There are a number of important takeaways from the U.S. Energy Information Administration’s new Annual Energy Outlook 2013 released this week, which projects energy needs and supplies from now until 2040.
Let’s start with the energy we’re going to need. Demand is projected by EIA to grow slowly, from 97.7 quadrillion Btu in 2011 to 107.74 quadrillion Btu in 2040. Because of greater domestic production of all types of energy the U.S. will inch toward self-sufficiency, EIA says, as the gap between total usage and total domestic production shrinks from 19 percent in 2011 to 9 percent in 2040. “Growth in energy production is outstripping growth in consumption,” said EIA Administrator Adam Sieminski. “We’re going to see a decline in net imports.”
That’s good news, but here’s more: Increased energy efficiency (more below) and the fact we have oil and natural gas, which play such a major role in running our economy and supporting our modern way of living. EIA says oil and gas, which now supply 62 percent of the energy we use, will supply 60 percent of our energy in 2040 – led by a rise in affordable, plentiful natural gas. Reliable energy sources – today and tomorrow. EIA's chart:
Again, you can access EIA’s report here, for a wealth of energy-related information. Highlights:
Energy and emissions intensity – EIA projects three metrics will decline, as compared to the 2005 benchmark year: Energy use per capita, energy use per 2005 dollar of GDP and carbon dioxide emissions per 2005 dollar of GDP. All point to increased energy efficiency and rising use of clean-burning natural gas. More from Sieminski here.
Oil imports, domestic oil production – EIA projects domestic oil production will continue to rise over the next few years and that by 2040 U.S. net imports will fall to 37 percent from 45 percent in 2011 (and from 60 percent in 2005). More from Sieminski on imports here .That’s a credit to rising domestic production due in no small part to fracking. EIA says tight oil production will lead a growth in domestic crude production of 2.6 million barrels per day between 2008 and 2019. After peaking then, domestic production is projected to be 6.13 million barrels per day in 2040. Sieminski, on the effect of domestic oil production in the global crude market:
“Clearly, we would be less susceptible to problems in the global markets. It would be good for our economy to have greater production. … I think it is really important for everybody to understand that continuing investment in energy generally and in oil specifically is going to be required around the world to meet the growing needs of consumers in Asia, the Middle East and Latin America – whether the U.S. becomes self-sufficient or energy independent or not.”
More from Sieminski on domestic crude production here.
Shale natural gas – EIA projects U.S. dry natural gas production will increase from 23 trillion cubic feet in 2011 to more than 33 tcf in 2040, led by rapid growth in natural gas from shale – again, developed with fracking. Sieminski:
“Driving everything on the gas production side is shale gas. … Shale gas continues to be the major contributor to increased natural gas production, going from about 7.8 trillion cubic feet in 2011 – that was about a third of domestic gas production – up to 16.7 tcf in 2040, when it will be half of domestic production.”
U.S. as natural gas exporter – EIA projects 2020 as the point at which domestic supply will exceed domestic consumption – attributable to natural gas from shale via fracking. The projection makes no assumptions about policy changes that might permit additional LNG export facilities (the subject of an Energy Department study released this week). More from Sieminski here.
EIA’s projections are important in telling us where we’re headed in terms of energy. What they don’t show is where we could be. Growth in domestic oil and natural gas production that has been picked up in EIA’s numbers could be larger with pro-energy development policies in place. With them we could see increased production of oil and gas, job creation, reduced imports, more investment in our economy and an improved trade balance.