This is part of the executive summary from the Annual energy Outlook 2012 from the DOE.
The projections in the U.S. Energy Information Administration’s (EIA’s) Annual Energy Outlook 2012 (AEO2012) focus on factors that shape the U.S. energy system over the long term. Under the assumption that current laws and regulations remain unchanged throughout the projections, the AEO2012 Reference case provides the basis for examination and discussion of energy production, consumption, technology, and market trends and the direction they may take in the future. It also serves as a starting point for analysis of potential changes in energy policies. But AEO2012 is not limited to the Reference case. It also includes 29 alternative cases which explore important areas of uncertainty for markets, technologies, and policies in the U.S. energy economy. Many of the implications of the alternative cases are discussed in the “Issues in focus” section of this report.
Key results highlighted in AEO2012 include continued modest growth in demand for energy over the next 25 years and increased domestic crude oil and natural gas production, largely driven by rising production from tight oil and shale resources. As a result:
- U.S. reliance on imported oil is reduced
- Domestic production of natural gas exceeds consumption, allowing for net exports
- A growing share of U.S. electric power generation is met with natural gas and renewables, and
- Energy-related carbon dioxide emissions remain below their 2005 level from 2010 to 2035, even in the absence of new Federal policies intended to mitigate greenhouse gas (GHG) emissions.
The rate of growth in energy use slows over the projection period, reflecting moderate population growth, an extended economic recovery, and increasing energy efficiency in end-use applications
Overall U.S. energy consumption grows at an average annual rate of 0.3% from 2010 through 2035 in the AEO2012 Reference case. The U.S. does not return to the levels of energy demand growth experienced in the 20 years prior to the 2008-2009 recession, because of more moderate projected economic growth and population growth, coupled with increasing levels of energy efficiency. For some end uses, current Federal and State energy requirements and incentives play a continuing role in requiring more efficient technologies. Projected energy demand for transportation grows at an annual rate of 0.1% from 2010 through 2035 in the Reference case, and electricity demand grows by 0.7%/year, primarily as a result of rising energy consumption in the buildings sector. Energy consumption per capita declines by an average of 0.6%/year from 2010 to 2035. The energy intensity of the U.S. economy, measured as primary energy use in British thermal units (Btu) per dollar of gross domestic product (GDP) in 2005 dollars, declines by an average of 2.1% per year from 2010 to 2035. New Federal and State policies could lead to further reductions in energy consumption. The potential impact of technology change and the proposed vehicle fuel efficiency standards on energy consumption are discussed in “Issues in focus.”
Domestic crude oil production increases
Domestic crude oil production has increased over the past few years, reversing a decline that began in 1986. U.S. crude oil production increased from 5.0 million barrels/day in 2008 to 5.5 million barrels/day in 2010. Over the next 10 years, continued development of tight oil, in combination with the ongoing development of offshore resources in the Gulf of Mexico, pushes domestic crude oil production higher. Because the technology advances that have provided for recent increases in supply are still in the early stages of development, future U.S. crude oil production could vary significantly, depending on the outcomes of key uncertainties related to well placement and recovery rates. Those uncertainties are highlighted in this Annual Energy Outlook’s “Issues in focus” section, which includes an article examining impacts of uncertainty about current estimates of the crude oil and natural gas resources. The AEO2012 projections considering variations in these variables show total U.S. crude oil production in 2035 ranging from 5.5 million barrels/day to 7.8 million barrels/day, and projections for U.S. tight oil production from eight selected plays in 2035 ranging from 0.7 million barrels/day to 2.8 million barrels/day.
With modest economic growth, increased efficiency, growing domestic production, and continued adoption of nonpetroleum liquids, net imports of petroleum and other liquids make up a smaller share of total U.S. energy consumption
U.S. dependence on imported petroleum and other liquids declines in the AEO2012 Reference case, primarily as a result of:
- Rising energy prices;
- Growth in domestic crude oil production to more than 1 million barrels/day above 2010 levels in 2020;
- An increase of 1.2 million barrels/day crude oil equivalent from 2010 to 2035 in the use of biofuels, much of which is produced domestically; and
- Slower growth of energy consumption in the transportation sector as a result of existing corporate average fuel economy standards. Proposed fuel economy standards covering vehicle model years 2017 through 2025 that are not included in the Reference case would further reduce projected need for liquid imports.
Although U.S. consumption of petroleum and other liquid fuels continues to grow through 2035 in the Reference case, the reliance on imports of petroleum and other liquids as a share of total consumption declines. Total U.S. consumption of petroleum and other liquids, including both fossil fuels and biofuels, rises from 19.2 million barrels/day in 2010 to 19.9 million barrels/day in 2035 in the Reference case. The net import share of domestic consumption, which reached 60% in 2005 and 2006 before falling to 49% in 2010, continues falling in the Reference case to 36% in 2035. Proposed light-duty vehicles fuel economy standards covering vehicle model year 2017 through 2025, which are not included in the Reference case, could further reduce demand for petroleum and other liquids and the need for imports, and increased supplies from U.S. tight oil deposits could also significantly decrease the need for imports, as discussed in more detail in “Issues in focus.”
Natural gas production increases throughout the projection period, allowing the United States to transition from a net importer to a net exporter of natural gas
Much of the growth in natural gas production in the AEO2012 Reference case results from the application of recent technological advances and continued drilling in shale plays with high concentrations of natural gas liquids and crude oil, which have a higher value than dry natural gas in energy equivalent terms. Shale gas production increases in the Reference case from 5.0 trillion ft3/yr in 2010 (23% of total U.S. dry gas production) to 13.6 trillion ft3/yr in 2035 (49% of total U.S. dry gas production). As with tight oil, when looking forward to 2035, there are unresolved uncertainties surrounding the technological advances that have made shale gas production a reality. The potential impact of those uncertainties results in a range of outcomes for U.S. shale gas production from 9.7 to 20.5 trillion ft3/yr when looking forward to 2035.
As a result of the projected growth in production, U.S. natural gas production exceeds consumption early in the next decade in the Reference case. The outlook reflects increased use of liquefied natural gas in markets outside North America, strong growth in domestic natural gas production, reduced pipeline imports and increased pipeline exports, and relatively low natural gas prices in the United States.
Power generation from renewables and natural gas continues to increase
In the Reference case, the natural gas share of electric power generation increases from 24% in 2010 to 28% in 2035, while the renewables share grows from 10% to 15%. In contrast, the share of generation from coal-fired power plants declines. The historical reliance on coal-fired power plants in the U.S. electric power sector has begun to wane in recent years.
Download the full report from here: http://www.eia.gov/forecasts/aeo/pdf/0383%282012%29.pdf
U.S. Energy Information Administration
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