The Asian economic slump and lower than expected growth in demand should moderate world crude oil price rises over
the next few years, according to reference-case projections in the Energy Information Administration's Annual Energy Outlook 1999 (AEO99). After the turn of the century, worldwide
demand is expected to rebound, but continued optimism about the potential growth in production in both the Organization
of Petroleum Exporting Countries (OPEC) and non-OPEC nations leads to projections of relatively modest increase
in prices through 2020.
The AEO99 reference case projects U.S. average wellhead prices of natural gas to rise 0.8 percent
per year on average through 2020, reaching $2.68 per thousand cubic feet. Coal prices, on the other hand, drop
significantly; increases in productivity, greater reliance on cheaper western coal, and flat labor costs combine
to drive down the average minemouth price of coal 30 percent to $12.74 per ton. Impelled by declining coal prices
and the continuing restructuring of the electric power industry, electricity prices also fall, to an average of
5.6 cents per kilowatthour in 2020.
In this environment of declining or modestly increasing energy prices, U.S. total consumption rises about 28 percent
(from the 1997 level) to 120 quadrillion Btu in 2020. Natural gas consumption rises 1.7 percent per year (see figure),
with the greatest gains occurring in the electricity generating sector, where the natural gas share expands from
14 percent to 33 percent by 2020. Petroleum consumption increases 1.2 percent per year, led by continued growth
in transportation demand. Coal consumption rises 0.9 percent annually, reflecting (like natural gas) increased
electricity generation. Electricity demand grows 1.4 percent per year. Renewable fuel consumption rises only 0.8
percent per year through 2020.
The AEO99 projects that energy intensity, expressed
as energy use per dollar of gross domestic product, will decline at an average annual rate of 1 percent, a less
rapid rate than in the 1970's and early 1980's. Per-capita energy use is expected to remain stable through 2020.
Carbon emissions are projected to increase 1.3 percent per year on average, the result of rising energy demand,
the decline of nuclear power, and only modest growth in renewable energy. Hard copies of the report will be released
in late December 1998.
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URL: http://www.eia.doe.gov/emeu/plugs/plaeo99.html
File last modified:
November 25, 1998
