Energy Race to 2035: Renewables, Efficiency, Domestic Oil and Gas Win

WASHINGTON, DC, January 24, 2012 (ENS) – Increased oil, natural gas and renewable energy production within the United States and energy efficiency will lower U.S. reliance on coal and imported energy sources through 2035, finds the latest forecast by the U.S. Energy Information Administration, EIA, the statistical and analytical agency within the Department of Energy.

Energy-related emissions of the greenhouse gas carbon dioxide are projected to remain below their 2005 level through 2035.

The EIA Monday released its Annual Energy Outlook 2012 Reference case, which reflects only the effects of energy policies that have been implemented in law or final regulations.

EIA Acting Administrator Howard Gruenspecht said, “Our updated Reference case projections show natural gas and renewables gaining an increasing share of U.S. electric power generation, domestic crude oil and natural gas production growing, reliance on imported oil decreasing, U.S. natural gas production exceeding consumption, and energy-related carbon dioxide emissions remaining below their 2005 level through 2035.”

EIA Acting Administrator Howard Gruenspecht (Photo courtesy EIA)

Total U.S. primary energy consumption, which was 101.4 quadrillion Btu in 2007, grows from 98.2 quadrillion Btu in 2010 to 108.0 quadrillion Btu in 2035.

The fossil fuel share of energy consumption falls from 83 percent of total U.S. energy demand in 2010 to 77 percent in 2035.

“These projections reflect increased energy efficiency throughout the economy, updated assessments of energy technologies and domestic energy resources, the influence of evolving consumer preferences, and projected slow economic growth,” said Gruenspecht.

Net imports of energy meet a declining share of total U.S. energy demand as domestic energy production increases, the EIA forecasts.

North Allegheny Wind Park 95 miles east of Pittsburgh, Pennsylvania (Photo courtesy Duke Energy)

The projected net import share of total U.S. energy consumption in 2035 is 13 percent, compared with 22 percent in 2010 and 29 percent in 2007.

Domestic crude oil production is expected to grow by more than 20 percent over the coming decade. Domestic crude oil production increased from 5.1 million barrels per day in 2007 to 5.5 million barrels per day in 2010.

Over the next 10 years, continued development of tight oil combined with the development of offshore Gulf of Mexico resources are projected to push domestic crude oil production to 6.7 million barrels per day in 2020, a level not seen since 1994.

With modest economic growth, increased efficiency, growing domestic production, and continued adoption of nonpetroleum liquids, net petroleum imports make up a smaller share of total liquids consumption, the report projects.

U.S. dependence on imported petroleum liquids declines in the EIA’s 2012 Reference case, as a result of growth in domestic oil production of over one million barrels per day by 2020, an increase in biofuel use of over one million barrels per day crude oil equivalent by 2024, and modest growth in transportation sector demand through 2035.

Net petroleum imports as a share of total U.S. liquid fuels consumed drop from 49 percent in 2010 to 38 percent in 2020 and 36 percent in 2035, the report shows.

Jack Gerard, president and CEO of the American Petroleum Institute, welcomed the EIA’s new projection of increased domestic production of oil and natural gas by 2035. But with changes in policy, he said, America’s oil and natural gas industry could produce far more energy.

Oil production equipment on the Gulf Coast, July 24, 2011 (Photo by My Webmaster)

“The increases in domestic oil and gas production forecast by EIA will mean added jobs, revenue and energy security,” said Gerard. “This is progress, but it falls far short of what we could do with greater access to domestic supplies and sounder regulatory policies.”

“We hope the administration will look at the numbers and do what we’ve been asking them to do for a long time: work with us to produce at home even more of the oil and natural gas our nation will require,” Gerard said.

U.S. production of natural gas is expected to exceed consumption early in the next decade.

The United States is projected to become a net exporter of liquefied natural gas 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, reduced pipeline imports and increased pipeline exports, and relatively low natural gas prices in the United States compared to other global markets.

Use of renewable fuels and natural gas for electric power generation rises through 2035. The natural gas share of electric power generation increases from 24 percent in 2010 to 27 percent in 2035, and the renewables share grows from 10 percent to 16 percent over the same period.

The Henderson Two/Reid/Green coal-fired power plant in Kentucky (Photo by Michael Davis)

In recent years, the U.S. electric power sector’s historical reliance on coal-fired power plants has begun to decline, the report finds.

Over the next 25 years, the projected coal share of overall electricity generation falls to 39 percent, well below the 49 percent share seen in 2007. The EIA report explains this drop in coal share by citing slow growth in electricity demand, continued competition from natural gas and renewable plants, and the need to comply with new environmental regulations.

Bruce Nilles, senior director of the Sierra Club’s Beyond Coal Campaign, said, “For many years the Energy Information Agency has exaggerated coal’s prospects for the future, and every year has had to downgrade its projections. Today EIA again downgraded coal’s future, though we know coal’s future is even darker than EIA is predicting.”

“We expect the vast majority of coal plants to be retired no later than 2030,” said Nilles. “We agree, however, with EIA’s prediction that no new coal plants will break ground in the future because clean energy is more cost effective, and we expect even more coal plant retirements.”

Total U.S. energy-related CO2 emissions stay below their 2005 level through 2035, says the EIA.

Electricity-related emissions are tempered by appliance and lighting efficiency standards, state renewable portfolio standard requirements, competitive natural gas prices that dampen coal use by electric generators, and implementation of the Cross-state Air Pollution Rule.

As growth in demand for transportation fuels is moderated by higher energy prices and federal fuel economy standards, CO2 emissions per capita fall by an average of one percent per year from 2005 to 2035, the EIA projects.

The Obama administration’s proposed fuel economy standards covering model years 2017 through 2025 are not included in the Reference case but, if finalized, the agency says they would further reduce projected energy use and emissions.

Copyright Environment News Service (ENS) 2012. All rights reserved.