EIA Predictions to 2040: The US is not even close to an energy revolution

by / Monday, 10 December 2012 / Published in Smartgrid-CI Blog


In 2040, coal will remain the main source of energy in the USA and renewable will make little progress.

The EIA just released its Annual Energy Outlook for 2013 and the biggest surprise comes from its long term projection.

In 2040, Coal will still represent 35% of all American sources of energy, down from 40% today. Natural gas will represent to 30% vs. 25% in 2010 and renewable energies will account for 16% only of the US sources of energy in 2040, against 13% today. The most significant changes predicted by the EIA are in the energy sourcing. A bigger quantity of oil will be extracted domestically.

Thanks to the “advent of advent and continuing improvement of advanced crude oil production technologies”, in the next ten years in particular as oil producers will tackle the low hanging fruit in priority. As the same time, use of natural gas will continue to increase. Some of the consequences of the boost in natural gas are lower CO2 emission. The EIA predicts that the US gas emission will be 5% lower in 2040 that it was in 2005. Not bad but unfortunately not enough to significant contribute to a slowdown in global warming.  

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The EIA also predicts significant economic impact from this new energy mix. The US will not only benefit from a boom in energy export but also from a rebound in its manufacturing as the country lower cost of energy will attract new investments.

At the same time the EIA predicts that the country will be able to keep its crave for energy under control. The trend toward improvement in energy intensity that started in 2007 will continue. Despite a predicted population growth of 29% between now and 2040, energy consumption will grow 10% only. Energy consumption per capita will therefore decline 15%. Almost all business sectors will become more energy efficient. Transportation, residential and commercial should use about the same amount of energy in 2040 as they use today. All GDP gains will roughly be compensated by an equivalent gain in energy efficiency. The only exception will be the industrial sector that will need 28.4BTU in 2040 against 24BTU in 2011.

What to think about this report? The energy landscape is changing in the US but very slowly, in particular compared to the revolution other nations are going through. Denmark expects to rely 100% on renewable energy by 2050. The UK is targeting 50% in 2035. Renewable energy already represents 20% of the German energy mix and the country is targeting 80% by 2050. Even a major oil power such Saudi Arabia has set ambitious renewable goals for itself and plans to install no less than 41GW solar capacity by 2032.

No doubt cheap shale gas along with access to more affordable tight oil is an impediment to the emergence of renewable energy in the US. Issue is that this report seems disconnected with global reality. Other countries that are moving fast in the direction of renewable energy will be in a much position to take advantage of the unavoidable technological breakthroughs that will emerge from clean energy sources. The US are doing very well in the current energy paradigm but look incredibly unprepared to face the paradigm shift that will happen way before 2040. 

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