U.S. Energy Demand Hinges on Development of Technology

Energy demand in the United States will increase 32 percent by 2020, according to the latest energy forecast from the federal government.

WASHINGTON, DC – Total demand will reach 127 quadrillion Btu if there are no changes in laws or regulations, but economic growth and the penetration of energy-efficient and renewable energy sources will have an impact on this demand, according to the Energy Information Administration (EIA) in its “Annual Energy Outlook 2001” that was released late last month. “Economic growth is a major determinant of both energy demand and carbon dioxide emissions,” it explains, and the reference case assumes that U.S. gross domestic product will grow at an average annual rate of 3.0 percent from 1999 until 2020. If the economy grows at 3.5 percent, the demand for energy by 2020 will be 7 percent higher than the base forecast, and carbon dioxide emissions will increase by 152 million metric tonne of carbon equivalent (mmt-ce) in 2020. If the U.S. economy grows at 2.5 percent per year, energy demand will be 6 percent lower than the reference case, and carbon dioxide emissions would be reduced by 125 mmt-ce. Efficient energy-using technologies are expected to become available and penetrate the U.S. market over the next 20 years, although a “high technology” case means that more rapid improvement in the cost and efficiencies of advanced technologies will lower energy demand by 6 percent and carbon emissions by 166 mmt-ce in 2020, while a slow development of technology will increase energy demand by 5 percent and result in carbon emissions of 116 mmt-ce in 2020, says the report. The base projections reflect the legislation in eight States to limit the use of the gasoline additive methyl tertiary butyl ether (MTBE), and assumes technology improvements in oil and natural gas production that lower costs and improve finding and success rates. Natural gas prices in 2020 are expected to reach $2.62 per thousand cubic feet, but could reach $4.53 if development is low. EIA is the independent statistical agency within the U.S. Department of Energy.