The US Energy Information Agency (EIA) released a preview of yet another exciting energy document yesterday, their Annual Energy Outlook (AEO) to 2030. This year’s AEO 2009 showed dramatic shifts from last year that can help us achieve carbon emissions reduction toward stabilizing our global climate. But it also shows we have more work to do.
The preview projects higher oil prices, slower growth in electricity demand, and lower carbon dioxide emissions.
Oil prices are predicted to rise to new records once the economic recovery picks up, reaching above $125 per barrel (inflation-adjusted 2007 dollars) as an annual average rather than a temporary spike like this summer. As I wrote yesterday, they predict US oil consumption will stay flat through 2030. And they also project US oil production will rise to a level close to the 1970 peak thanks to the higher prices incentivizing further exploration and development.
Peak oil theorists would laugh at this production assessment and remind EIA staff that US oil production has been falling on average ~2% per year. But next year’s high prospects for 5% growth in production due to three large new fields ramping up (Thunder Horse, Tahiti, and Atlantis) gives the EIA hope the trend of decrease could reverse. They also include a large increase in biofuels production, which is more believable to me than the production increases. It’s hard for me to imagine US oil production in 2030 at a higher level than today, but we will see how new discoveries are able to compete with rapid field depletion. The stagnant demand is good news to keep us from getting more dependent on foreign oil since many of our top sources of imports such as Mexico are in decline. But we may need to go further and reduce our demand since it would be precarious for us to rely on undiscovered oil to fulfill future needs.
The slower growth in electricity demand is another welcome development. Our electricity demand growth has been falling steadily since we had China-like 9% growth during the 1950s. Each decade showed a deceleration of growth: 7.3% in the 60s, 4.2% in the 70s, 3.1% in the 80s, 2.4% in the 90s, and 1.1% from 2000-07. The AEO predicts 1% annual growth through 2030. But the 5% fall in electricity consumption this past September leads me to believe that we can stop demand growth altogether through 2030 instead. Such an accomplishment would allow wind, solar and other low-carbon installations to replace old coal power plants in the years ahead and reduce our electricity generation costs. The EIA predicts renewables will add 57 GW to the grid by 2030. If we keep electricity demand constant, those 57 GWs can help decommission the dirtiest plants around our country — cleaning our water, our air, and mitigating climate change.
The AEO already predicts much slower growth in carbon dioxide emissions than last year, at a pace of only .3% per year. So deploying enough efficiency to keep electricity demand constant and increase renewables’ market share would allow emissions to fall even with economic growth in 2010+.
Bottom line: This year’s AEO shows progress on energy security and climate change through a more rapid deployment of energy efficiency and renewables over the next two decades. However, for us to be an international leader and stop global warming, we need to go further. Recent data of drops in demand for electricity and fuels show that we can keep such demand constant or even on a slowly decreasing trajectory. We just have to seize the opportunity in 2009 to launch an Energy Corps that helps Americans integrate cost-cutting efficiency into their homes and offices.
Onwards in the sustainable energy transition-
Tags: climate change, EIA, Electricity, energy, Oil, Solar, Wind