Natural gas leads an upward trend in fossil fuel production that will continue to break records through 2019, according to Energy Information Administration (EIA) forecasts. The Trump administration expects U.S. fossil fuel production will reach a new high of 73 quadrillion British thermal units (Btu) in 2018, an amount capable of sustaining worldwide industrial sector energy use for the year. Production is on track to set another record in 2019 at 75 quadrillion Btu.
The projection accounts for all fossil fuels: dry natural gas, crude oil, coal and hydrocarbon gas liquids (HGL). However, natural gas appears to lead the increase in overall production. EIA attributes the heightened production levels to hydraulic fracturing in tight rock formations that is allowing for a growing harvest of fuels. While coal production continues to shrink, expanding production of natural gas, crude and HGL should make up for those losses.
On a heat-content basis, dry natural gas accounted for the largest share of fossil fuel production in 2017 at 41 percent. Crude oil accounted for 29 percent, coal for 23 percent, and HGL for the remaining 7 percent of the total. As recently as 2010, coal was the leading source of U.S. fossil fuel production, but it was surpassed by dry natural gas in 2011 and by crude oil in 2015.
In 2018, EIA forecasts dry natural gas production will average 80.4 billion cubic feet per day (Bcf/d), an increase of 9 percent from 2017. If achieved, this level of production would be the highest on record, surpassing the current record of 74.2 Bcf/d set in 2015. EIA forecasts dry natural gas production will set another record with 83.0 Bcf/d in 2019. Growth is likely to be concentrated in Appalachia’s Marcellus and Utica shale deposits and the Permian Basin in Texas and New Mexico.
EIA expects total U.S. crude oil production to average 10.3 million barrels per day (b/d) in 2018, up 10 percent from 2017. If achieved, this would be the highest average ever, surpassing the current record of 9.6 million b/d set in 1970. In 2019, EIA expects crude oil production to continue to increase, reaching an average of 10.8 million b/d.
Increased production from the Permian region in Texas and New Mexico accounts for most of the projected increase in the U.S. total. EIA also expects a significant contribution to crude oil production growth from the Federal Gulf of Mexico, as seven new oil-producing projects are slated to come online by the end of 2019.
EIA forecasts coal production will total 759 million short tons (MMst) in 2018, down 2 percent from 2017. Coal production is expected to fall to 741 MMst in 2019, a further 2 percent decline from 2018. In both years, EIA expects production declines in the Appalachia and Western producing regions to be partially offset by production increases in the Interior producing region.
U.S. coal consumption also is projected to fall the next two years. About 90 percent of domestic coal consumption occurs in the electric power sector, and EIA expects relatively low natural gas prices to reduce demand for coal used to produce electricity. EIA expects demand for U.S. coal exports to fall in 2018 and 2019 after a slight increase in 2017.
Growth in crude oil production, especially in the Permian Basin region, is projected to result in increased associated natural gas production and to contribute to growing HGL production at natural gas processing plants. EIA forecasts HGL production will average 4.2 million b/d in 2018 and 4.6 million b/d in 2019.