Because U.S. crude oil reserves and production will remain a modest fraction of world reserves and production, the actions of other countries could have a greater impact. However, because U.S. oil demand is a large fraction of world oil demand, changes in U.S. demand are a significant factor in the market.

Greater domestic natural gas demand could boost U.S. reliance on LNG imports and cause a significant rise in domestic prices, though sustained significant increases in production of natural gas from shales could limit that reliance. If gains in production of natural gas from shales are not sufficient to meet heightened U.S. demand (such as for natural gas for electric power production), LNG could become the marginal supply to meet that demand. Eventually, LNG imports could grow to a point that linked the U.S. natural gas market to world LNG prices, which would be much higher than current U.S. prices.

Although domestic coal reserves are ample to 2030 and beyond, upward price pressures may exist. Growth in demand for electricity from coal-fired power plants, potential use of coal for producing liquid and gaseous fuels, the cost of opening new mines, and growth in export markets are examples of such pressures.


Background on Electricity Generation and Carbon Dioxide Emissions

According to the EIA, U.S. electricity production in 2006 was 3727 terawatt-hours, with coal supplying 52 percent and natural gas 16 percent for a combined total of 68 percent, as shown in Table 7.13. The EIA has also made a projection of electricity generation in 2020 using its computer models, assuming a continuation of trends that were evident as of 2008.13 Its reference scenario projects that total electricity generation in 2020 will be up about 16 percent from 2006, with a similar fuel breakdown.14


EIA’s scenarios do not include any changes from current policies; for example, none of the scenarios considered includes a price on carbon emissions.


The EIA reference scenario is not a prediction. The agency has published data showing its performance over the years in projecting actual generation (EIA, 2008e), and the committee has reviewed this record for 10-year electricity projections. The committee found them to be reasonably accurate, with about a ±60 percent uncertainty range. But these projections were made dur

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