more attractive than coal.
The share of generation from natural gas increases from 23 percent in 2009 to 25 percent in 2035. Industrial natural gas demand will recover, reversing a recent trend of industrial natural gas demand growing sharply in the near term from 7.3 trillion cubic feet in 2009 to 9.4 trillion cubic feet in 2020.
This growth reverses the recent downward trend, as a result of a strong recovery in near-term industrial production; growth in combined heat and power; and relatively low natural gas prices.
Assuming no changes in policy related to greenhouse gases, carbon dioxide emissions grow slowly, but do not reach 2005 levels until 2027. These emissions then rise by an additional five percent from 2027 to 2035, reaching 6,315 million metric tons in 2035.
Other highlights of the Annual Energy Outlook 2011 Reference include some case projections.
Crude oil
World oil prices rise in the reference case, as the world economy recovers and pressure from growth in global demand continues. In 2035, the average real price of crude oil in the reference case is $125 per barrel in 2009 dollars.
World liquids consumption grows from 83.7 million barrels per day in 2009 to 110.8 million barrels per day in 2035. Most of the growth is in non-OECD countries or regions, lead by China, India, and the Middle East.
U.S. natural gas consumption will rise 16 percent from 22.7 trillion cubic feet in 2009 to 26.5 trillion cubic feet in 2035.
U.S. crude oil production will increase from 5.4 million barrels per day in 2009 to 6.1 million barrels per day in 2019 and will decline slightly from that level through 2035. Production increases come from onshore enhanced oil recovery projects and shale oil plays.
