December 15, 2009

Events from Around Town: EIA’s Updated Energy Forecasts to 2035

Yesterday morning I took the Red Line up to the Johns Hopkins School of Advanced International Studies to attend a presentation by the head of the Energy Information Administration (EIA), Dr. Richard Newell. The event, “EIA’s Updated Energy Forecasts to 2035,” projected America’s energy profile for the next 25 years. This presentation was a preview of the EIA’s full projection, which should be unveiled in the next few months.

Dr. Newell first laid out the assumptions made by EIA researchers, which are mainly too complex to render here. However, one important example is that the EIA assumes that current laws and regulations will stay the same and that there will be no significant breakthroughs in energy technologies (alternative energy vehicles, or otherwise). With these assumptions in mind, here are some of the highlights from the projection:

  • By 2035, crude oil will be trading at about $224/barrel (nominal 2035 dollars; this is projected to be about $135 in 2008 dollars).
  • The ratio of oil to natural gas prices will be high, and oil will be about three times as expensive as gas.
  • Non-fossil fuel energy use will rise, but in 2035, 78% of U.S. energy use will still rely on fossil fuels.
  • Coal use will rise by 12%, mostly for electricity generation. Natural gas use will rise by 7%, and nuclear power use will rise by 11%.
  • Energy efficiency will cause energy use to drop, but structural shifts will be even more significant (e.g., a continued shift in the United States away from a manufacturing-based economy and towards a service-based economy).
  • Ethanol will be a significant biofuel, and its use in the United States will triple by 2035. However, liquid biofuels will not account for a significant portion of total energy consumed in the United States.

All of this may be disheartening for anybody hoping for more renewable energy use in the near-to-mid-term. Still, the EIA predicts that in 2035 that a greater portion of electricity will be produced from domestic sources of natural gas, resulting in a modicum of increased energy security. Also, biofuels and renewable energy production will be growing at steady rates, which could help eventually wean the country off petroleum dependence (but not likely by 2035).

Dr. Newell noted that interested energy-heads can poke around the EIA’s website to check previous projections against the actual energy numbers that were consumed. He also noted—when asked directly—that the EIA has historically fared better in predicting quantities of energy consumed than it has in predicting prices of individual energy sources. It will be interesting to check the site in 2036 to see how well this projection predicted the future.