Total dry gas production in the US will continue to increase until 2050 in most forecast scenarios, mainly to support US natural gas exports to the global market, according to the US Energy Information Administration’s 2020 Annual Energy Outlook (AEO2020).
The US began exporting more natural gas than it imports on an annual basis in 2017, driven by increased LNG exports, increased pipeline exports to Mexico, and reduced imports from Canada. In most of the AEO2020 cases, net natural gas exports continue to increase through 2050, and most of the increase is in the near term.
The AEO2020 Reference case represents EIA’s best assessment of how the US and world energy markets will operate through 2050, assuming no significant changes in energy policy occur. Side cases show the effects of changing model assumptions: the High and Low Oil Price cases simulate international conditions that could drive crude oil prices higher or lower, and the High and Low Oil and Gas Supply cases vary production costs and resource recoverability within the US.
EIA expects dry natural gas production to total 34 tcf in 2019. In the AEO2020 Reference case, EIA projects that US dry natural gas production will reach 45 tcf by 2050. Production growth results largely from continued development of tight and shale resources in the East, Gulf Coast, and Southwest regions, which more than offsets production declines in other regions. Dry natural gas production from these three regions accounted for 68% of total US dry natural gas production in 2019 and, in the Reference case, 78% of dry natural gas production in 2050.
In the Reference case, both US natural gas exports by pipeline and US LNG exports continue to grow through 2030. LNG exports account for most of the export growth because more LNG export facilities are becoming operational and more projects are under construction. In the Reference case, EIA projects that LNG exports will almost triple, from 1.7 tcf in 2019 to 5.8 tcf in 2030, the equivalent of nearly 16 bcfd. LNG exports remain at this level through 2050 as US-sourced LNG becomes less competitive in world markets and as more countries become global LNG suppliers.
US LNG exports are more competitive when oil prices are high (as in the High Oil Price case) and US natural gas prices are low (as in the High Oil and Gas Supply case) because of pricing structures that link Brent crude oil prices to LNG prices in many world markets. In the High Oil Price case, US natural gas net exports reach nearly 13 tcf by the late 2030s, most of which is LNG. Conversely, in the Low Oil Price case and Low Oil and Gas Supply case, US LNG is less competitive globally and remains lower than 5 tcf/year through 2050.
By comparison, pipeline trade of US natural gas is less sensitive to changes in assumptions about domestic natural gas supply and world oil prices. Pipeline trade of natural gas is highest in the High Oil and Gas Supply case because low domestic natural gas prices reduce US natural gas imports from Canada.
