NEW YORK, N.Y. - The Energy Department says the nation's energy picture is getting ever rosier. Production is rising, consumption is slowing, and prices are expected to remain in check.
According to the Energy Department's annual outlook, domestic oil output may regain the peak it reached in 1970 over the next two years and gasoline prices will fall over the same period to just over $3 per gallon.
Natural gas production and use will continue to soar, demand for gasoline will fall, and energy-related emissions of carbon dioxide will remain below 2005 levels for the next quarter-century.
"The report confirms that the United States really is experiencing an energy revolution," said Daniel Yergin, vice chairman of the research and analysis group IHS and author of "The Quest: Energy, Security, and the Remaking of the Modern World."
The increased oil and gas production, Yergin said, is giving "a big boost to the U.S. economy at a time when it really needs a boost."
The outlook, produced every year by the Energy Information Administration, projects U.S. production, consumption, and prices for energy through 2040. On Monday the EIA revealed the first part of the outlook, its "reference case," which assumes stable domestic and global markets and policies.
Here are some highlights of the report:
— U.S. crude oil production will rise by 800,000 barrels per day through 2016 to reach 9.5 million barrels per day, just shy of the 1970 record of 9.6 million barrels per day. It will then level off and slowly decline after 2020.
— Natural gas production will grow steadily throughout the period, and reach 37.6 trillion cubic feet per year by 2040— 56 per cent above 2012 levels.
— Total energy imports will fall to just 4 per cent of domestic consumption by 2040 as the nation produces more oil and natural gas while using less, down from a high of 30 per cent in 2005.
— Cars will use less energy in 2040 than they do now, and less than the EIA predicted last year. The government now assumes the number of miles travelled will grow more slowly than previously forecast because of demographic changes such as slower population growth. At the same time, vehicle fuel economy is expected to improve dramatically because of minimum fuel economy standards. That will reduce energy use for cars by 24 per cent between 2012 and 2040.
— The average retail price of gasoline, in today's dollars, will fall to $3.03 per gallon by 2017. It will then rise, reaching $3.90 by 2040, lower than forecast last year. Prices for natural gas and electricity are expected to rise, but moderately.
— Renewable sources will generate 16 per cent of the nation's electricity by 2040, up from 12 per cent last year. Natural gas will shoulder the biggest load, at 35 per cent, followed by coal at 32 per cent and nuclear at 16 per cent.
— Improved efficiency of cars and a shift away from coal for electricity generation will keep energy-related emissions of carbon dioxide below 2005 levels through 2040. In 2020, emissions will be 9 per cent less than 2005 and in 2040 they will be 7 per cent less.
Jonathan Fahey can be reached at http://twitter.com/JonathanFahey.