Rystad: U.S. to Achieve Net Energy Independence Within Months
Norwegian market research consultancy Rystad Energy believes that the U.S. will become net energy independent within months, the firm said in a forecast released Tuesday.
“This milestone follows a strong period of growth in both hydrocarbon and renewable resources, and we forecast that the U.S. will have primary energy surplus – and not a deficit – by February or March 2020, depending on the intensity of the winter season,” says Sindre Knutsson, vice president of Rystad Energy’s gas markets team.“By 2030 total primary energy production will outpace primary energy demand by about 30 percent."
Rystad expects that the next benchmark monthly release from the Energy Information Agency (EIA) will show that on average, the U.S. has been self-sufficient in primary energy over the course of a one-year period. It would be the first time that this has occurred since Ronald Reagan's first term in office.
"These changes in the U.S. energy balance could turn its petroleum deficit of $62 billion in 2018 to a surplus of $340 billion by 2030. That adds up to a $400 billion shift, in the space of only a dozen years, thanks primarily to the gargantuan rise of output from the U.S. shale sector,” Knutsson said.
The expected increases by 2030 include an 80 percent increase in output from the main U.S. shale oil fields and a 40 percent increase in natural gas production, which together account for the lion's share of the energy increase. Rystad also expects explosive growth in renewables, with solar output up by more than 350 percent and wind by 250 percent (from relatively small base levels). Coal production is expected to fall by nearly 40 percent over the same period.
Domestic demand is expected to grow only minimally over the same period, leading to a marketable excess supply of energy products. Rystad forecasts that the U.S. fossil fuel surplus will increase to 12 million boepd by 2030, boosting natural gas and oil exports.
“The emerging energy surplus will make the U.S. less vulnerable to foreign energy-related politics and facilitate growing exports. While renewable energy output will be consumed domestically, the future for oil and gas exports is bright,” Knutsson said. “The growth of the shale industry will continue to revolutionize the US energy balance and create new opportunities for exports and developments in the country’s total trade balance."
The expected petroleum surplus would be worth $340 billion, enough to offset more than half of today's $620 billion U.S. trade deficit.