Page 27 - Oil and Energy-February 2013

February 2013 • 27
U.S. Energy Data
LONG-TERM PRICE FORECASTS INVARIABLY
prove incorrect, but they still get the atten-
tion of energy marketers. The U.S. Energy
Information Administration (EIA) recently
issued its Annual Energy Outlook 2013
(AEO2013) Reference Case, and the forecast
calls for continuing disparity in heating fuel
prices between now and 2040.
EIA projects that heating oil costs will
continue to rise in the residential sector,
increasing from $3.02 per gallon in 2010, to
$3.73 in 2020, to $4.34 in 2030, and $5.07
in 2040.
During the same span, residential
natural gas prices are also projected to
increase, but at a slower rate that will
cause the price gap to continue and grow.
EIA predicts residential natural gas prices
will rise from $1.16 per therm in 2010 to
$1.21 in 2020, $1.37 in 2030 and $1.67
in 2040. On a BTU-for-BTU basis, those
natural prices are equivalent of $1.61-per-
gallon heating oil in 2010, increasing to
$1.68 in 2020, $1.92 in 2030 and $2.32
in 2040.
That 30-year span will see a reduction
in the residential price of propane followed
by a slow rise, according to EIA. The agency
projects the price to drop from $2.34 in
2010 to $1.98 in 2020 and then rise to
$2.17 in 2030 and $2.35 in 2040.
LESS FUEL DELIVERED
The Annual Energy Outlook also projects
decreases in the residential delivery of
both fuel oil and natural gas through 2040,
with propane delivery holding steady. For
heating oil, residential delivery declines at
a rate of 2.1 percent per year, falling from
0.58 quadrillion Btu (quads) in 2010 to
0.32 quads in 2040. In gallons, the decrease
is from 4.2 billion gallons in 2010 to 2.3
billions gallons in 2040.
Over the same span, residential propane
delivery is forecasted to remain virtually
unchanged at 0.53 quads (5.6 billion gal-
greater use of clean energy and reduced
energy imports,” EIA Administrator Adam
Sieminski said in releasing the report.
“This combination has markedly reduced
projected energy-related carbon dioxide
emissions.”
Here is a look at some of the report’s
key findings.
Crude oil production, particularly from
tight oil plays, rises sharply over the
next decade. The advent and continuing
improvement of advanced crude oil pro-
duction technologies continues to increase
projected domestic supply. Domestic
production of crude oil increases sharply
in AEO2013, with an annual growth aver-
aging 234 thousand barrels per day (bpd)
from 2011 through 2019, when produc-
tion reaches 7.5 million bpd. The growth
results largely from a significant increase in
onshore crude oil production, particularly
from shale and other tight formations. After
about 2020, production begins declining
gradually to 6.1 million bpd in 2040 as pro-
ducers develop sweet spots first and then
move to less productive or less profitable
drilling areas.
lons) in 2010 and 0.52 quad (5.4 billion
gallons) in 2040. Residential natural gas
delivery, meanwhile decreases at an annual
rate of 0.5 percent, falling from 4.89 quad
in 2010 to 4.23 quad in 2040.
Beyond the home heating sector, the
Annual Energy Outlook predicts a continuing
increase in U.S. energy production. “EIA’s
updated Reference case shows how evolving
consumer preferences, improved tech-
nology, and economic changes are pushing
the nation toward more domestic energy
production, greater vehicle efficiency,
Continued …
EIA Projects Continued
Production Increases