Growth in US Energy Production Outstripping Growth in
Consumption
From: David A Gabel, ENN.com
In a recently released report, the Annual Energy Outlook 2013
(AEO2013), the US Energy Information Administration (EIA) projected the US
energy markets through 2040. Their projections only take into account the
effects of policies that have already been implemented in law or final
regulations.
The EIA found that the growth in energy production has outweighed
the growth in consumption. This is due to many factors including rising crude
oil and natural gas production through advanced technologies, new fuel economy
requirements, and the increase in renewable fuels such as solar and wind. The
result, EIA predicts, will be lower net CO2 emissions, five percent below the
2005 levels through 2040.
The following are some of the key findings from the AEO2013
Report:
Rising Crude Oil Production. Continuing
improvement of advanced technologies will continue to increase domestic supply.
Production will grow annually at an average 234 thousand barrels per day (bpd)
from 2011 to 2019, when it will reach 7.5 million bpd. The majority of growth
will come from shale and other tight formations. After 2020, production will
decline by 2040 to 6.1 million bpd as all of the "sweet spots" are
depleted.
Stricter Fuel Economy Standards. The corporate average
fuel economy (CAFE) standards are set to increase for light duty vehicles from
32.6 mpg in 2011, to 47.3 mpg in 2025. The increased efficiency will reduce
gasoline consumption in the transportation sector by 0.5 million bpd in 2025,
and by 1 million bpd in 2035. Plus, the use of natural gas fuels for heavy duty
vehicles is expected to increase, offsetting a portion of diesel fuel
consumption.
Natural Gas Boom Makes US a Larger Exporter. By 2020,
the US is predicted to become a net exporter of natural gas as it will outpace
domestic consumption. Most of the increase will come from shale gas production.
Renewable Fuel Use Grows Faster than Fossil Fuel Use. The EIA
predicts that electricity generation from renewables will grow from 13 percent
in 2011 to 16 percent in 2040. Cost declines will make solar and wind more
economical over time. Biomass fuels on the other hand, are expected to not rise
as much and will unlikely capture a growing share of the liquid fuels market.
CO2 Emissions Remain Below 2005 Levels in 2040. Since
2005, the projected growth in CO2 emissions has been declining. Shifts in
consumer behavior, CAFE standards, and biofuel mandates are all factors.
Coal-fired power plants are giving way to lower-carbon fuels for electricity
production.
Plus, the implementation of efficiency standards for energy-using
equipment will result in lower emissions per capita.
EIA Adminstrator Adam Sieminski summarizes, "EIA's updated
Reference case shows how evolving consumer preferences, improved technology,
and economic changes are pushing the nation toward more domestic energy
production, greater vehicle efficiency, greater use of clean energy and reduced
energy imports. This combination has markedly reduced projected energy-related
carbon dioxide emissions."