United States consumers and the nation's energy industry experienced extremely volatile prices during 2002.
But as measured by gross domestic product, the American economy is expected to expand at 3 percent annually through 2025, indicates the U.S. Department of Energy.
Spot natural gas prices, registering at approximately $2 per thousand cubic feet in January, nearly doubled by fall 2002, points out the U.S. Department of Energy.
Crude oil prices started the year at roughly $16 per barrel, but reached $25 and $30 by the fall.
Data compiled in the federal agency's Energy Outlook 2003 reflect the impact of the price trends on the industry and the nation.
The report focuses on long-term fundamentals, including the availability of energy resources, developments in U.S. electricity markets, technology improvements and the impact of economic growth on projected demand as well as prices through 2025.
A major consideration for energy markets through 2025 involves the availability of adequate supplies of natural resources at competitive prices, indicates the DOE report.
The federal agency's forecast estimates that the average mine mouth price of coal will drop from $17.59 to $14.40 per short ton by 2020, then remain relatively stable through 2025.
Coal prices have declined because of increased productivity, a shift to western operations and competitive pressures on labor costs.
DOE predicts that total coal consumption will jump from 1,050 to 1,444 million short tons by 2025, representing an average increase of 1.3 percent per year.
Electricity generation from coal, natural gas, nuclear and renewable fuels is projected to increase through 2025 to meet growing demand.
Natural gas' share is expected to climb from 17 percent in 2001 to 29 percent in 2025. Coal's share will decline from 52 percent in 2001 to 47 percent in 2025.
Nonetheless, coal will remain the primary fuel for electricity generation through the year 2025, with 74 gigawatts of new coal-fired generating capacity being constructed between 2001 and 2025.
As domestic demand grows, DOE predicts that U.S. coal production will expand from 1,138 million short tons in 2001 to 1,359 million by 2020 for an annual 0.9 percent rate.
By 2025, U.S. coal production should reach 1,440 million short tons, but exports are projected to fall throughout the forecast period.
The drop reflects declining demand and intense competition from international coal producers.
DOE forecasts a 1.9 percent annual total electricity demand growth through 2020 and 1.8 percent per year from 2001 to 2025.
Average electricity prices are expected to decline from 7.3 cents per kilowatt-hour last year to 6.3 cents by 2007 due to cost reductions in a competitive market in coal prices.
After 2008, average electricity prices should increase by 0.4 percent per year as a result of rising natural gas costs and a growing demand.
Electricity prices are anticipated to reach 6.6 cents per kilowatt-hour in 2020 and 6.7 cents by 2025.
Domestic natural gas production is predicted to increase from 19.5 in 2001 to 25.1 trillion cubic feet by 2020 for an average annual rate of 1.3 percent.
After 2020, domestic production will jump due to completion of an Alaskan pipeline.
Total domestic natural gas production will reach 26.8 trillion cubic feet by 2025.
Total demand for natural gas is projected to increase at an average 1.8 percent annually until 2025, climbing from 22.7 trillion cubic feet to 34.9 trillion cubic feet primarily due to expanding electricity generation.
Despite expanding domestic production, imports of natural gas imports are projected to increase from 3.7 trillion cubic feet or 16 percent of total demand in 2001 to 7.8 trillion cubic feet or 22 percent of total demand in 2025.
DOE predicts climbing natural gas prices as technology improvements prove inadequate to offset the impacts of resource depletion and increased demand.
Natural gas prices are expected to reach $3.70 per thousand cubic feet by 2020 and $3.90 by 2025.
Total energy consumption is expected to expand from 97.3 to 130.1 quadrillion British thermal units (Btu) between 2001 and 2020, an average annual 1.5 percent increase.
By 2025, total energy consumption is projected to reach 139.1 quadrillion Btu.
Residential energy consumption is projected to grow at an average 1 percent rate per year between 2001 and 2025.
By 2020, residential demand should total 24.5 quadrillion Btu, then climb to 25.4 quadrillion Btu by 2025.
Commercial energy demand will grow at an annual 1.6 percent rate through 2025, registering at 23.5 quadrillion Btu in 2020, estimates the DOE report.
Commercial floor space should increase by an average of 1.6 percent annually from 2001 to 2020.
Industrial energy demand is expected to climb 1.3 percent per year across the nation through 2025, totaling 41.7 quadrillion Btu in 2020 and 44.4 quadrillion Btu in 2025.
Transportation energy demand is projected to expand 2 percent annually through 2025, totaling 40.4 quadrillion Btu in 2020 and 44.0 quadrillion Btu by 2025.
Expanding consumption will result from an increase inmiles traveled and a lower level of vehicle efficiency.
Light duty vehicle miles will climb 2.4 percent per year through 2020 and 2.3 percent through 2025.
The DOE outlook indicates that light duty vehicle efficiency should reach 25.6 miles per gallon by 2020 and 26.1 miles per gallon by 2025.
The DOE outlook forecasts that renewable energy production will increase from 5.5 to 8.7 quadrillion Btu between 2001 and 2020. By 2025, production should reach 9.2 quadrillion Btu.
The federal agency estimates that renewable generation will climb from 298 billion kilo-watthours in 2001 to 476 billion kilowatthours by 2020 for a 2.5 percent annual expansion rate. Total generation will reach 495 billion kilowatthours by 2025.
Total consumption is expected to increase more rapidly than domestic energy production through 2025. As a result,imports are projected to meet a growing share of the demand.
The forecast anticipates an average annual 2.2 growth rate in renewable fuel consumption through 2025, including ethanol for gasoline blending. About 55 percent of the demand for renewables in 2025 will be for electricity generation.
Due to climbing costs from 1970 to 1986, energy intensity declined 2.3 percent annually. The U.S. economy's shift to less energy intensive industries, product mix changes and the adoption of efficient technologies played key roles in the decrease.
Energy intensity is projected to continue to decrease 1.5 percent annually through 2025 as continued efficiency gains and structural economic shifts offset the demand for services.
Energy use per person declined from 1970 through the mid-1980s but started to climb as prices dropped in the late 1980s and 1990s.
DOE expects per capita energy usage to increase 0.7 percent annually through 2025.
Net imports accounted for 55 percent of total U.S. oil demand in 2001, up from 37 percent in 1980 and 42 percent in 1990, explains the federal agency.
The trend is expected to continue, accompanied by an increase in refined petroleum product imports.
The average world oil price is projected to increase from $22.01 per barrel in 2001 to $25.83 in 2003, then drop to $23.27 in 2005.
Rising long-term prices are projected, increasing to roughly $25.50 in 2020 and $26.50 in 2025, as a result of higher world oil demand. The average price is expected to reach $48 per barrel by 2025.
DOE predicts that the world oil demand will jump from 76 million barrels per day in 2001 to 112 million in 2020. The demand, including conventional and unconventional oil supplies, should climb to 123.2 million barrels per day by 2025.
Expanded production in OPEC and non-OPEC nations will lead to relatively slow growth in prices through 2025.
Total petroleum demand is projected to expand 1.7 percent annually through 2025 and total 29.17 million barrels per day, led by growth in the transportation sector. Transportation is expected to account for about 74 percent of petroleum demand in 2025.
Projected U.S. crude oil production will decline to 5.3 million barrels per day by 2025, an average annual rate of 0.4 percent between 2001 and 2025.
Total domestic petroleum production - crude oil plus natural gas plant liquids - will increase from 7.7 million barrels per day in 2001 to 8.0 million by 2025.
By 2025, net petroleum imports are expected to account for 68 percent of demand, up from 55 percent in 2001.
Existing nuclear plants have improved performance and lowered operating costs.
The prior downturn should be delayed or eliminated and the forecast projects an increase in nuclear capacity as well as generation.
Nuclear generating capacity is expected to expand slightly, but no new facilities will come on line. Total nuclear capacity is projected to climb from 98.2 gigawatts in 2001 to a peak of 100.4 gigawatts by 2006 as a result of uprates before declining to 99.6 gigawatts by 2025.