U.S. ENERGY INFORMATION ADMINISTRATION
WASHINGTON DC 20585
FOR IMMEDIATE RELEASE
November 14, 2001
New EIA Forecasts Include Higher Energy Demand and Higher Nuclear
Generation in 2020 Compared to Last Year's Projections
U.S. energy demand is expected to grow by nearly one-third between 2000 and 2020, according to the Energy Information Administration (EIA) which today released the reference case forecast of its Annual Energy Outlook 2002 (AEO2002). Demand is projected to increase from 99 quadrillion Btu in 2000 to 131 quadrillion Btu in 2020, 4 quadrillion Btu higher than projected by EIA last year. The forecast includes nuclear generation declining at a slower rate compared to last year's projections, partly due to lower assumed costs for maintaining operation of existing plants.
Although the U.S. economy is currently experiencing a slowdown, the economy is expected to recover by mid-2002 and increase at an average annual rate of 3.0 percent through 2020, very similar to last year's forecast. However, energy demand is expected to be higher than in last year's forecast in both the commercial and transportation sectors (Figure 1). Commercial floorspace is projected to grow at an average annual rate of 1.7 percent between 2000 and 2020, compared to the rate of 1.2 percent projected last year, consistent with recent historical trends. More rapid floorspace growth boosts energy demand by more than 2 quadrillion Btu in 2020 over last year's forecast. In the transportation sector, higher projected growth in personal travel, combined with slower growth in efficiency for many travel modes, raises energy demand by more than 1 quadrillion Btu in 2020 compared to last year's forecast.
In AEO2002, nuclear generating capacity is projected to decline from 2000 to 2020, but is higher than projected last year, as the result of a reevaluation of the costs of maintaining aging nuclear plants and higher natural gas prices. Of the 98 gigawatts of nuclear capacity available in 2000, 10 gigawatts are projected to retire by 2020, compared to 26 gigawatts of retirements in last year's forecast, raising nuclear generation in 2020 by 22 percent over last year's forecast (Figure 2). Nuclear plant retirements are based upon the costs of maintaining operation compared with the cost of building new capacity, which is largely fired by natural gas. However, no new nuclear plants are projected to be built by 2020.
World oil prices remained high in the early part of 2001 but have declined recently, partly because of the slowing economy. The projected world oil price reaches $24.68 per barrel (2000 dollars) in 2020, higher than the $22.92 per barrel projected last year, as a result of higher expected world oil demand (Figure 3). Projected natural gas prices reached record levels in 2001, due to tight supplies and a cold winter, but are expected to decline sharply in 2002. The average wellhead price of natural gas is expected to reach $3.26 per thousand cubic feet in 2020. This price is slightly higher than last year's projection, even though natural gas demand is lower by 1.0 trillion cubic feet in 2020, because of a less optimistic assessment of the natural gas reserves discovered as the result of exploratory drilling.
Other forecast highlights include:
- Average electricity prices are projected to generally decline from 6.9 to 6.3 cents per kilowatthour between 2000 and 2015 because of increasing competition in the electricity industry and coal prices which decline due to improved mining productivity and growing production from lower-cost Western mines. Projected electricity prices increase to 6.5 cents per kilowatthour by 2020 as a result of rising natural gas prices. The projections reflect the delay in plans for industry restructuring that have been recently announced by several States, including the termination of retail competition in California in 2002.
- Coal remains the primary fuel for electricity generation, although its share is projected to decline from 52 percent in 2000 to 46 percent by 2020 as the increasingly competitive electricity industry invests in less capital-intensive natural gas technologies. Compared to last year's forecast, generation from coal, nuclear, and renewable sources is higher in 2020 and natural gas generation is lower, due in part to higher natural gas prices to electricity generators. Total generation is expected to be higher, compared to last year's projection, due to higher electricity demand.
- Total natural gas demand is projected to increase nearly 50 percent by 2020, largely for electricity generation. Most (87 percent) of the generation capacity, including cogenerators, built over the next two decades is expected to be natural gas-fired capacity.
- Domestic crude oil production is projected to decline slightly by 2020, reaching 5.6 million barrels per day, compared to 5.1 million barrels per day projected last year, resulting from the expectation of additional new fields in the National Petroleum Reserve-Alaska, which begins production in 2010. Net petroleum imports are projected to provide 62 percent of U.S. demand in 2020, up from 53 percent in 2000, but lower than the 64-percent share projected last year because of the higher domestic production.
- U.S. carbon dioxide emissions from fuel combustion are projected to reach 2,088 million metric tons carbon equivalent in 2020, 54 percent higher than the level of 1,352 million metric tons carbon equivalent in 1990 (Figure 4). Carbon dioxide emissions in 2020 are expected to be 2 percent higher than in last year's projection, due to higher energy demand, particularly for transportation, and higher coal-fired electricity generation. However, the carbon intensity of the economy, measured as carbon dioxide emissions per dollar of gross domestic product, declines at an average annual rate of 1.5 percent through 2020.
Reference case projections from the Annual Energy Outlook 2002 and an overview of the results can be accessed on EIA's Internet site at www.eia.gov/oiaf/aeo/index.html. The full report, including projections with differing assumptions on the price of oil, the rate of economic growth, and the characteristics of new technologies, will be released on December 21, 2001, along with regional projections and a report on the major assumptions underlying the projections.
|The analysis described in this press release was prepared by the Energy Information Administration, the independent statistical and analytical agency within the U.S. Department of Energy. The information contained in the report and the press release should be attributed to the Energy Information Administration and should not be construed as advocating or reflecting any policy position of the Department of Energy or any other organization.
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