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US Energy Demand to Grow 1.5 Pct Annually

Date: 19-Dec-03
Country: USA
Author: Tom Doggett

Oil demand was revised lower because of expected increases in federal vehicle gasoline mileage requirements, and higher natural gas prices will push down gas demand, according to the U.S. Energy Information Administration's long-term forecast.

Nonetheless total U.S. energy use will increase more rapidly than domestic energy production and more imports - particularly oil - will be needed to meet a growing share of energy demand, EIA said.

The Energy Department's analytical arm said U.S. crude oil production will increase from 5.6 million barrels per day (bpd) last year to a peak of 6.1 million bpd in 2008 and gradually decline to 4.6 million bpd in 2025.

At the same time, domestic oil demand will jump from the current 20 million bpd to 28.3 million bpd in 2025.

As a result, petroleum imports - including both crude oil and refined oil products like gasoline - will account for 70 percent of demand, up from 54 percent last year.

Separately, U.S. natural gas demand is forecast to grow 1.4 percent a year from 22.8 trillion cubic feet (Tcf) in 2002 to 31.4 Tcf in 2025, primarily because of more power plants being built that use gas as a fuel for generating electricity, EIA said.

However, domestic gas production is not expected to grow as fast and imports of liquefied natural gas (LNG) will have to close the widening gap between supply and demand.

Tighter supplies of natural gas mean U.S. production will be 23.79 Tcf in 2020 - significantly lower than the 25.1 Tcf that the EIA forecast one year ago for 2020. The change is due to declining production from existing gas wells and new fields that are typically smaller than the large, older fields already tapped.

LNG imports are forecast to increase to 4.8 Tcf in 2025, double the EIA's estimate last year in its long-term energy outlook. The increase would mean LNG would account for 15 percent of total U.S. gas demand in 2025.

LNG is natural gas super-cooled for transportation aboard special tankers. The manufacturing process cools the gas to minus-259 degrees Fahrenheit, changing the gas into liquid and shrinking it to less than 1/600 of its original volume.

Other highlights of the EIA's energy forecast between 2002 and 2025 include:
* Average world oil price, reflecting inflation, rises from $27 a barrel to $52.

* Coal remains the primary fuel for power plants, accounting for 52 percent of electric generation in 2025 from the current 50 percent.

* Electricity generated by renewable sources like solar and wind increases 1.9 percent a year to 518 billion kilowatt-hours.

* No new nuclear power plants expected to be built, but current plants increase their generating capacity.

* Carbon dioxide emissions increase 1.5 percent a year from 5,729 million metric tons to 8,142 million metric tons.

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