The US won’t overtake Russia in gas exports in 2050

Photo: Simon Fraser University — University Communications / Flickr
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By 2020-2022, the US plans to become a net exporter of energy resources and by 2050 to maximize its sales abroad. However, according to a forecast of the US Energy Information Administration (EIA), even in 32 years and under the most favorable conditions, the United States will not be able to exceed the export performance that Russia will meet next few years, regardless of the sanctions.

" The transition of the United States to a net energy exporter is fastest in the High Oil Price case, where higher crude oil prices lead to more oil and natural gas production and transition the United States into a net exporter by 2020. In that case, higher crude oil prices also result in higher petroleum product prices and lower consumption of petroleum products, driving decreases in net petroleum imports," the EIA said in a statement. According to it, in energy equivalent terms, the United States imported about 27 quadrillion British thermal units (quads) of energy in 2017 and exported 18 quads, which resulted in 9 quads of net imports. In 2017, the United States imported about 11 quads of petroleum and other liquids and exported 2 quads of coal and coal coke. U.S. natural gas trade in 2017 was nearly balanced between imports and exports.

By 2050, the US Energy Ministry predicts a significant increase in gas exports, which under high oil prices will amount to 236 billion cubic meters. With cheap oil, according to the EIA forecast, the volumes will amount to 174 billion cubic meters.

Russia, in turn, exported only 193 billion cubic meters last year, but after launching all the phases of the Yamal LNG project and reaching full capacity of the Power of Siberia gas pipeline to China will reach over 250 billion cubic meters.

As for oil, in the High Oil Price case, the EIA expects exports to grow to 423 million tons by 2050, while Russia produced 256 million tons last year. Low oil prices, according to the agency, will lead to the fact that oil producers will not benefit from increasing domestic production and the US will remain an importer of oil. Each year they will need 229 million tons of oil from abroad.

It's hard to say what forecast proves to be true. However, rising oil prices have already led to the fact that US oil and gas companies that do not participate in the OPEC freeze deal are increasing their output and are themselves pulling prices down. According to the EIA forecast, the US this year could outrun Russia and Saudi Arabia (11 million barrels per day) in terms of production. And this can negatively affect the world balance of supply and demand, which can bring the oil price down.

Vasily Tanurkov, the deputy director of ACRA analytical credit rating agency, believes that there are no contradictions in the current actions of American oil producers and they will always, first of all, focus on profit. "The logic is that if the prices are higher, then we extract more, and vice versa," says the expert.

Senior analyst of the National Energy Security Fund (NESF) Igor Yushkov believes that Americans expect growth of demand for oil and gas. "However, even in the countries of the Asia-Pacific region, the growth of demand will not keep up with the pace of increasing production in the United States at high prices for raw materials," the expert believes. To his mind the EIA publishes self-refuting forecasts for the future and they are meant more for investors who, supposedly, should invest more actively in shale gas production.

"At some point the forecast will come true, but additional volumes will crash the market and shale production will again become unprofitable and investors will be at a loss. After that, production will fall, and prices will again go up and new development will begin. And such a cycle will occur in the USA, as shale deposits have a short cycle," says Igor Yushkov.