(MENAFN- AFP) US oil production will continue its surge to near the record 9.6 million barrels a day in 2016, the US Energy Department said Monday in its annual forecast.
Riding the gains in production from "tight" oil -- such as shale reserves tapped by hydraulic fracturing, or fracking, US crude output will add another 800,000 barrels a day over the next two years, the department's Energy Information Administration said.
After 2016, when production will be around the previous high set in 1970, oil output will stabilize and then begin tailing off beginning in 2020.
Natural gas production is expected to continue to surge mainly from fracking-based exploration, with the EIA predicting a rise of 56 percent between 2012 and 2040.
The forecast "shows that advanced technologies for crude oil and natural gas production are continuing to increase domestic supply and reshape the US energy economy as well as expand the potential for US natural gas exports," EIA administrator Adam Sieminski said in a statement.
Growing US domestic oil and gas production "is also reducing our net dependence on imported oil and benefiting the US economy as natural gas-intensive industries boost their output," he said.
The report projects improvement in the US energy balance to an economy becoming gradually less dependent on foreign sources of energy.
US oil production slipped as low as 5.1 million barrels a day in 2006, but topped 8 million in the first week of December.
US use of imported energy is seen falling from 16 percent of total consumption in 2012 to 4 percent in 2040.
Helping the fall in foreign energy dependence is declining gasoline consumption, as US drivers use more fuel-efficient cars, including hybrids, and drive less.
The report projects rising US exports of both oil and natural gas. More oil exports are seen "as lighter domestic crude is swapped out for the heavier crudes more commonly run in modern refineries," the EIA said.
The US is also projected to become a net exporter of liquefied natural gas in 2018, two years earlier than forecast in last year's EIA report. The Energy Department has given the go-ahead to several projects to export LNG.
The report comes as policy makers in Washington debate whether to end tight restrictions on US oil exports, a proposal favored by oil and gas producing companies.
Energy Secretary Ernest Moniz last week offered support for adjusting the US oil export ban, which was enacted after the oil shocks of the 1970s.
US output levels could still be influenced by the overall global supply and demand situation, Sieminski stressed Monday at Johns Hopkins University in Washington.
"Clearly there is a sensitivity" to prices, he said. But he added that improving drilling efficiencies could reduce production costs and enable US production to stay high even if prices decline.
The report identified some key shifts already taking place in the US energy industry. The generous supply and lower prices of natural gas will allow it to overtake coal as the leading fuel for power generation. In 2040, gas will comprise 35 percent of electricity generation, while coal will be 32 percent.
The rise of cheap gas will also enhance the development of gas-intensive industries, like chemicals and metal-based durable goods.
Despite that, for the economy overall, energy use per dollar of production will fall by 43 percent between 2012 and 2040, as the economy's less energy-intensive services sector grows.
Over the same period the share of fossil fuels in the US energy mix will fall to 80 percent from 82 percent.
An important part of that gain will be a 25 percent fall in fuel used by motorists, despite a modest growth in the total distance traveled.
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