EIA sees 32% gain in US energy demand by 2020


The US Energy Information Administration says with a growing economy, US energy demand is projected to increase 32% from 1999 to 2020, reaching 127 quadrillion btu, assuming no changes in Federal laws and regulations.

But it said faster or slower economic growth, or use of energy-efficient and renewable energy sources, could change the forecast.

EIA's annual energy outlook noted that economic growth is a major determinant of both energy demand and carbon dioxide emissions. Its reference case assumes US gross domestic product (GDP) will grow at 3%/year from 1999 through 2020.

But it said if the economy grows 3.5%/year, the demand for energy in 2020 is projected to be 7% higher than the reference case level of 127 quadrillion btu, and projected carbon dioxide emissions increase by 152 million metric tons carbon equivalent, or 7%, in 2020, compared to the reference case.

It said if the economy grows 2.5%/year, energy demand is projected to be 6% lower in 2020 than in the reference case, and projected carbon dioxide emissions would be reduced by 125 million metric tons carbon equivalent, or 6%, in 2020.

EIA said in its reference case, the energy intensity of the US economy, measured as energy used per dollar of GDP, is projected to decline 1.6%/year through 2020 as more efficient energy-using technologies become available and penetrate the market. In a high technology case, more rapid improvement in the cost and efficiencies of advanced technologies and in their adoption than assumed in the reference case is projected to lower energy demand by 6% and carbon dioxide emissions by 166 million tonnes carbon equivalent, or 8%, in 2020, relative to the reference case

It said technology could also develop at a slower rate than in the reference case. Assuming that the efficiencies of energy-using technologies do not change from those available today increases projected energy demand by 5% and carbon dioxide emissions by 116 million tonnes carbon equivalent, or 6%, in 2020.

EIA said its reference case reflects legislation in eight states to ban or limit the use of methyl tertiary butyl ether in reformulated gasoline. In an alternative case, it assumed MTBE and other ethers would be banned throughout the US with a waiver of the 2% oxygen requirement. It said that would raise gasoline prices 3 to 4�/gal (1999 dollars) in the 2004 to 2006 period, compared to the reference case.

It said the reference case assumes technology improvements in oil and natural as exploration and production that lower costs and improve finding and success rates. Alternative cases that assume more rapid and slower technology improvements than in the reference case show the impact on projected gas prices. In the reference case, projected gas prices decline from more than $5/Mcf in 2000 to $3.13/Mcf in 2020 (1999 dollars). In 2020, prices are projected to range from $4.23/Mcf in the slow technology case to $2.50 in the rapid technology case.

EIA said natural gas projections also are highly sensitive to the assumptions for the domestic resource base. Gas prices in 2020 are projected to reach $2.62/Mcf in a high oil and gas resource case, which assumes 20% higher conventional resources and inferred reserves and 40% higher unconventional gas resources, and $4.53/Mcf in a low oil and gas resource case, which assumes 20 and 40% lower resources, respectively.

In 2020, projected natural gas production ranges from 24.6 tcf to 30.4 tcf in the low and high resource cases, compared to 29 tcf in the reference case. In 2020, crude oil production is projected to range from 4.6 to 5.5 million b/d in the same resource cases, compared to 5.1 million b/d in the reference case.

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