The U.S. Energy Information Administration just released its Annual Energy Outlook 2012 report, and three things stick out: The United States is dramatically curbing its oil imports, carbon emissions are flatlining and we have less shale gas than once thought. Here’s a rundown:
1) The United States is reducing its dependence on foreign oil. According to EIA forecasts (which, do note, are far from perfect), Americans will likely continue restraining their gasoline consumption, thanks, in part, to the Obama administration’s new fuel-economy standards for cars and lights trucks. Meanwhile, oil and gas production in places such as North Dakota has been booming, thanks to higher prices and new drilling technology. Put those together, the EIA calculates, and the United States is set to import just 36 percent of its petroleum by 2035, down from 60 percent in 2005.
2) U.S. global-warming pollution is flat-lining. Carbon-dioxide emissions plummeted after the financial crisis in 2008, and the EIA expects that greenhouse-gas pollution from the energy sector won’t recover back to 2005 levels anytime soon, as the chart below shows. The reasons? New vehicle fuel-economy standards; cheap natural gas that’s displacing dirtier coal-fired places; state-level laws that mandate renewable energy; and new environmental regulations on power plants from the EPA.
Granted, U.S. emissions aren’t on pace to decline — remember, at the Copenhagen climate talks, the White House pledged to reduce U.S. carbon emissions 17 percent from 2005 levels by 2020, and the EIA doesn’t think we’re anywhere near on pace to do that (Congress would most likely need to step in with new climate policies). Still, after decades of greenhouse-gas increases, there does seem to be a break from historical trends, assuming the EIA forecast holds up:
3) We have less shale gas than once thought. Remember all those old predictions about how the United States had a 100-year supply of natural gas, thanks to new fracking technology that can extract energy from shale rock? Lately, those first-draft euphoric estimates have been facing downward revisions, and now even the EIA report is climbing aboard the sobriety wagon.
Back in 2011, the EIA estimated that the Marcellus Shale, which stretches across Pennsylvania, New York and West Virginia, had 410 trillion cubic feet of recoverable gas — enough to meet all our gas needs for the next 20 years or so. Then, last August, the U.S. Geological Survey slashed that estimate by 80 percent. As I reported at the time, the final EIA revision was likely to be somewhat less stark, and it was — the EIA now believes there’s some 141 trillion cubic feet that’s “technically recoverable” (this means the amount of gas that can be extracted, in theory, using existing technology, though not all of that gas is necessarily worth the economic cost of drilling).
In the end, there’s still plenty of shale gas around the country, and EIA expects production to keep rising, albeit slowly thanks to low prices. By 2021, the report notes, the United States will become a net exporter of gas. But America’s underlying shale resources are a little smaller than many people once thought.