EIA sees 32% gain in US energy demand by 2020

Jan. 15, 2001
With a growing economy, US energy demand is projected to increase 32% during 1999-2020, reaching 127 quadrillion btu (quads), assuming no changes in federal laws and regulations.
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With a growing economy, US energy demand is projected to increase 32% during 1999-2020, reaching 127 quadrillion btu (quads), assuming no changes in federal laws and regulations.

US Energy Information Administration says that faster or slower economic growth-or wider use of energy-efficient and renewable energy sources-could change the forecast.

Economy role

EIA's annual energy outlook noted that economic growth is a major determinant of both energy demand and emissions of carbon dioxide, a gas implicated in concerns over possible catastrophic global climate change. Its reference case assumes US gross domestic product will grow 3%/year during 1999-2020.

But it said that if the economy grows 3.5%/year, US demand for energy in 2020 is projected to be 7% higher than the reference case level of 127 quads (see chart), and projected CO2 emissions increase by 152 million tonnes of carbon equivalent (tce), or 7%, in 2020, compared with the reference case.

It said that if the economy grows 2.5%/year, energy demand is projected to be 6% lower in 2020 than in the reference case, and projected CO2 emissions would be reduced by 125 million tce, or 6%, in 2020.

Energy use patterns

EIA said that 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 CO2 emissions by 166 million tce, or 8%, in 2020, relative to the reference case.

EIA 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 will increase projected energy demand by 5% and CO2 emissions by 116 million tce, or 6%, in 2020.

EIA said that 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 3-4¢/gal (1999 dollars) during 2004-06, compared with the reference case.

Gas, oil scenarios

EIA said the reference case assumes technology improvements in oil and natural gas exploration and production that lower costs and improve finding and success rates.

Alternative cases that assume more-rapid or slower technology improvements than in the reference case show the impact on projected natural 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/Mcf in the rapid-technology case.

EIA said natural gas projections also are highly sensitive to assumptions for the US 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 with 29 tcf in the reference case.

In 2020, US crude oil production is projected to range from 4.6 million b/d to 5.5 million b/d in the respective low and high-resource cases, compared with 5.1 million b/d in the reference case.