If the EIA's base case in its most recent projection of international energy demand and supply through 2035 is correct, then the USA is going to be burning for the next 25 years much more oil and coal than it should. To put it another way, the gas bridge to the future would be very long and narrow.
EIA projects that the US gas demand increases just 0.5% per year or 14.2% from 2008 to 2035. It has gas demand increasing from 23.2 trillion cubic feet per year to 26.5 trillion cubic feet. By contrast, global demand for gas increases the fastest of any fossil fuel at 1.6% per year.
If EIA is right that US gas demand increases by just 0.5% per year, the oceans of gas in the USA will only be modestly tapped by the time 2035 arrives. There will be miles and miles left to go on the bridge to the future.
The EIA projection coming true would also mean that the USA had not moved much transportation demand at all from foreign oil to domestic gas and that relatively little gas replaced coal-fired power plants.
The EIA long gas bridge to the future scenario would also mean more emissions for the next 25 years, more US economic risk to high world oil prices, and more national security risk than if the use of gas grows at rates much higher than 0.5%.
The EIA base case assumes no changes in policy. This result is what happens if the current rules and distortions of the market are not modified.
Don't put too much stock in these projections. They use the past to predict the future. I doubt we will ever exceed 100 million barrels of oil per day. The big fields are getting depleted and more and more of what is left is in source rocks or very tight formations.
ReplyDeleteGas has a very bright future and our energy policy should clearly be wind, solar, hydro and other renewables first, then as much gas as we can use for current uses and as a replacement for oil or coal, then nuclear, and as little oil and coal as possible.
Hard to believe these estimates, John. Even without US greenhouse gas regulations, announcements of significant coal to gas switching have already been made, and capital is being allocated, as you have documented here. Consensus projections are for 3 - 7 Bcf/d (2.6 Tcf)by 2014 alone. Especially if gas stays under $6, it seems that EIA's projections for gas will be blown away by 2020. The train has left the station
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