US EIA projects higher long-term crude prices
By the OGJ Online Staff
WASHINGTON, DC, Nov. 14 -- The US Energy Information Administration Wednesday projected the world oil price will be $24.68/bbl in 2020, about $2/bbl higher than the agency forecast last year.
EIA assumed in its new annual forecast that US energy demand will grow at an average of 1.4%/year over the next 19 years; that assumes the economy will grow at an average 3%/year, with the current slowdown ending by next summer. All projections are in 2000 dollars.
EIA Acting Administrator Mary Hutzler stressed that the long-term forecast is only a projection and "is not a prediction of the future. It's a baseline." The forecast could change, for example, if Congress passed new energy legislation that affected US supply and demand. EIA will release a full report next month.
Assuming the status quo however, EIA said, there will be higher prices over the next 2 decades, mainly reflecting higher transportation fuel demand in the US, South America, and Asia, Hutzler said. World oil demand is projected to increase to 119 million b/d by 2020, up from 76 million in 2000. The projected demand for 2020 is higher by 1.5 million b/d than last year's assessment.
US imports
Imports will continue to be a key part of the US energy mix, EIA found. Oil imports will grow to 62% from 53% over the next 2 decades, the agency said. But that oil import number is slightly lower than the 64% level projected last year.
US crude production is expected to decline to 5.6 million b/d from 5.8 million. This 2020 forecast is 0.6 million b/d higher than last year's, due to production from more fields in the National Petroleum Reserve-Alaska, which is expected to begin in 2010. Projected increases in natural gas plant liquids production and refinery gains also led EIA to increase the total US petroleum production projection compared to last year's.
Natural gas
EIA said natural gas prices reached record levels in 2001, due to a cold winter and tight supplies, resulting from reduced drilling in reaction to low prices in 1998 and 1999.
The average wellhead price is projected to decline sharply in 2002, then begin a gradual increase to 2020, reaching $3.26/Mcf. EIA said the projected price is slightly higher than last year's forecast, even though natural gas demand is expected to be lower because of lower assumed finding rates.
Gas production is expected to increase to 28.5 tcf in 2020 from 19.1 tcf in 2000 to meet growing demand, mainly from electric generators.
Carbon emissions
Carbon dioxide emissions from energy use are projected to increase 1.5%/year between 2000 and 2020. Higher projected CO2 emissions are largely due to higher energy demand in the commercial and transportation sectors and higher coal-fired electricity generation.