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A worker cleans up leaked oil after last week A worker cleans up leaked oil after last week's explosion of a Sinopec Corp oil pipeline in Huangdao, Qingdao, Shandong Province November 25, 2013. REUTERS/Aly Song  

Is this is the era of US energy dominance?

The U.S. is expected to see booming oil and gas production for years to come, with the country expected to produce near historic high levels of oil by 2016 and natural gas extractions expected to increase through 2040. But energy experts warn that American energy dominance can be threatened by excessive government regulation.

This comes on the heels of reports that the U.S. will become the world’s largest oil and natural gas producer next year, beating out Russia and Saudi Arabia. Could this be the beginning of the era of American energy dominance?

“America is in the midst of a game-changing energy revolution,” said American Petroleum Institute Chief Economist John Felmy. “This potential has been unlocked by innovations in hydraulic fracturing and horizontal drilling that have made America the world’s top energy producer.”

The widespread use of hydraulic fracturing, or fracking, and horizontal drilling has allowed energy producers to unlock vast reserves of shale oil and gas buried deep underground, creating an energy boom and revitalizing the economies of states like North Dakota and Pennsylvania.

The Energy Information Administration (EIA) is predicting that the U.S. energy boom is far from over. By 2016, domestic crude oil production is expected to come close to the near historic high of 9 million barrels per day in 1970. After that oil production is expected to level off and slowly decline after 2020, according to EIA.

Natural-gas production, on the other hand, will shoot up 56 percent between 2012 and 2040 when the country will produce 37.6 trillion cubic feet of the fuel source. Rising production will keep gas prices low and provide a boost to domestic industries, such as manufacturing and shipping. Natural gas exports will also increase via pipeline and through liquified natural gas terminals. By 2030, liquified gas exports will reach 3.5 trillion cubic feet and pipeline exports to Canada and Mexico will grow as well.

Natural gas will continue to replace coal as the largest fuel source for generating electricity, according to EIA. Low gas prices and increasingly stringent environmental regulations have already forced many coal plants to retire, and this trend will continue for decades. By 2040, natural gas will produce 35 percent of the country’s electricity while coal will only produce 32 percent.

However, the American energy boom is far from a certainty, as oil and gas production could be handicapped by government interference — such as what has happened to coal through Environmental Protection Agency clean air and water rules.

“According to EIA’s analysis, coal continues to suffer the consequences of onerous regulatory activities and various federal and state programs that distort energy markets in favor of expensive renewables,” said Thomas Pyle, president of the Institute for Energy Research.

Virtually all of the increased oil and gas production in recent years has come on private and state lands, while production on federal lands has fallen dramatically. Under President Barack Obama, oil production on federal lands has fall from 1,731,500 barrels per day in 2009 to 1,627,400 barrels per day in 2012. Natural-gas production on federal lands plummeted from 5,376 billion cubic feet in 2009 to 3,724 billion cubic feet  in 2012.

The Obama administration is also in the process of crafting new regulations for hydraulic fracturing, or fracking, on federal lands. Oil and gas producers have opposed such regulations, arguing that they are duplicative to existing state regulations and environmentalists argue that such regulations don’t go far enough to protect federal lands.

“As policymakers consider the long-term impacts of tax credits, mandates and existing restrictions on federal oil and gas production, EIA’s valuable projections should inform a shift toward free energy markets, consumer choice and the economic growth that our nation’s affordable energy resources can provide,” Pyle added.

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