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Upbeat energy outlook

Without lifting a finger, President-elect ronald Reagan will find a brightening US energy outlook as he takes office, according to energy industry analysts.

These analysts are sketching an improved picture as they become increasingly convinced that Americans are serious about saving energy. As a result, long-term forecasts about US energy consumption are being scaled down.

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Some analysts see 1980 as a good example of why a more upbeat view of future US energy demand is justified.

While gasoline was plentiful last year and its price increased less rapidly than the general rate of inflation in consumer prices through November, American motorists still consumed 6.5 percent less of the fuel than in the previous year, according to the US Department of Energy (DOE).

In broader terms, total energy consumption in the United States was down 4 percent through the third quarter of 1980, the latest period reported by DOE. US energy consumption has been rising steadily since 1975, and even marked a slight increase in 1979 when there were periodic shortages.

The economic recession and sharp earlier hikes in energy prices no doubt were factors in last year's frugal energy performance. "But above and beyond that, [ the United States] is doing better than expected with conservation," says forecaster S. M. Lambert of the Shell Oil company. In a report last August, Shell predicted US energy demand would grow 1.2 percent annually in the 1980s, but Mr. Lambert now estimates demand may grow at a slower rate of about 1 percent.

The degree of commitment to conservation by Americans is a surprise mainly in that it has come much faster than expected, says W. R. Finger, energy analysis coordinator for Exxon company USA.As a result of more rapid conservation and other factors. Exxon has lowered its forecast of total US energy consumption in the year 2000 by about 10 percent. Exxon, in its recent world energy outlook, projects that energy demand will expand by about 1 percent annually, on average, over the next 20 years.

Energy consumption forecasts are considered by analysts a very inexact science -- one reason the nation's energy future is always subject to much debate and controversy.

The difficulty with forecasting how much energy Americans will consume, explains MR. Finger, is that it requires assumptions about future prices and consumer attitudes. "What we have now is a big laboratory where we are learning lots of things about how people react to higher energy prices," he says.

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Economist Ted Eck of Standard Oil (Indiana) says, "Conservation is proceeding better than expected." But it attributes much of it to slower growth in personal incomes and wonders what would happen if the US economy rebounds strongly."Will they keep driving smaller cars?" he wonders.

Despite that uncertainty, Mr. Eck is particularly optimistic about the ability of the United States to whittle down its oil consumption. With conservation and more switching from oil to other fuels, Eck now forecasts that US oil consumption could decline about 1 percent each year over the next decade.That is considerably more optimistic than the marginal decline of a small fraction of 1 percent he had forecast just last year.

Another encouraging development built into Eck's forecast is for more rapid improvement in the fuel efficiency of new automobiles.

Despite the slower rate of growth in US energy consumption now being forecast by a number of analysts, conservation may not offset declines in domestic production of conventional energy supplies. Indeed, the Exxon world energy outlook predicts oil and gas imports will grow over the next decade before they decline again in the 1990s as they are replaced by new sources of US synthetic fuels.

Still, conservation and gains in energy efficiency have been considerable. If US energy demand does rise as projected at 1 percent annually or slightly higher over the next 10 to 20 years, it will be growing at a rate one-fifth as rapidly a s it did in the recent 1965-1973 period.

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