Adam Sieminski has led the US Energy Information Administration long enough to know the initial Annual Energy Outlook of the new year can be difficult. Markets can be unpredictable, and make forecasts hard. Policy uncertainty as the Obama administration ends and the Trump presidency begins has made matters worse.
Consequently, Sieminski's first point when he spoke at Johns Hopkins School for Advanced International Studies on Jan. 5 was that he doesn't know whether Barack Obama's Clean Power Plan will be repealed.
The 2017 AEO includes it because it's existing law, he explained. The same applies to federal methane emissions limits.
Not having the CPP would give the US its highest future carbon dioxide emissions because coal would continue to be used, the EIA administrator said. "In terms of fuels, petroleum is the biggest emitter of CO2, followed by natural gas because we're using more of it," he noted.
Once he disposed of such distractions, however, Sieminski moved into more familiar underlying factors. "Our reference case economic growth assumption is 2.2%-relatively modest compared to what occurred over the past several years," he said. "Energy consumption doesn't vary much among assumption cases because it is driven so much by economic growth."
EIA expects gas demand to keep climbing because there would be more incentive to use it with higher crude oil prices, he said. "Even without the CPP, more gas will be used to generate power and in industries," Sieminski said.
"Pipeline exports to Mexico will go up in the near term, then flatten. We also expect US gas exports to Canada because there a lot of consumers in the eastern part of that country could use it," he said.
Industrial energy consumption could be driven not just by crude oil, but also gas liquids and other gas feedstocks for chemicals and petrochemicals, Sieminski said. But he suggested that the biggest difference could be new technology.
Will it be CCS?
"Fifteen years from now, somebody may figure carbon capture and sequestration out and it will make as big a difference as hydraulic fracturing and horizontal drilling did on the production side," he said. "A lot of people believe that finding a way to do this will be increasingly important. Even some natural gas will need to be sequestered to achieve desired levels."
Sieminski said it might be interesting to look at research and development that DOE's Fossil Energy Office has supported in the past. "There's still some under way," he said. "The US had a tremendous advantage because smaller oil and gas producers had a healthy risk appetite and pushed for more R&D investment. This could make a difference in CCS too."
