Chesapeake Energy cuts dry gas drilling activity due to current price drop.
The United States is expected to be a net exporter of natural gas by 2021 driven by increased demand outside North America for liquefied natural gas, according to the U.S. Energy Information Administration's Annual Energy Outlook.
EIA Acting Administrator Howard Gruenspecht discussed the report's findings during a briefing Jan. 23.
The rise in exports could push natural gas prices 36% to 54% higher by 2018 depending on the rate of shale gas recovery, EIA reports.
On average, natural gas bills will rise between 3% and 9% between 2015 and 2035 for residential, commercial and industrial consumers.
Other findings from the report show domestic crude oil production will grow by more than 20% over the next 10 years. The development of tight oil combined with offshore drilling will push domestic crude production to 6.7 million barrels per day by 2020 compared with 5.5 million barrels per day in 2010.
U.S. dependence on imported petroleum liquids will decline as domestic oil production increases, biofuel use rises and transportation growth declines. Net petroleum imports as a share of total U.S. liquid fuels consumed fell 49% in 2010.
By 2020 imports will drop to 38% as a share of total consumption and 36% by 2035, the report states.
The share of renewable fuel consumption will grow to 16% by 2035 from 10% in 2010.
Natural gas also will account for a greater share of electric power consumption, increasing to 27% by 2035 from 24% in 2010.
"These projections reflect increased energy efficiency throughout the economy, updated assessments of energy technologties and domestic energy resources, the influence of evolving consumer preferences and projected slow economic growth, said Gruenspecht in a prepared statement.
Chesapeake Cuts Dry Gas Activity
Current low natural gas prices forced Chesapeake Energy Corp. to cut its gas drilling activity by approximately 50% to 24 rigs by the second quarter, the company said Jan. 23.
The company plans to cut its drilling activity in the Haynesville, Barnett and the dry gas area of the Marcellus shale regions.
The anticipated level of dry gas drilling expenditures is the company's lowest since 2005, the company said.
The company plans to reallocate the capital savings from reduced dry gas drilling, well completion and pipeline connection activities to its liquids-rich plays.
"An exceptionally mild winter to date has pressured U.S. natural gas prices to levels below our prior expectations and below levels that are economically attractive for developing dry gas plays in the U.S., shale or otherwise," said Chesapeake CEO Aubrey McClendon in a statement.