In a context of declining or only slowly rising energy prices, strong economic growth and expanding energy demand are projected to raise total U.S. energy consumption to 131 quadrillion British thermal units (Btu) in 2020, up about 32 percent from the 2000 level of 99 quadrillion Btu, according to the reference-case forecast in the Energy Information Administration's Annual Energy Outlook 2002.

Despite an expected decline in energy intensity (energy use per dollar of gross domestic product) of 1.5 percent per year through 2020, energy demand is projected to rise in all economic sectors. The highest rate of growth is in the transportation sector, expected to grow at an average annual rate of 1.9 percent to 40 quadrillion Btu in 2020. Next is commercial energy consumption (up 1.7 percent per year to 23 quadrillion Btu), then industrial consumption (up 1.1 percent per year to 44 quadrillion Btu), and finally residential consumption (up 1 percent per year to 24 quadrillion Btu). Energy use per capita is also projected to rise slightly.

Other projected reference-case energy trends are as follows:

Electricity
Electricity demand is expected to rise 1.8 percent per year through 2020, driven in part by growth in computers, office equipment, and appliances. Electricity generation from coal, natural gas, and renewable energy sources increases to meet the rising demand, although some fossil fuel-fired and nuclear generating plants will be retired.

As increasing competition in the electric power sector encourages higher efficiencies and less capital-intensive investment, natural gas is projected to expand its share of total generation from 16 percent in 2000 to 32 percent in 2020, while the share of coal is expected to decline from 52 percent to 46 percent. Nuclear generating capacity also declines; of the 98 gigawatts available in 2000, 10 gigawatts are expected to be retired for economic reasons by 2020. No new plants are expected. Renewable energy generation, confronted with cheaper fossil-fired generation, grows only 1.3 percent annually.

U.S. Energy Consumption by Fuel, 1970-2020 (Quadrillion Btu)

Source: Energy Information Administration.

Petroleum
Petroleum demand is expected to grow 1.5 percent per year through the forecast period (see figure), led by growth in the transportation sector. Although crude oil production declines 0.2 percent per year, output from additional oil fields in Alaska and increases in natural gas plant liquids production boosts total domestic petroleum supplies. Nevertheless, rising demand will necessitate higher net imports, which are projected to reach 62 percent of total consumption in 2020.

Natural gas
Driven mainly by greater use for electricity generation, consumption of natural gas is expected to grow 2 percent annually and reach 34 trillion cubic feet in 2020. Production grows at the same rate, and net imports increase nearly 60 percent. Net imports of liquefied natural gas are also projected to rise.

Coal
Growing electricity output helps boost projected demand for coal by 26 percent to 1,365 million short tons in 2020, a growth rate of 1.2 percent yearly. Production rises to 1,397 million short tons and exports decline slightly.

Renewable energy
As noted, renewable electricity generation grows slowly through 2020, but total renewable production -- including industrial biomass, ethanol, and all electricity sources -- increases more than one-third to 8.9 quadrillion Btu.

Carbon dioxide emissions
Rising energy demand, retiring nuclear capacity, and slow renewables growth contribute to an increase in energy-related emissions of carbon dioxide of about one-third, from 1,562 million metric tons carbon equivalent in 2000 to 2,088 million metric tons in 2020.

Annual Energy Outlook 2002, Early Release, is available only on the EIA website, with the full report in hard copy expected to be available in late December.

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File last modified: November 26, 2001