The U.S. Energy Information Administration (EIA) issues a Short-Term Energy Outlook (STEO) on a monthly basis that makes for ponderous but informative reading. Recent EIA reports, and comments from industrial and financial analysts, provide some better news than Washington political fronts, which mostly cause mental nausea.
Most readers are concerned with the price and availability of natural gas and electricity. Table 1 is a look at the total energy picture as it exists today and its projections for next year.
These estimates are based on many domestic and foreign market histories, reflecting trends and factors that affect national industrial growth and stability. These STEO reports track well with historical production, consumption and pricing. History is one thing, but projections into the future are another.
The current STEO assumes real GDP growth of 1.6% for all of 2013 and 2.6% growth in 2014 with a 3.2% growth pace by the end of the fourth quarter of 2014. The EIA predicts private real fixed investment growth at an average 6% in 2013 and 7.8% in 2014. Consumption expenditures are projected to grow faster than real GDP in 2013 (1.9%) but slow in 2014. Export growth is expected to triple from 1.7% to 5.1% over these two years.
The total unemployment rate is forecast to average 7.6% for 2013 and fall gradually to 7% by the end of next year. Non-farm job growth is expected to match the prior year and continue at 1.6%. Consumer and price indices are expected to hold at constant rates of increase or grow “at a moderate pace.” It is evident that many past EIA projections were wishful thinking, and this fact continues to plague federal studies and data interpretations. A few examples illustrate the point.
The 2013 EIA Annual Report has dramatically reduced estimated share of U.S. biofuels use in 2035 by 20% to 4.2 quadrillion BTU. Astonishing how these folks can predict this rather obscure measure 23 years away. Of course, the number of flex-fuel vehicles (FFV) in use that year will only be 1.3 million instead of the 2.9 million forecast last year. And battery electric cars will only sell 119,000 units in 2035, down 65% from the prior year estimate, probably “offset by increased sales of hybrid and plug-in hybrid vehicles.”
In spite of all this nonsense, these projections do not accommodate facts or mention that all renewable energy sources –
wind, solar, geothermal, biomass or hydropower (with hydro being two-thirds of this category of production, which totals 12% of all energy generation) – are a miniscule portion of national energy production and consumption. This lack of realism in our federal DOE report on real conditions should disturb the public. What this says to me is more than sad. The public must be very careful in reviewing government reports because lies or obfuscations do not trump facts.
Several encouraging items, however, should be noted. While 20% of U.S. electricity is produced at 104 nuclear reactors in 31 states, 26 new nuclear electric plants should come on-line beginning in 2015 and out-years. Modernization investments to America’s electricity distribution grid should reflect a $130 billion annual benefit for the economy by 2019. Finally, enhanced use of combined heat and power (CHP) facilities is coming. A 50% increase to 40 GW annual output is currently in process and will come online in the coming months.
Yes, there does seem to be some better news regarding our nation’s energy future. IH
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