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 2030.¹ 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. Some possible policy changes—notably, the adoption of policies to limit or reduce greenhouse gas emissions—could change the reference case projections significantly.² EIA has examined many of the proposed greenhouse gas policies at the request of Congress; the reports are available on EIA’s web site.³ 

Trends in energy supply and demand are affected by many factors that are difficult to predict, such as 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 such as the higher energy prices experienced since about 2000, the greater influence of developing countries on worldwide energy requirements, recently enacted legislation and regulations in the United States, and changing public perceptions on issues related to the use of alternative fuels, emissions of air pollutants and greenhouse gases, and the acceptability of various energy technologies, among others. 

The AEO2008 reference case makes several important changes from earlier AEOs to better reflect trends that are expected to persist in the economy and energy markets. For example, the projection for U.S. economic growth, a key determinant of U.S. energy demand, has been lowered, reflecting an updated projection of productivity improvement. Key energy market changes identified by EIA analysts and reflected in AEO2008 include: 

• Higher prices for crude oil and natural gas 
• Higher 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 
• Higher domestic oil production, particularly in the near term 
• Slower projected growth in energy imports, both natural gas and liquid fuels  
• Slower projected growth in energy-related emissions of carbon dioxide (CO₂), which increase by 25 percent in the AEO2008 reference case from 2006 to 2030, as compared with a projected 35-percent increase over the same period in the AEO2007 reference case. 

Although the adjustments outlined above are important, their implications for some parts of the overall energy outlook are limited. For example, coal, liquid fuel (excluding biofuels included in liquids), and natural gas meet 83 percent of total U.S. primary energy supply requirements in 2030—down only slightly from an 85-percent share in 2006—despite higher energy prices, lower total energy demand, and increased use of renewable energy when compared with AEO2007. With the AEO2008 reference case assumptions, U.S. energy consumption will continue to be met predominantly by traditional fossil fuels.

Economic Growth 

The AEO2008 reference case reflects reduced expectations for economic growth. In the AEO2008 reference case, U.S. gross domestic product (GDP) grows at an average annual rate of 2.6 percent from 2006 to 2030—0.3 percentage points slower than the rate in the AEO2007 reference case over the same period. The main factor contributing to the slower rate of growth in GDP is a lower estimate of growth in labor productivity. Nonfarm business labor productivity grows by 2.1 percent per year in the AEO2008 reference case, compared with 2.3 percent per year in AEO2007. Nonfarm employment growth is 0.9 percent per year in the AEO2008 reference case, about the same as in AEO2007. From 2006 to 2030, total industrial shipments grow by 1.5 percent per year in the AEO2008 reference case, as compared with 2.1 percent per year in AEO2007.

Notes and Sources