From the Editor - March 2012

Annually, EIA prepares long-term energy outlooks, looking forward to the next 20 to 25 years. Howard Gruenspecht, Acting Administrator of the EIA, recently discussed the outlook for U.S.and global energy before the U.S. Senate Committee on Energy and Natural Resources. Citing from the EIA

report Annual Energy Outlook 2012,Gruenspecht provided these forecasts for the future of energy through 2035.

 

Production: U.S.domestic crude oil production is expected to grow by more than 20 percent over the next 10 years. Continued development of tight oil combined with the development of offshore Gulf of Mexicoresources are projected to push domestic crude oil production to 6.7 million barrels per day in 2020, a level not seen since 1994.

 

Imports: Net petroleum imports would provide a smaller share of U.S.total liquids consumption. Dependence on imported petroleum is expected to decline, primarily as results of: growth in domestic oil production of over 1 million barrels per day by 2020; an increase in biofuel use of over 1 million barrels per day crude oil equivalent by 2024; and only modest growth in transportation sector demand through 2035. Net petroleum imports as a share of total U.S.liquid fuels consumed is projected to drop to 38 percent by 2020 and 36 percent by 2035.

 

Exports: The U.S.is projected to become a net exporter of liquefied natural gas (LNG) in 2016, a net pipeline exporter in 2025, and an overall net exporter of natural gas in 2021. The outlook reflects increased use of LNG in markets outside of North America, strong domestic natural gas production, and low natural gas prices in the

U.S.as compared to other global markets.

 

Electric Power: The U.S.electric power sector reliance on coalfired plants would decline due to competition from natural gas and renewable plants, together with the need to comply with new environmental regulations. Over the next 25 years, the projected coal share of overall electricity generation would fall to 39 percent, well below the 49 percent share seen as recently as 2007. The natural gas share of electric power generation would increase from 24 percent by 2010 to 27 percent by 2035. Renewables share of electric power generation would grow from 10 percent to 16 percent over the same period.Overall, the fossil fuel share of U.S.energy consumption is forecast to fall from 83 percent of total energy demand in 2010 to 77 percent of total energy demand in 2035.

 

Globally: Fossil fuels are expected to remain the dominant source of energy worldwide. World oil prices will remain high, liquids consumption will continue to grow, and both conventional and unconventional liquid supplies will be needed to meet rising demand. Natural gas will have the fastest growth rate among the fossil fuels over the next 25 years, where unconventional resources, including tight gas, shale gas, and coal bed methane, are predicted to increase supplies substantially. Renewable energy is projected to be the fastest growing source of primary energy over the next 25 years. The renewable share of total energy used is anticipated to increase from 10 percent in 2008 to 15 percent in 2035.

 

The EIA recognizes that outlooks of future energy markets are highly uncertain and are subject to geopolitical disruptions, technological breakthroughs, long-term trends in economic growth, and the evolution of laws, regulation and resource availability. What says your crystal ball?