Thanks to fracking, U.S. shale gas production to more than double by 2040
The Energy Information Administration projects that shale natural gas and oil tight oil production will more than double by 2040. In the recently released “Reference Case,” the Annual Energy Outlook 2016, projects that production from shale gas and tight oil plays will grow from about 14 trillion cubic feet (Tcf) in 2015 to 29 Tcf in 2040. Shale wells would then make up 69% of the 2040 total dry natural gas production compared to 51% currently.
Demand for natural gas is expected to push natural gas prices up with natural gas spot prices at the Henry Hub rise to about $5 per million British thermal units (MMBtu) through the mid-2020s from an average of $2.62/MMBtu in 2015, then remain near or below $5/MMBtu (in 2015 dollars) through 2040. Demand will be driven by a shift away from coal in the industrial and utility sectors plus increases in exports of LNG (liquefied natural gas).
Improvements in fracking technology will help production keep pace with demand (both domestic consumption and exports), resulting in relatively stable natural gas prices throughout the projection period, according to the EIA report.