American natural gas is going to make a huge difference in the next three decades as we try to move toward clean, reliable and affordable forms of energy, according to a little noticed report issued Wednesday by the Energy Information Administration (EIA) - a report that may be of interest to those who care about energy in this country and who are not hanging on the 24/7 news cycle on the fiscal cliff.
EIA, the independent statistical arm of the U.S. Energy Department, is continuing in its growing recognition of shale gas abundance, its effect on prices, and its benefit to gas consumers. Projected shale-gas production is higher than in last year's estimate, expected gas consumption in industrial and power generation sectors is up significantly, and the overall resulting prices are affordable and stable over the long-term.
EIA administrator Adam Sieminski laid out a strong case for natural gas growth in his presentation in Washington of the preliminary findings of the 2013 Annual Energy Outlook. From power to the industrial sector to transportation, demand is expected to grow over the course of the next three decades.
"Driving everything on the gas production side is shale gas," Sieminski said. "Shale gas production continues to be the major contributor to increased natural gas production."
Shale gas is going to grow to 16.7 trillion cubic feet (tcf) in 2040, from 7.8 tcf in 2011. This is going to fuel an overall growth in natural gas' share of energy production to 35 percent by 2040, from 30 percent in 2011.
Sieminski said he was particularly interested in the findings regarding demand in the industrial sector. There he said, "Natural gas grows more rapidly in our 2013 version than it did in the AEO 2012 due to the benefits from strong growth in shale gas production, an extended period of relatively low natural gas prices -- and that lowers the costs of both raw material and energy… and rising industrial shipments."
So what do the numbers show? Consumption of natural gas is going to grow by 20 percent by 2040. American natural gas is going to take up a bigger share of our total energy use, production of domestic natural gas is going to continue to rise, and the overall share of our electricity sector fueled by natural gas is going to grow substantially to 30 percent from 25 percent, while coal will drop to 35 percent from 43 percent.
Many of these numbers represent an even rosier outlook for natural gas than we saw just last year. For example, EIA increased demand projections an average of 4.4 percent per year and it dropped gas prices an average of 18 percent per year when compared to AEO 2012 for the time period of 2012-2035.
And then there is this: carbon dioxide is not going to reach 2005 emissions levels again through the year 2040, Sieminski says. The tie in? Well, EIA pointed to natural gas earlier this year as contributing to the lowest carbon dioxide emissions levels since 1992.
This is definitely good news for our nation's clean energy future and we are proud of the role American natural gas is playing in spurring our economy, adding jobs, and cleaning our environment. In these respects, EIA findings could not be more encouraging.