Editorial: The US Natural Gas Boom - 2040 Or Bust
"For every promise, there is price to pay." Jim Rohn (1930 – 2009)
Yesterday, the Energy Information Agency (EIA) released its abridged version of the EIA Annual Energy Outlook 2014 with projections for "trends and issues that could have major implications for U.S. energy markets" up to 2040.
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The report forecasts a year-on-year increase of two per cent in natural gas production for the 2012-2040 period, culminating in a total US domestic production of 37.6 trillion cubic feet (1.06 trillion cubic metres) per annum, 56 per cent higher than current levels and 37 per cent higher than world-leader Russia’s natural gas output in 2013.
Concomitantly, gas imports from key energy partners will fall by as much as 30 per cent as domestic supply grows to fill demand, and exports to continental neighbours Mexico and Canada will increase by six per cent and 1.2 per cent per year respectively.
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Perhaps even more interesting, is the projection that price decreases will facilitate natural gas to overtake coal as the primary provider of U.S. power generation, delivering more than one third of the nation’s electricity by 2035 and allowing the country to dip below a CO2 emissions of six billion metric tonnes, last recorded in 2005.
As positive as the promise of America’s energy future may be, it will all come down to price. The recent shelving of Shell’s $20 billion Gas To Liquid (GTL)
plant in Louisiana has showed the reluctance of companies to make huge capex investments when natural gas prices are not guaranteed to stay feasibly low.
It seems that some promises are best seen through rose-tinted spectacles….
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