The U.S. Department of Energy's Energy Information Administration has once
again reduced its coal demand forecasts for 2025 and 2035.
The U.S.
coal consumption forecast for 2025 is 20 quadrillion British thermal units, or
quads, in the reference case in the EIA's Annual Energy Outlook 2012, released
June 25. That's down almost 3 percent from the forecast in January's early look
at the reference case — and down more than 10 percent from the AEO2011 2025
projection of 22.6 quads.
Coal consumption for 2035 is forecast at 21.15 quads,
down from the January projection of 21.6 quads and down 13 percent from last
year's 2035 projection of 24.3 quads.
The Annual Energy Outlook is the DOE's most
comprehensive forecast of U.S.
energy production, consumption and market trends. The AEO2012 forecasts
activity through 2035. Its reference case takes into account policies that are
in place; the outlook also includes 29 alternative cases.
Key results in AEO2012, according to a summary, are
modest growth in demand; increasing oil and gas production, with less oil
imported and more gas exported; and higher reliance on gas and renewables for
electricity generation.
Coal
The EIA sees total U.S.
coal production declining through 2015, then rebounding as electricity demand
grows and natural gas prices rise. Exports increase over time and the use of
coal for synthetic liquids contributes to demand growth.
But while both Western and Interior coal production
grow, Appalachian coal production, after falling through 2020, is nearly
stagnant.
"Appalachian coal production declines
substantially from current levels as coal produced from the extensively mined,
higher cost reserves of Central Appalachia is supplanted
by lower cost coal from other supply regions," the outlook reads. "An
expected increase in production from the northern part of the Appalachia
basin, however, moderates the overall production decline in Appalachia."
The price of Appalachian coal is already well above
the U.S.
average, and that price spread grows. Some of the higher price for Appalachian
coal reflects declines in coal mine productivity and some of it an expected
shift toward higher-value coking coal.
Gas
Shale gas production increases from about a quarter of
U.S. dry gas production
in 2010 to about half in 2035.
The nation becomes a net exporter of natural gas early
in the next decade. Even so, prices in the reference case remain relatively low
even in 2035, at under $8 per million Btu in 2010 dollars.
AEO2012 details the EIA's current estimate of the
remaining technically recoverable Marcellus gas resource of 140.5 trillion
cubic feet, using the same assumptions that led to last year's United States
Geological Survey estimate of 84 tcf but with more current production data.
Technically recoverable resource, or TRR, includes
proved reserves — volumes expected to be produced under existing
conditions — and unproven resource that it is believed existing
technology could extract.
West Virginia's
TRR is estimated at 8.9 tcf.
Electricity
Gas and renewables provide an increasing share of
electricity, crowding coal down to 38 percent of generation by 2035.
The EIA forecasts in its reference case 49 gigawatts
of coal-fired power plant capacity retirements through 2035, almost all of that
in the next five years. Alternative cases see a range spanning 34 gigawatts
retiring, or up to 70 gigawatts in a very low natural gas price regime. The
establishment of a significant policy reducing greenhouse gas emissions would
see more than 70 gigawatts retired.
About 11 gigawatts of new coal capacity comes online,
9.3 gigawatts of which is already under construction.
Oil
With rising domestic oil production, greater use of
domestically produced biofuels, and slower growth in demand due to recently
tightened fuel economy standards, the net import share of consumption of liquid
transportation fuels drops from its peak of 60 percent in 2005 and 2006 to 36
percent in 2035.
Liquids consumption does not again reach its 2005 peak
through the forecast period.
In the reference case, the world price of oil climbs
to near $150/barrel in 2010 dollars.
Take note with regard to recent excitement about U.S.
resurgence as an oil producer: At its most optimistic in a range of alternative
cases that vary the resource, the technology and world oil price, the EIA
forecasts U.S. oil production peaking in about 2020; at its least optimistic,
U.S. production peaks in about 2015.
CO2 emissions
Expected slow economic and population growth combined
with increasing energy efficiency and increased use of natural gas and
renewables leaves energy-related carbon dioxide emissions below their 2005
level through the forecast period: 5,758 million metric tons in 2035, about 4
percent below the 2005 level of 5,996 million metric tons.
Overall, fossil fuels decline from 83 percent of U.S.
energy consumption in 2010 to about 77 percent in 2035.
The AEO2012 may be downloaded from the Energy Information Administration's website.
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