A Look at Our Energy Outlook

Steady as we go with energy but definitely not on our climate target.

Presidential Disconnect?

A little more than two years ago in Copenhagen President Obama committed the United States (in a non-binding pledge) to work with the international community to prevent global temperatures from rising more than 2 degrees Celsius (3.5 degrees Fahrenheit) above preindustrial levels, which our best guess translates into keeping carbon dioxide (CO2) concentrations below 450 parts per million. In that effort, he pledged that the United States would reduce its greenhouse gas emissions, relative to 2005, by 17 percent by 2020 and 42 percent 2030.

Last month, in his State of the Union speech, the president espoused, to a hearty round of applause, an “all-out, all-of-the-above strategy that develops every available source of American energy.”

Here’s the problem: An “all-out, all-of-the-above” approach that aggressively seeks to exploit fossil fuel resources, as well as renewable energy, is inconsistent with the U.S. commitment the president made in Copenhagen.

No Emissions Decrease in U.S. Energy Outlook

Every year the U.S. Energy Information Administration (EIA) publishes a report on energy-related projections for the coming decades, such as how much energy we will use, how we will produce or obtain that energy, etc.

Two weeks ago an early-release version of its 2012 outlook was published, projecting energy trends out to 2035. And as with President Obama’s speech, there’s a lot of upbeat news.

EIA: Oil Production Up, Imports Down

Before looking ahead, EIA looks back. And it turns out that in 2010, for
the first time since 1997, the United States imported less than 50
percent of the liquid fuel it consumed.

How did this this happen? Three primary forces: the government’s mandate to replace fossil fuels with an increasing percentage of biofuels, a drop in demand stemming from the economic downturn beginning in 2008, and an increase in U.S. crude oil production (in response to rising petroleum prices), reversing a decline that began in 1986.

And what about future trends? EIA projects that total imports of liquid fuels will decline from about 49 percent of total consumption today to only 36 percent by 2035. That’s quite a rosy picture, if you’re concerned about oil imports (and who isn’t).

But if you’re also concerned about climate, the picture’s a little less rosy. The decrease in net imports will be accomplished more by ramping up domestic oil production (part of that all-out, all-of-the-above strategy) than by tamping down on consumption. Overall consumption of liquid fuels is projected to rise modestly [xls] from today’s roughly 19 million barrels per day to about 20 million barrels per day in 2035. But don’t forget, the more we use, the more oil will likely cost. If the EIA’s projected rise in consumption comes to pass, also projected is an accompanying rise in oil prices: from about $95 per barrel to about $145 per barrel (with a range of $60-$200) over the interval (all in 2010 dollars).

Change in Fuel Mix for Electricity an Upside

On the electricity front, the EIA projects a change in the mix of generating sources that will probably move us in the right direction in terms of greenhouse gas emissions.

Compared to 2010, coal’s share of the pie will decrease from 45 percent to 39 percent in 2035, while the share from natural gas (which is preferable to coal from a climate-warming point of view, provided gas leakage is curtailed) is expected to rise from 24 to 27 percent with the renewable slice to go from 10 to 16 percent.

But working against this change in fuel mix is a rather large increase in total electricity generation — from 3,879 billion kilowatt-hours in 2010 to 4,775 billion kilowatt-hours in 2035. As a result, while coal’s share of the fuel mix decreases by 6 percent, its contribution in absolute numbers actually increases by a small amount by 2035. Pretty good news for the coal industry but not for the climate.

CO2 Emissions Trending Downward?

EIA’s section on U.S. CO2 emissions comes with an upbeat subhead [pdf]:

“Total U.S. energy-related carbon dioxide emissions remain below their 2005 level through 2035.”

That’s right, the EIA analysts project that U.S. CO2 emissions from energy generation will essentially stay flat over the next two decades and beyond. This is a big deal. U.S. CO2 emissions have been on an almost non-stop upward climb for more than 100 years, with two short periods of decline: from about1928–1933 during the Great Depression and then from roughly 1976–1978 as a result of the oil crisis. The EIA projections over thee decades have U.S. CO2 emissions going from about 6 billion metric tons in 2005 to about 5.8 billion metric tons in 2035. That’s an emissions decrease of about 3 percent. Hurray for us, right?

Flat Don’t Cut It

Folks, I hate to be the wet blanket here, but a 3 percent decrease by 2035 doesn’t quite cut it if you’ve pledged to the world that we will decrease our greenhouse gas emissions by 17 percent by 2020 and 42 percent by 2030.

But it doesn’t have to be that way. The EIA’s projections, which are based on the policies in place when the projections are made, come with the standard “assumption that current laws and regulations remain generally unchanged throughout the projection period.” Fuel-economy standards covering vehicle model years 2017 through 2025, which have been proposed by the administration and are opposed by some members of Congress, are not included. In principle U.S. policies can be changed to meet our climate targets.

Which Brings Us Back to the State of the Union Speech

You may recall that climate change, while not a major topic in Obama’s address, was mentioned once — when the president stated that significant action on climate change was not possible given the current make-up of Congress. He used that stalemate to exhort the members of Congress to get behind a bipartisan push to enhance clean-energy production. But Obama must know that a business-as-usual policy that provides modest federal assistance for clean energy with an all-out, all-of-the-above strategy for energy production just won’t cut it when it comes to climate change. If he’s not sure, all he has to do is read his own administration’s energy outlook.