A Briefing on US Energy

Quotes below are from the Energy Information Administration of the US Department of Energy.

“The United States of America is the world’s largest energy producer, consumer, and net importer. It also ranks eleventh worldwide in reserves of oil, sixth in natural gas, and first in coal.”

The US is becoming increasingly dependent on imported oil compared to domestic sources. Over the last 20 years as demand has risen and US production has fallen, crude oil imports have increased to make up the difference.

“Total 2004 petroleum demand is projected to grow by 420,000 barrels per day, or 2.1%, to an average 20.4 million barrels per day.”

“The United States averaged total gross oil (crude and products) imports of an estimated 12.2 MMBD during 2003, representing around 62% of total U.S. oil demand.”

“With the rebound in world oil prices since March 1999, U.S. crude production fell slightly in 2002 and 2003, and is now at 50-year lows.”

US Strategic Petroleum Reserves (SPR) have been increasing as US production is decreasing and prices are rising.

“In mid-November 2001, President Bush directed the Department of Energy (DOE) to fill the SPR to its capacity of 700 million barrels in order to ‘maximize long-term protection against oil supply disruptions.'”

But while our oil is increasingly coming from foreign sources, oil is shrinking as a percentage of our economic picture. Demand for oil is increasing at a slower rate than US GDP. Accordingly, emissions follow this pattern.

“U.S. carbon emissions per dollar of GDP have been declining steadily since at least 1980.”

This is an important trend because the US environmental impact is a growing point of international pressure.

“The United States, with the world’s largest economy, is also the world’s largest single source of anthropogenic (human-caused) greenhouse gas emissions.”

“On March 27, 2001, the Bush administration declared that the United States had “no interest” in implementing or ratifying the Kyoto treaty limiting greenhouse gas emissions, but that it would pursue other ways of addressing the climate change issue.”

This rejection was not completely in denial of the international environmental issues, though.

“In February 2002, the Bush Administration released its proposed alternative to the Kyoto Treaty, calling for significant reductions in emissions of various pollutants (mercury, nitrogen oxide, sulfur dioxide). The program, known as the “Clear Skies Initiative,” would utilize a “cap and trade” system which would allow companies to trade emissions credits. In addition, the Bush Administration envisions reductions in U.S. “greenhouse gas intensity” — the amount of greenhouse gases emitted per dollar of GDP — by 18% over 10 years.”

This proposed alternative is likely to be achievable because the trends of GDP growth and U.S. carbon emissions growth have been in place since 1980.

For the electric power sector, coal-fired plants accounted for 53% of generation, nuclear 21%, natural gas 15%, hydroelectricity 7%, oil 3%, geothermal and “other” 1%.”

Surprisingly, electricity demand is shrinking relative to the economy as well. GDP is growing faster than electricity demand.

“Total U.S. annual electricity demand grew only slightly — about 0.8% — during 2003. For 2004, electricity demand is expected to increase about 2% from 2003 levels, driven by accelerated growth in the economy and weather-related increases in the first and the fourth quarters.”

And even though GDP per kilowatthour is growing, electricity prices have not reflected that change.

“Electricity prices in the United States fell every year between 1993 and 1999, but this trend reversed in 2000, 2001, and 2003.”

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