Report: Energy imports’ share of demand down almost half by 2035

Increases in domestic oil and gas production, efficiency and use of renewables will cut the share of U.S. energy demand fulfilled by imports nearly in half by 2035, a federal agency said.

Net imports will satisfy 13 percent of energy demand in 2035, down from 22 percent in 2010 and 29 percent in 2007, according to an analysis from the U.S. Energy Information Administration, an agency of the Department of Energy that prepares studies and compiles data on energy. Additionally U.S. emissions of greenhouse gases will remain below 2005 levels by 2035, according to the agency.

“These projections reflect increased energy efficiency throughout the economy, updated assessments of energy technologies and domestic energy resources, the influence of evolving consumer preferences, and projected slow economic growth,” Howard Gruenspecht, the EIA’s acting administrator, said in a statement.

Domestic oil production will rise 20 percent by 2020 to 6.7 million barrels a day, the highest level since 1994, as shale oil production continues and more Gulf of Mexico resources are developed, according to the agency. That rise will help reduce oil imports, the report added.

Also U.S. natural gas production will exceed consumption by early in the 2020s, according to the agency, as continuing shale-gas development boosts domestic output, pipeline imports drop and pipeline exports rise. Natural-gas prices should remain low in the U.S. relative to other markets, the agency projected.

But recoverable shale gas resources may not be as high as once thought, the agency said. The analysis estimated total recoverable shale-gas resources at 482 trillion cubic feet, down from 827 trillion in 2011’s outlook.

Fossil fuels will continue to dominate, absent a major policy shift, the report said, echoing another more globally oriented outlook from BP. Their share of U.S. energy demand will fall from 83 percent in 2010 to 77 percent in 2035, according to the agency’s report.

Use of renewable energy sources will increase, primarily on the electricity grid, according to the report, which found the share of renewable power generation will increase from 10 percent in 2010 to 16 percent by 2035. But that share could rise further if the U.S. extends renewable-energy tax credits and other incentives that are due to expire in the coming years, the report said.

Coal, which now provides almost half the nation’s electricity, will decline significantly as tougher pollution regulations go into effect, power demand ticks down and competition from renewable sources and natural gas take their toll, the report said.

Coal’s share of generation, already down from 50 percent in 2005 to 45 percent in 2010, will decrease to 39 percent in 2035, the agency said. But the Sierra Club, an environmental group, noting that last year’s outlook forecast coal’s share in 2035 four points higher than this year’s outlook, said the actual percentage could be lower.

“Even today’s EIA projections remain far too rosy for coal,” Bruce Nilles, senior director of the group’s Beyond Coal Campaign, said in a statement.

Although greenhouse-gas emissions will rise 3 percent from 2010 to 2035, they nonetheless will stay below 2005 levels thanks largely to coal’s decline, improved efficiency and state-level renewable-power mandates, the agency said. Energy use and climate-warming emissions fell from 2005 levels as a result of the recession.

The agency added that greenhouse-gas emissions and net oil imports will fall further than projected if the U.S. finalizes proposed fuel-economy standards for cars, minivans and pickup trucks. Last fall two federal agencies proposed standards for model years 2017 to 2025 that would roughly double mileage from current levels by the end of that period.

Upcoming fuel-efficiency standards could prevent 6 billion metric tons of greenhouse gases — almost what the U.S. emitted in all of 2009 — from entering the atmosphere over the lifetimes of the vehicles covered, according to the White House. They also would cut oil use by 2.2 million barrels per day by 2025, roughly one-fourth of current levels, the White House says.