Tags: Exxon | energy | staying | power

Exxon: US Energy Revival Is Here to Stay

Tuesday, 11 Dec 2012 09:36 AM

 

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Soaring oil and gas production will propel North America into becoming a net energy exporter by 2025, Exxon Mobil Corp said in its annual energy outlook.

More than half of the growth in unconventional natural gas supply over the next two decades will be in North America, supplies that will help reshape global markets, Exxon said.

Improvements in drilling technology such as hydraulic fracturing have unlocked vast shale oil and gas reserves, leading to a surge in production and reduction in the United States' dependence on foreign energy.

Exxon has invested heavily in U.S. natural gas assets in recent years, beginning with its 2010 purchase of shale gas operator XTO Energy. The Irving, Texas company is also investing in the search for crude oil produced from rock formations, but those supplies are so-far relatively small.

"It's still very much early days for tight oil," William Colton, vice president for strategic planning at Exxon told reporters on a media call.

In September, Exxon said it would buy Denbury Resources Inc's crude oil properties in the Bakken shale in North Dakota for $1.6 billion.

Growing supplies of North American natural gas are expected to spur trade with countries in Asia and Europe, said Exxon.

Companies including Exxon have already lined up to get permission to ship the country's cheap natural gas overseas. The only gas export terminal approved by the United States so far is Cheniere Energy Inc's Sabine Pass facility in Louisiana.

Natural gas, which emits up to 60 percent less carbon dioxide than coal when used for electricity generation, is expected to overtake coal by 2025 as the second most-used fuel, according to the Exxon report.

Exxon expects natural gas, which has been one of its biggest investment areas in recent years, to account for 30 percent of global electricity generation by 2040 compared with less than 25 percent now.

Power plants in the United States are already using less coal as they switch to more efficient plants fired by natural gas.

Exxon said developing nations such as India and China will drive global energy demand, which is expected to increase 35 percent between 2010 and 2040.

Exxon's findings are similar to two recent reports from the Energy Information Administration (EIA) and the International Energy Agency (IEA).

The EIA said last Wednesday that U.S. natural gas production would grow faster than expected through the next two decades, paving the way for the country to be a net gas exporter as early as 2016.

The IEA said last month that the United States will overtake Saudi Arabia and Russia as the world's top oil producer by 2017 and North America will become a net oil exporter by 2030.

© 2014 Thomson/Reuters. All rights reserved.

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