Gas used for electric power generation generally increases
over the projection period but at a slower rate than in the
industrial sector. This growth is supported by the scheduled
expiration of renewable tax credits in the mid-2020s.
Gas consumption in the residential and commercial sectors remains largely flat because of efficiency gains and population shifts that counterbalance demand growth.
Although gas use rises in the transportation sector, particularly for freight and marine shipping, it remains a small
share of total natural gas consumption, and gas remains a
small share of transportation fuel demand.
Net energy exporter
The US could become a net energy exporter by 2020 as domestic oil and gas production remains strong and demand
stays relatively flat. Increased production from high oil prices and better-than-expected technology could bring about
the change sooner, new US EIA Administrator Linda A.
“The transition is expected to occur more from an increase
in energy exports than a decrease in imports,” she said dur-
ing a Feb. 6 discussion of the 2018 AEO at Johns Hopkins
University’s School for Advanced International Studies. “The
US could become a globally significant merchant refiner as it
imports more crude and exports more products.”
The AEO is more a projection of trends than a forecast
because its reference case traditionally reflects existing laws
and policies, she noted. In this case, the report’s October
2017 cutoff date meant that impacts from possible produc-
tion of crude from leases on the Arctic National Wildlife
Refuge’s coastal plain were not considered because Congress
authorized sales there later in the year as part of the broader
tax reform bill.
“We intentionally push limits on some cases to show
what could happen under different policies,” Capuano said.
The 2018 AEO predicted that most of the growth in do-
mestic crude production through 2050 will occur mostly as
a result of improvements in technology to recover oil from
more tight shale formations. It also suggested that the US
will become a net gas exporter before 2020, although lique-
fied natural gas exports levels appear uncertain.
“Relatively large increases in LNG exports are not expected to have much impact on domestic gas prices. Resource
and technology assumptions could have a bigger effect,”
EIA STEO: US crude oil production
to average 10. 6 million b/d in 2018
In its latest Short-Term Energy Outlook, the US Energy Information Administration forecasts US crude oil production
to average 10. 6 million b/d in 2018 and 11. 2 million b/d in
2019, both of which are 300,000 b/d higher than forecast in
the January STEO.
“The higher production reflects both the incorporation of
recently reported survey data that was higher than expected
in the previous STEO and a higher crude oil price forecast,”
Brent crude oil future prices closed above $70/bbl in mid-January for the first time since December 2014. Prices have
increased over the past 7 months as oil inventories, both in
the US and globally, have fallen steadily.
In January, oil prices may have received some support following the Organization of Petroleum Exporting Countries’
monitoring committee in some form beyond the current expiration at yearend. Meanwhile, rapid decline in Venezuelan
crude oil output are also likely contributing to higher crude
oil prices. Improved global economic growth expectations
could also be supporting oil prices. The International Monetary Fund (IMF) recently forecast that world gross domestic
product would increase 3.9% in both 2018 and 2019, both
0.2 percentage points higher than its previous forecast.
Crude oil inventories in the US declined 6 million bbl
during the first 4 weeks of 2018 in contrast to a 5-year aver-
age build of 14 million bbl during those 4 weeks. High level
of refinery inputs of crude oil and crude oil exports contrib-
uted to the counterseasonal draw in crude oil inventories.
Like the draw in the US inventories, oil inventories from
the Organization for Economic Cooperation and Develop-
ment also declined. EIA estimated OECD total petroleum
inventories at 2.87 billion bbl, a decline of 183 million bbl
from January 2017—the largest year-over-year decline since
However, a continued acceleration in non-OPEC supply
growth is expected to contribute to global total petroleum
and other liquids inventories rising by 200,000 b/d in 2018.
“This expected modest increase in global oil inventories
could put downward pressure in crude oil prices in the com-
ing months,” EIA said. The agency forecasts Brent crude oil
prices to decline to $60/bbl and the West Texas Intermedi-
ate prices to decline to $56/bbl by this year’s third quarter.
In the STEO, EIA also expects the Henry Hub natural gas
spot price to average $3.20/MMbtu in 2018, which is 31¢
higher than forecast in the January STEO. The higher price
forecast partly reflects record inventory draws during January, which lowered expected storage levels through 2018 in