The United States in 2016 remained the world's top natural gas and petroleum hydrocarbon producer for the fifth year in a row, even with declines relative to 2015 levels, the Energy Information Administration (EIA) said Wednesday.
Since 2009 the United States has been the world's largest natural gas producer, exceeding Russia, and it has been the leading petroleum producer since 2013, when output exceeded Saudi Arabia. The United States also is on track to be the largest gas producer to at least 2035, according individual projections by BP plc and ExxonMobil Corp.
"For the United States and Russia, total petroleum and natural gas hydrocarbon production in energy content terms is almost evenly split between petroleum and natural gas, while Saudi Arabia's production heavily favors petroleum," EIA researchers said.
EIA defines petroleum production as coming from several different types of liquid fuels, including crude oil and lease condensate, tight oil, extra-heavy oil and bitumen. In addition, various processes produce natural gas plant liquids (NGPL), biofuels, and refinery processing gain, among other liquid fuels.
"In the United States, crude oil and lease condensate accounted for roughly 60% of total petroleum hydrocarbon production in 2016," EIA research led by principal contributor Linda Doman said. "In Saudi Arabia and Russia, this share is much greater, as those countries produce lesser amounts of NGPL, and they also have much smaller volumes of refinery gain and biofuels production."
U.S. petroleum production fell by 300,000 b/d in 2016, as a result of relatively low oil prices.
Domestic natural gas production grew rapidly through 2015. Following a mild 2015-2015 winter, which reduced demand for gas as a heating fuel, average prices last year were at their lowest level since 1999, EIA noted. Even with the modest recovery in prices late in 2016, gas production fell year/year by 2.3 Bcf/d.
Meanwhile, Russian hydrocarbon production has been rising as capital expenditures on exploration and production increased. Russia, EIA noted, also has favorable tax regimes and exchange rates that resulted in record levels of petroleum production in the second half of 2016.
"Russian natural gas production also rose in 2016, in part to meet growth in European natural gas demand. In 2016, natural gas demand increased by an estimated 6% in European countries that are members of the Organization for Economic Cooperation and Development (OECD)."
Saudi Arabia did not reduce its petroleum production between late 2014 and 2016, unlike in the past when it raised or lowered levels to balance global oil markets, even as prices remained low and world oil inventories grew. Last year Saudi Arabia's total natural gas and petroleum hydrocarbon output rose by 3% from 2015.
According to EIA's Short-Term Energy Outlook (STEO) for June, dry natural gas production is expected to average 73.3 Bcf/d this year and 76.6 Bcf/d in 2018. U.S. petroleum and other liquid fuels production is expected to increase this year, reaching 15.6 million b/d in 2017 and 16.7 million b/d in 2018, up from 14.8 million b/d in 2016.
The June STEO is forecasting Russian liquid fuels production to average 11.18 million b/d over 2017 and 2018, close to its 2016 output of 11.24 million b/d.
The STEO also provides a production forecast for members of the Organization of the Petroleum Exporting Countries (OPEC) as a whole rather than for individual countries. In the latest outlook, OPEC liquid fuels production, which was 39.0 million b/d in 2017, is forecast to average 39.2 million b/d in 2017 and 39.9 million b/d in 2018, taking into account recent agreements among OPEC members and pledges by key allies, including Russia, to restrain output.
Last November, OPEC had agreed to production cuts that would last through the first half of 2017 and at its meeting in May, the cartel agreed to extend the cuts through March of 2018.