U.S. Energy Supply And Demand

Domestic production of oil, natural gas, and renewable energy in 2035 will exceed today’s levels, but coal use for electricity generation will decline, according to a study released last week by the Energy Information Administration (EIA), which is part of the Department of Energy.

Although coal’s share of electricity generation will drop from nearly 50% today to 39% in 2035, coal-fired power plants will remain the nation’s primary source of electricity, says Howard K. Gruenspecht, acting administrator of EIA.

Coal’s decline, the report says, will be due to a combination of slower growth in demand for electricity, continued competition from natural gas and renewable energy, and the need to comply with environmental regulations. By 2035, natural gas’s share of electricity generation will grow from 24% to 27% and renewable energy’s share will increase from 10% to 16%. The report assumes that tax incentives for wind and solar energy production will expire. If they are extended, the report notes, the renewables’ share will grow.

U.S. production of natural gas will exceed consumption early in the next decade, and the U.S. will begin exporting liquefied natural gas by 2016, the report predicts.

Domestic production of crude oil will grow by more than 20% over the next decade. Growth will come from drilling in the Gulf of Mexico and extraction from shale formations. The production boost, coupled with increased vehicle efficiency, means that the share of petroleum imports in U.S. fuel consumption will drop from 49% in 2010 to 38% in 2020 and 36% in 2035.

The predicted growth in production of fossil fuels and renewables will translate to a mixed bag for carbon dioxide emissions: Energy-related CO₂ emissions will remain below 2005 levels through 2035, EIA predicts, even though emissions will grow by 3% between 2010 and 2035.

The EIA report provides a reference point and is based on today’s regulations, policies, and conditions.