The latest STEO predicts a .5% decrease in electricity consumption in 2009, leading to .7% lower coal consumption with its high carbon intensity. For oil, the STEO projects 2% lower demand, equivalent to ~400,000 barrels per day (b/d). And natural gas consumption is expected to decline by 1% in 2009, driven largely by lower industrial use. With the efficient deployment of renewables to take some market share from the fossil fuels above, greenhouse gas emissions from our country could fall as steeply as this past year’s ~2.5%.

This STEO marked the first month they predicted energy developments in 2010. They guesstimate economic recovery will return at a 2% pace and drive higher energy demand that lifts prices and emissions. It is up to all of us to shift our energy habits and push policies that deploy efficiency and renewables so that economic recovery is a win-win situation for consumers and the environment.

Oil Watch

Since the EIA’s non-OPEC oil supply projections have been highly optimistic over the last few years, I feel it’s important to go over their educated guesses. They revised down their estimate of 2008 non-OPEC oil production from a drop of 310,000 b/d to 340,000 as well as their projection for non-OPEC supply growth in 2009 from 410,000 b/d to 180,000 b/d. While these downward revisions do not have serious implications in today’s recessionary demand, they could be cause for concern within a few months. If the projections are as optimistically incorrect as last year, the EIA will have to revise its production totals down 1.2 million b/d to a fall of ~1 million b/d in 2009. The oil market could tighten up further in 2010 as the STEO predicts only 90,000 b/d production growth while oil demand picks up, giving OPEC more pricing power. I will watch how the situation develops and quickly report major info to you on this blog.

Bottom line: Energy prices and GHG emissions will remain lower than 2008 levels as the US economy shrinks. To keep these lower prices and emissions in 2010, we will need to continue progress in the rapid deployment of efficiency and renewable energy. The non-OPEC oil production situation could deteriorate on today’s low prices, so our energy security depends on us keeping fossil fuel demand growth at a minimum and preferably negative.

Onwards in the Sustainable Energy Transition-