U.S. to enjoy abundant oil, natural gas supplies through 2040, government agency reports

The United States will be awash in energy resources for the rest of the decade as improved hydraulic fracturing—or "fracking"—techniques to extract oil and natural gas from shale rock will dramatically lift the country's supplies, the Energy Information Administration (EIA) said in releasing its projections of the U.S. energy market through 2040.

The report, which the Department of Energy's unit issued last Wednesday, said domestic crude oil production will rise sharply starting in 2013 as shale production explodes. Production, currently at about 6.1 million barrels a day, will rise to 7.5 million barrels a day by 2019, EIA said.

Starting in 2020, production will decline gradually for the next 20 years to 6.1 million barrels a day as most of the productive and profitable drilling areas are exhausted, EIA said.

Natural gas supplies are projected to rise from 7.8 trillion cubic feet per year by 2025 from 6.8 trillion cubic feet in 2011, the EIA said. Natural gas will account for 30 percent of U.S. electricity generation in 2040, nearly double that of 2000, EIA said. As with crude oil, the growth of natural gas supplies will be driven by advancements in fracking technology and processes, the report said.

Natural gas will also gain popularity as a fuel for heavy-duty trucks and as a feedstock in the production of diesel and other fuels, the report said. Diesel fuel consumption will moderate as liquefied natural gas begins supplanting diesel as an energy source, according to the report. The report did not offer specific data on projected natural gas consumption by heavy-duty trucks.

Energy-related carbon emissions will remain 5 percent below their 2005 levels through 2040, the report said. This is attributed to improved efficiency of energy use and a shift from higher-carbon fuels like coal to lower-carbon fuels like natural gas and renewable energy such as wind and solar power.

Renewable energy sources will account for 16 percent of electricity generation in 2040, up from 13 percent in 2011, according to the report.

EIA said its projections are based on the assumption that current laws and regulations will essentially remain unchanged through 2040.