EIA Issues 2008 Annual Energy Outlook Report

Government agency raises estimated oil price path in early release of adjusted forecast for 2008. Also projects greater use of renewable energy than anticipated in previous AEO Reports.
from US DOE-Energy Information Agency (EIA) press release

EIA has raised the world oil price path in the AEO2008 (Figure 1). In the last few years, global economic growth has been strong, despite high oil prices. While current oil prices are above

EIA’s reference case projection of long-run prices--driven by shortages of experienced personnel, equipment, and construction materials in the oil industry, political instability in some major producing regions, and recent strong economic growth in developing nations--it now appears that, in the mid-term, the cost of liquids will be higher than previously projected. In the AEO2008 reference case, real (2006 dollars) world crude oil prices decline gradually from current levels to $58 per barrel in 2016, as expanded investment brings new supplies to the world market. After 2016, real prices rise as higher cost supplies are brought to market. In 2030, the average real price of crude oil is $72 per barrel in 2006 dollars.

As result of higher energy prices and slower U.S. economic growth (gross domestic product grows at 2.6 percent per year between 2006 and 2030 in AEO2008 compared to 2.9 percent per year in AEO2007), total primary energy consumption in the AEO2008 reference case grows more slowly then in previous AEOs, increasing at an average rate of 0.9 percent per year, from 100.0 quadrillion Btu in 2006 to 123.8 quadrillion Btu in 2030—7.4 quadrillion Btu less than in the AEO2007 reference case (Figure 2).

Read more>>