November 20, 2002

The Energy Department projects that the United States will become increasingly dependent on foreign supplies of oil and natural gas in the next two decades.

The Energy Outlook 2003, an annual projection of U.S. energy demand, says that total U.S. energy consumption will rise by one third between 2001 and 2025, the period covered by the forecast.

However, demand for petroleum is forecast to increase faster, by almost 50 percent, while supply of domestic oil is projected to remain roughly flat, according to a November 20 news release previewing the report by the Energy Information Administration (EAI), a research unit of the Energy Department.

To close the gap, the United States will need to rely more on oil imports, which are forecast to surge from 55 percent to 68 percent of projected consumption, EAI said.

With demand for natural gas projected to grow more than 50 percent by 2025, U.S. natural gas supplies will increasingly depend on large, new domestic and foreign sources, it said. Pipeline and liquefied natural gas (LNG) imports are projected to more than double, increasing their share of total natural gas demand from 15 to 22 percent, EAI added.

Meeting demand for increased natural gas imports will depend on expanding the four existing LNG terminals and constructing three additional ones in the United States, as well as on completing a gas pipeline in Canada, according to EAI.

EAI said that increased demand for oil would be driven mostly by the transportation sector and higher demand for natural gas by the power-generation industry, which is forecast to rely increasingly on natural gas to produce electricity.

The release also highlights some of the trends described in the report, including:

• The energy efficiency of the economy increasing at an average 1.5-percent annual rate;

• Carbon dioxide emissions growing at an average 1.5-percent annual rate;

• The share of renewable sources in total electricity generation rising by 1 percent between 2001 and 2025.