EIA predicts 32% increase in US energy demand by 2020
US energy demand will increase 32% over 2000 to 131 quadrillion btu in 2020, assuming no changes in federal laws and regulations, said the US Energy Information Administration in its Annual Energy Outlook.
By the OGJ Online Staff
HOUSTON, Dec. 26 -- US energy demand will increase 32% from 2000 to 131 quadrillion btu in 2020, assuming no changes in federal laws and regulations, said the US Energy Information Administration in its Annual Energy Outlook (AEO).
"Total energy consumption is expected to increase more rapidly than domestic energy production through 2020. As a result, net imports of energy are projected to meet a growing share of energy demand," said the agency.
It predicts US crude oil production will decline at an average annual rate of 0.2% from 2000 to 2020, to 5.6 million b/d. The prediction for 2020 is higher than in EIA's 2001 outlook because of anticipated production from more fields in the National Petroleum Reserve-Alaska, due to begin in 2010.
"Increasing demand for petroleum is projected to raise the share of demand met by net imports from 53% in 2000 to 62% in 2020 (lower than the 64% share in AEO 2001, due to higher domestic production)," it said.
It projects the average world oil price will begin increasing gradually after the New Year, after reaching $22.48 for 2001. The average oil price for 2000 was $27.72.
The EIA predicts increases in demand will push 2020's average oil price, in 2000 dollars, to $24.68. In last year's Energy Outlook, the 2020 prediction was $22.92.
It said the Organization of Petroleum Exporting Countries' effectiveness in managing oil production, and the generally slow response of non-OPEC supply to higher world oil prices, contribute to its higher prediction.
The agency predicts world oil demand will increase to 118.9 million b/d in 2020 from 76 million b/d in 2000, in part because of higher demand in the US and developing countries, including in the Pacific Rim and Central and South America. However, OPEC production is expected to reach 57.5 million b/d in 2020, nearly twice 2000's number. Non-OPEC production will reach 61.1 million b/d by 2020.
"Growth in oil production from OPEC and non-OPEC nations is the driver for the relatively slow growth of prices through 2020," said the EIA.
The agency also expects the average wellhead price of natural gas to reach nearly $4/Mcf in 2001, after a 2000 price of $3.60/Mcf.
After the New Year, the average natural gas price will decline sharply, said the EIA, which projects a 2020 natural gas price of $3.26/Mcf. Last year's Energy Outlook called for a 2020 price of $3.20/Mcf.
"Although projected natural gas demand in 2020 is 1 tcf lower than projected in [the 2001 Energy Outlook], the price is expected to be higher due to a less optimistic assessment of natural gas reserves discovered by exploratory drilling," said the EIA.
"The transmission and distribution margins to electricity generators are projected to be higher than in AEO2001, under the assumption that generators will pay higher rates to guarantee pipeline capacity, particularly as natural gas is expected to be used more for baseload and intermediate-load generation."
The EIA said average electricity prices are projected to decline from 6.9¢/kw-hr in 2000 to 6.5¢/kw-hr in 2020, higher than the 6.1¢/kw-hr projected for 2020 in AEO2001, due to higher projections for natural gas prices; electricity demand, particularly in the commercial sector; and natural gas margins to electricity generators.
It said electricity industry restructuring will contribute to declining projected prices. "Electricity prices are projected to decline to 6.3¢/kw-hr by 2006 then rise in the last 5 years of the forecast as natural gas prices rise."