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By 2022, U.S. To Become Net Export Of Oil And Natural Gas: EIA


02/13/2018


By 2022, U.S. To Become Net Export Of Oil And Natural Gas: EIA
The United States is set to become a net exporter of natural gas by the year 2020 according to a forecast made in the Annual Energy Outlook of 2018 by the Energy Information Administration (EIA). The agency said that the transformation would be driven by growth in natural gas, oil, and oil product production combined with reduced domestic demand.
 
However, this transformation can only take place under some specific pre-conditions according to the EIA.  The forecasting model of the EIA is based on assumptions that the U.S. annual economic growth between 2017 and 2050 would be between 1.5 per cent and 2.6 per cent and the demand for energy between that time period would range between being flat and registering a growth of 0.7 per cent.
 
The forecasting model also takes into account the increasing adoption and demand for renewable sources of energy which is being preferred by many instead of oil. And in the U.S., despite the government slapping a 30 per cent tariff on imports of solar panels form China which raised fears that there would be a problem for the U.S. solar industry, there are some clear and visible trends that support the growth of renewable energy. However, technological enhancements have helped to lower costs, and tax incentives and conducive federal and state policies for renewable energy would boost the sector despite some deterrent to the solar power segment caused by the tariff. 
  
The EIA forecasts that there would be continued growth in the production of oil and gas together with growth in renewable energy sources, even though it predicts that around 2032m there would be stagnation in oil production. Oil and gas manufacturers in the U.S. would need to find alternative buyers outside of the country due to predicted slack demand in the domestic market, says the EIA. And the U.S. would turn into a net exporter of oil and gas even before the end of 2022 as global prices for both would go up and hence it would be profitable for companies to export instead of seek sale in the domestic market. 
  
However, this condition will not last long according to the IEA. There would not be space for further enhancement in technology in the production market which are done to increase competitiveness in the global market by 2038 in addition to reduction in assets that can deliver oil and gas of high quality at low costs. However, according to IEA estimates, by 2045, the U.S. should again transform into a net exporter of oil and gas.
 
While the report by the EIA provides no details of the possible international markets for U.S. oil and natural gas, the internationalization of U.S. oil and natural gas can be seen even today. Experts predict that the destination of U.S. oil and gas would likely be India and China – especially gas. This is because, lower emission and prices of natural gas has prompted both the nations to reduce their dependence on oil. 
 
(Sourcec:www.oilprice.com)