EIA’s Annual Energy Outlook 2012 Predicts Increased Domestic Energy Security

By Andrew Shaw

Today, the Energy Information Administration (EIA) released its Annual Energy Outlook 2012, which provides projections on U.S. energy consumption, production and use through 2035.  EIA’s report is another sign that the U.S., through a variety of factors, is moving toward greater energy security.

EIA’s report estimates that U.S. petroleum imports will continue to decline over the coming years. Under EIA’s reference case, petroleum imports will fall from 49% of total domestic consumption in 2010 to 36% in 2035. As the report notes, this decrease does not take into account the Obama Administration’s proposed fuel economy standards for model year 2017-2015 light duty vehicles, which would raise fuel efficiency standards to nearly 55 miles per gallon. The implementation of these fuel efficiency standards could further decrease domestic consumption of crude oil, which could in turn have positive impacts on U.S. petroleum imports.

There is much discussion these days regarding an “all of the above” energy strategy. The EIA report, however, emphasizes the importance of such a strategy. For example, the report concludes that reduced U.S. petroleum imports is due to a variety of factors, including: increased domestic crude oil production; decreased energy consumption stemming from stronger fuel efficiency standards; and increased production of biofuels.

EIA’s report also predicts increased production and usage of natural gas through 2035. Under the reference case, shale gas production will constitute 49% of total domestic natural gas production by 2035, up from 23% in 2010. In the power sector, natural gas’ market share is projected to increase from 24% in 2010 to 28% in 2035.

EIA will highlight its Annual Energy Outlook 2012 at an event on Wednesday sponsored by the Bipartisan Policy Center.