Efficiency, Imports, and Emissions: The Shape of Things to Come
Every year, the Annual Energy Outlook from the U.S. Energy Information Administration tries to identify the big trends that are likely to shape the next 20 years in energy – and in this year’s edition, some key trends are different from those that shaped the last 20 years. For instance:
We keep getting more efficient. It’s not time to relax yet. U.S. consumers will continue to need more energy. But over the next 20 years, the EIA projects energy use both per person and per dollar of GDP will steadily go down. New regulations like higher fuel efficiency standards for vehicles have helped, but so has the overall shift to a service economy and the fact that older, less efficient power plants will be replaced. They all factor into the decline.
In fact, overall energy demand will grow by a pretty modest 0.3 percent per year, and the EIA doesn’t expect it to rise as fast as it did before the Great Recession. That’s partly because of wider social trends. For example, the EIA is on the pessimistic side in projecting economic growth, and thinks population growth will be modest. That’s important, because more people means more demand for energy, and so does a booming economy.
The U.S. situation is very different from the global picture, however, where demand is still projected to skyrocket in developing nations like China and India.
Domestic oil and natural gas production rises. In addition to increased offshore drilling, techniques like fracking have opened up “tight oil” and shale gas that was difficult to extract before, and if that trend continues, it will reverse a long-term decline in domestic oil and gas production. U.S. crude oil production has already risen by a half-million barrels per day since 2008. The EIA projects this could lead to the U.S. becoming a net exporter of natural gas by 2035, and that our dependence on imported oil could fall from 49 percent in 2010 to 36 percent by 2035.
But obviously, this depends on whether we embrace fracking and other new techniques or not – and there are serious environmental tradeoffs to be weighed on that score, and growing political controversy.
U.S. carbon emissions stay below 2005 levels until at least 2035. There are multiple reasons for this, some of which we planned as a nation, and some we didn’t. Our moves toward greater efficiency and greater use of natural gas (which produces less carbon emissions than coal or oil) are big factors here. Renewable energy is also projected to make significant strides.
Other factors include developments that no sane person would wish on the country, like the Great Recession itself and the long, slow recovery that’s projected. A booming economy would use more fossil fuels and pump out more greenhouse gases.
What’s more, the bad news is that holding carbon emissions below 2005 levels isn’t nearly enough to reverse climate change, particularly when developing nations are pumping out more and more greenhouse gases. We won’t be making the climate challenge worse, but we won’t be making substantial progress either.
And that’s one of the big takeaways of the Annual Energy Outlook. In many ways, it’s predicting some good news for the next 20 years: greater efficiency, less dependence on foreign oil, a defacto cap on carbon emissions. But energy projections are much like the Ghost of Christmas Future in A Christmas Carol. They show the shadows of what might be, not guarantees of what will be.
There are, in fact, no fewer than 29 alternate scenarios worked out in the energy outlook. Even on some of the big conclusions, like increased domestic oil and gas production, the EIA acknowledges the numbers can vary widely depending on how things play out.
All of which means that the country needs to stop relying on our energy default settings to save us. We need to start making some genuine plans and decisions to make sure that the energy future we get is actually the energy future we want.
