Cheers! I would like to take a moment to wish everyone a safe, fun and positive 2014. This will be the last post of the year. I am taking a break to learn how to ski. I will be back in January to provide you with more smart grid related news. I am predicting a busy year.
Each year the U.S. Energy Information Administration (EIA) publishes its Annual Energy Outlook (“AOE”). The complete AOE2014 will not be available until the Spring. However, EIS has given us a sneak peak by providing an abbreviated early release. In the early release, EIA tells us the report focuses on the factors that shape U.S. energy markets through 2040, under the assumption that current laws and regulations remain generally unchanged throughout the projection period. What? We all know that won’t happen. I guess that is why each year there is a new AOE. Even in light of regulatory uncertainty the report has strategic and practical value. Just don’t take it to Vegas. All joking aside, here are some highlights:
- Improved efficiency of energy use in the residential and transportation sectors and a shift away from carbon-intensive fuels for electricity generation keep U.S. energy-related carbon dioxide emissions below their 2005 level through 2040. Projected emissions in 2040 are 7% below the 2005 level.
- Growing domestic production of natural gas and crude oil continues to reshape the U.S. energy economy, with crude oil production approaching the historical high achieved in 1970 of 9.6 million barrels per day.
- Natural gas production grows steadily, with a 56% increase between 2012 and 2040, when production reaches 37.6 trillion cubic feet (Tcf). The full AEO2014 will include cases that represent alternative oil and natural gas resource and technology assumptions.
- Reliance on natural gas-fired generation remains strong, as a result of additional near-term retirements of coal-fired and nuclear capacity, and natural gas prices continue to influence electricity prices.
- In the long term, both natural gas prices and electricity prices rise. Electricity prices in 2030 are 10.4 cents/kWh (2012 dollars), up from 9.9 cents/kWh projected in the AEO2013.
- Natural gas overtakes coal to provide the largest share of U.S. electric power generation. Projected low prices for natural gas make it a very attractive fuel for new generating capacity. In 2040, natural gas accounts for 35% of total electricity generation, while coal accounts for 32%.
I see this outlook as generally providing good news, leaving me optimistic about our energy future. If you want more information, the EIA website has helpful charts and tables, allowing you to access data by fuel source and other details.
Enjoy what remains of 2013. I hope you take some time to learn something new and remember — the most important things in life are not things.