U.S. production and consumption of natural gas is expected to increase and gas imports will decline in the coming years, according to the Energy Information Administration's (EIA) Annual Energy Outlook 2009 (AEO2009) reference case, an early summary of which was released last Wednesday. It presents updated projections through 2030.
These are among the report's findings: Domestic gas production rises on increased resource availability, largely attributable to unconventional resources such as gas shales, as well as production from the Outer Continental Shelf and Alaska. Demand rises on increased use of gas for power generation. The net share of gas imports is expected to decline from 16% in 2007 to less than 3% in 2030. Total domestic production of gas reaches 23.7 Tcf by 2030.
While exploration and production costs rise over time, higher natural gas prices support the projected level of production, EIA said. Onshore production of unconventional gas, including shale gas, increases from 9.2 Tcf in 2007 to 13.2 Tcf in 2030, a nearly 43.5% increase.
New natural gas and renewable power plants account for the majority of generating capacity additions. The natural gas share of electricity generation remains between 19% and 22% through 2030. Coal's generation share declines from 49% to 45% between 2007 and 2025, then rebounds slightly to 47% in 2030 as a small number of new coal plants are added.
Coal, oil and natural gas meet 79% of U.S. primary energy supply requirements in 2030, down from an 85% share in 2007.
Total electricity consumption, including both purchases from electric power producers and on-site generation, grows from 3,903 billion kWh in 2007 to 4,902 billion kWh in 2030.
For the first time in more than two decades, the AEO reference case projects virtually no growth in U.S. oil consumption. This is due to recently enacted corporate average fuel economy standards for vehicles, increased use of renewable fuels and an assumed rebound in oil prices as the world economy recovers. "With overall liquid fuel demand in the AEO2009 reference case growing by only 1 million b/d between 2007 and 2030, increased use of domestically produced biofuels and rising domestic oil production spurred by higher prices, the net import share of total liquids supplied, including biofuels, declines from 58% in 2007 to less than 40% in 2025 before increasing to 41% in 2030," EIA said.
"In 2007 dollars, the world crude oil price, averaging near $60 in 2009, rises as the global economy rebounds and global demand once again grows more rapidly than non-OPEC liquids supply," the report said. "In 2030, the average real price of crude oil is $130/bbl in 2007 dollars ($189/bbl in nominal dollars)."
Consumption of marketed renewable fuels -- including wood, municipal waste and biomass in the end-use sectors; hydroelectricity, geothermal, municipal waste, biomass, solar and wind for electric power generation; ethanol for gasoline blending; and biomass-based diesel -- grows by 3.3% per year in the reference case. "This rapid growth reflects the EISA2007 [Energy Independence & Security Act 2007] renewable fuel standard and strong growth in the use of renewables for electricity generation that is spurred by renewable portfolio standards for electricity generators in many states," the report said. Additions of new coal-fired power plants are significantly reduced from earlier projections.
Efficiency policies and higher energy prices in AEO2009 slow the rise in U.S. energy use, which is projected to grow from 101.9 quadrillion Btu in 2007 to 113.3 quadrillion Btu in 2030. When combined with the increased use of renewables and a reduction in projected additions of new coal-fired conventional power plants, this slows the growth in energy-related greenhouse gas emissions. Energy-related carbon dioxide emissions grow at 0.3% per year from 2007 to 2030 in the new reference case, reaching a level of 6,410 million metric tons in 2030, as compared with 6,851 million metric tons in the AEO2008 reference case.
The reference case projections are available at www.eia.doe.gov/oiaf/aeo/index.html. The full AEO2009 report, including projections with differing assumptions on the price of oil, the rate of economic growth and the characteristics of new technologies, is to be released in early 2009, along with regional projections.
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