Energy Trends to 2030 

In preparing projections for the Annual Energy Outlook 2008 (AEO2008), the Energy Information Administration (EIA) evaluated a wide range of trends and issues that could have major implications for U.S. energy markets between today and 2030. This overview focuses on one case, the reference case, which is presented and compared with the Annual Energy Outlook 2007 (AEO2007) reference case (see Table 1). Readers are encouraged to review the full range of alternative cases included in other sections of AEO2008.

As in previous editions of the Annual Energy Outlook (AEO), the reference case assumes that current policies affecting the energy sector remain unchanged throughout the projection period. The reference case provides a clear basis against which alternative cases and policies can be compared. Although current laws and regulations may change over the next 25 years, and new ones may be created, it is not possible to predict what they will be or how they will be implemented [1].

EIA published an “early release” version of the AEO2008 reference case in December 2007. Later that month, the Energy Independence and Security Act of 2007 (EISA2007) was enacted. The provisions in EISA2007 will have a major impact on energy markets, particularly liquid fuels. Given the year-long life of AEO2008 and its use as a baseline for analyses of proposed policy changes, EIA decided to update the reference case to reflect the provisions of EISA2007. A short summary of the impact of including EISA2007 is provided.

Trends in energy supply and demand are affected by many factors that are difficult to predict, including energy prices, U.S. and worldwide economic growth, advances in technologies, and future public policy decisions both in the United States and in other countries. As noted in AEO2007, energy markets are changing in response to readily observable factors, which include, among others: higher energy prices; the growing influence of developing countries on worldwide energy requirements; recently enacted legislation and regulations in the United States; changing public perceptions on issues related to emissions of air pollutants and greenhouse gases and the use of alternative fuels and; and the economic viability of various energy technologies.

Projections in the AEO2008 reference case have been updated to better reflect trends that are expected to persist in the economy and in energy markets. For example, the projection for U.S. economic growth, a key determinant of U.S. energy demand, is lower in AEO2008 than it was in AEO2007, reflecting an updated assumption for productivity improvement. Other key changes in the AEO2008 projections include:

• Higher price projections for crude oil and natural gas
• Higher projections for delivered energy prices, reflecting both higher wellhead and minemouth prices and higher costs to transport, distribute, and refine fuels per unit supplied
• Slower projected growth in energy demand (particularly for natural gas but also for liquid fuels and coal)
• Faster projected growth in the use of nonhydroelectric renewable energy, resulting from a revised representation of State renewable portfolio standard (RPS) provisions
• Higher projections for domestic oil production, particularly in the near term
• Slower projected growth in energy imports, both natural gas and oil
• Slower projected growth in energy-related emissions of carbon dioxide (CO2).

Coal, liquid fuels (excluding the biofuels portion of to-tal liquids supply), and natural gas meet 80 percent of total U.S. primary energy supply requirements in 2030—down from an 85-percent share in 2006, reflecting the incorporation of EISA2007 provisions, slower economic growth, higher energy prices, lower total energy demand, and increased use of renewable energy when compared with AEO2007.

Notes and Sources