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Baker Institute finds increased domestic production won't make US self-sufficient in natural gas
Date:11/19/2007

A new report by the Energy Forum at Rice University's Baker Institute for Public Policy finds that the United States will continue to rely on imported natural gas even if areas that are currently restricted are opened up to drilling.

Natural gas is already an important fuel in the United States, representing 22 percent of total primary energy use in 2006. About 20 percent of that gas was imported, the vast majority from Canada. Liquefied natural gas (LNG) imports have risen from virtually zero in 1986 to just in excess of 0.5 trillion cubic feet (tcf), or 2.9 percent of total U.S. natural gas consumption in 2006. The United States imports LNG from a variety of countries, including Trinidad and Tobago, Egypt, Nigeria and Algeria.

According to the new study, under a business-as-usual scenario, where U.S. lands are not opened up for drilling, by 2030, U.S. consumers could be relying on LNG imports for as much as 30 percent of total supply. This has strong implications for security of natural gas supply, as the United States becomes more reliant on LNG from the Middle East and Africa. U.S. end-use natural gas demand is expected to climb to 23.9 (tcf) in 2015 and 26.9 tcf by 2025, up from 20.0 tcf in 2006, according to study forecasts. This represents a gain of about 1.3 percent per year.

"Studies of the market outlook show that our high cost domestic production will increasingly have to compete against a swath of more competitively priced imports," said Kenneth Medlock, fellow for energy studies at the Baker Institute and a key author of the study. "In the short term, the net impacts on U.S. supply security are not all that worrisome. But long term, as our demand grows, we will have to worry more about security of supply."

In recent years, environmental and land-use considerations have prompted the United States to remove from energy development significant acreage that was once available for exploration. Twenty years ago, nearly
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Contact: David Ruth
druth@rice.edu
713-348-6327
Rice University
Source:Eurekalert

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