It takes a fair amount of arrogance to predict anything that will happen two decades from now. That has not stopped that U.S. Energy Administration from issuing an early version of its 2012 Annual Energy Outlook that contains forecasts of the energy situation in 2035. The predictions come at the same time as a possible blockade of the Strait of Hormuz, Nigerian political unrest and debates over an oil pipeline from Canada to Texas.
The EIA forecasts, among other things, that:
Domestic crude oil production is expected to grow by more than 20 percent over the coming decade.
That prediction relies heavily on increased production from the Gulf of Mexico. The crude is certainly there, but political pressure from environmentalists may block some exploration and production. Logistical problems of drilling in very deep water also could compromise the forecast.
U.S. dependence on “imported petroleum liquids” will drop as:
… a result of growth in domestic oil production of over 1 million barrels per day by 2020.
The situation will get even better by 2035. Biofuel growth will aid the improvement. So will a moderation in energy use in the transportation sector. Also:
Net petroleum imports as a share of total U.S. liquid fuels consumed drop from 49 percent in 2010 to 38 percent in 2020 and 36 percent in 2035.
America has other energy benefits that will come in the mid-term future. These include a rise in natural gas production and an increase in the use of renewable fuels. These offsets to oil imports are important. The EIA says average crude oil prices will be $142 per barrel in 2035 as measured in 2010 dollars. That is very close to the price oil reached in the summer of 2008. It is amazing it will take so many years to get back there.
What use does the 2012 Annual Energy Outlook have? Many of its observations and predictions are based on dozens, if not hundreds, of events and supply and demand issues that cannot even be accurately gauged over the next two or three months. That renders the document’s contents useless.
Douglas A. McIntyre
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