Energy expenditures will decline according to U.S. Energy Information Administration annual “Energy Outlook”

April 19, 2013

The U.S. Energy Information Administration (EIA) began releasing its annual Energy Outlook study for 2013 this week. The study is being released in stages from April 15 to May 2, beginning with legislation and regulations and ending with a look at the impact of natural gas.

The EIA is quick to point out that “projections by the U.S. Energy Information Administration are not statements of what will happen but of what might happen, given the assumptions and methodologies used for any particular case. The Reference case projection is a business-as-usual estimate, given known market, demographic, and technological trends.”  That said, there are some very interesting tidbits of information and possible future scenarios outlined.

For starters, no matter what individual fleets may have experienced recently concerning fuel prices, the study reports that total U.S. energy expenditures will decline relative to GDP.  The projected ratio of energy expenditures to GDP will average 6.8 percent from 2011 to 2040, which is below the historical average of 8.8 percent from 1970 to 2010.

The Outlook also envisions a significant decline in U.S. energy use per capita. “The decline in energy use per capita is brought about largely by gains in appliance efficiency and an increase in vehicle efficiency standards by 2025,” the Outlook projects.  

When it comes to transportation, the Outlook notes that “LDVs [light-duty vehicles] that use diesel, other alternative fuels, hybrid-electric, or all-electric systems [will] play a significant role in meeting more stringent GHG [greenhouse gas] emissions and CAFE standards over the projection period. Sales of such vehicles [will] increase from 20 percent of all new LDV sales in 2011 to 49 percent in 2040.” In other words, nearly half of all light-duty vehicles could be running on so-called “alternative power” in just less than 30 years.

Natural gas, the current alternative power darling of the marketplace, really is the fastest-growing fuel in the transportation sector, according to the Outlook, with an average annual projected growth rate of 11.9% from 2011 to 2040.

The Outlook also sees heavy-duty vehicles leading the natural gas adoption march with natural gas fuel consumption  increasing “from almost zero in 2011 to more than 1 quadrillion Btu in 2040, at an average annual growth rate of 14.6 percent”-- not insignificant.

“Although vehicle uses currently account for only a small part of total U.S. natural gas consumption,” the Outlook finds, “the projected percentage growth in natural gas demand by vehicles is the largest percentage growth in the projection.”

Traditional fuels, on the other hand, will begin to decline in use, according to the Outlook. “Consumption of petroleum and other liquids peaks at 19.8 million barrels per day in 2019 in the AEO2013 Reference case and then falls to 18.9 million barrels per day in 2040. The transportation sector accounts for the largest share of total consumption throughout the projection, although its share falls to 68 percent in 2040 from 72 percent in 2012 as a result of improvements in vehicle efficiency following the incorporation of CAFE standards for both LDVs and HDVs.”  

About the Author

Wendy Leavitt

Wendy Leavitt joined Fleet Owner in 1998 after serving as editor-in-chief of Trucking Technology magazine for four years.

She began her career in the trucking industry at Kenworth Truck Company in Kirkland, WA where she spent 16 years—the first five years as safety and compliance manager in the engineering department and more than a decade as the company’s manager of advertising and public relations. She has also worked as a book editor, guided authors through the self-publishing process and operated her own marketing and public relations business.

Wendy has a Masters Degree in English and Art History from Western Washington University, where, as a graduate student, she also taught writing.  

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