U.S. Energy Information Administration Administrator Adam Sieminski delivers the after-dinner speech to the Agricutural Outlook Forum Thursday night. (Charles E. de Bourbon/The Hagstrom Report)

Biofuels and other renewable fuel sources from agriculture took a back seat to discussion of natural gas production as U.S. Energy Information Administration (EIA) Administrator Adam Sieminski discussed energy projections Thursday night at the Agriculture department’s 2013 Agricultural Outlook Forum.

In an after-dinner speech, Sieminski said natural gas will become increasingly important in the next 20 years, while growth in U.S. energy production overall is projected to outstrip consumption, citing highlights from the EIA’s Annual Energy Outlook.

The early release of the 2013 report was made in December, making projections for U.S. energy markets through 2040. The full report will be released this spring.

The projection is “less optimistic” than last year’s report about the ability of advanced biofuels to capture a rapidly growing share of the liquid fuels market. It also reports reduced production of cellulosic biofuels, noting that the Environmental Protection Agency has issued waivers “that substantially reduced the cellulosic biofuels obligation under the Renewable Fuels Standard in 2011 and 2012.”
Adam Sieminski
More than once, Sieminski noted that his agency, the Department of Energy’s statistical and analytical arm, just collects and analyzes energy information — it doesn’t make policy.

But he acknowledged that energy policymakers do have a difficult balancing act, trying to serve three primary areas of concern: the environment, national security and the economy.

“We want energy policies to be good for all, to find that ‘sweet spot,’ ” he said. “But how much are you willing to be giving up in one in order to get the others?”

Sieminski highlighted five main projections made in the report:

• Domestic energy production will increase, outstripping consumption as greater vehicle efficiency, greater use of clean energy and reduced energy imports take effect.
• Crude oil production is expected to rise sharply over the next 10 years, thanks to continuing technological improvements that continue to lift the domestic supply.
• Motor gasoline consumption is dropping, a reflection of more stringent fuel economy requirements. A growth in diesel fuel consumption is moderating, with increased use of natural gas in heavy-duty vehicles.
• Natural gas production is expected to be increasingly important, fueling industry and electrical power production as well as serving an expanding export market. The EIA projects that the United States will be a net exporter of natural gas by 2020.
• Carbon dioxide emissions related to energy are expected to remain at more than 5 percent below their 2005 level, with improved efficiency of energy use and shift away from the most carbon-intensive fuels.

Sieminski emphasized that EIA forecasts are based on existing laws and regulations. “If laws and regulations change, the forecast is likely to change,” he said.

He outlined some of the changes in energy use that may be indicated by the projections, such as increased use in liquid natural gas (LNG) to fuel trucks and trains.

“Imagine an LNG tank behind a diesel train engine, just like a coal car behind a steam engine,” Sieminski said.

He described how new technology has enabled the boom in natural gas production from shale beds, with horizontal drilling allowing producers to find more gas reserves. He spoke of the LNG facility being developed in Sabine Pass, La., and the possibility of another in Alaska, where is said there is a “huge amount of gas.”

Sieminski touched a number of times on how changing technology continues to influence energy production and consumption, pointing to the efficiency of appliances and cars as major factors.

The costs of solar power right now seem to be too high, but technological changes should eventually bring those costs down, he said, with production of biodiesel and cellulosic biofuel also likely to go up as technology improves.

“Technology dramatically changed oil and gas production, and biofuels technology should also change,” Sieminski said.

He also noted that while per capita energy usage has been fairly flat, with increased efficiencies, industrial conservation efforts and improved commercial building standards, “I suspect we’ll see lower per capita energy usage numbers in the future.”

Projecting the future remains an inexact science, he noted, referring to the “dirty laundry” of forecasting.

“It’s human nature to think that what we see today is what will we see in the future,” he said. “It never turns out that way.” Somehow, he said, it seems economic predictions get anchored in the prices that exist the day the forecast gets written.

“It’s really hard to step back and say things will be different 10 years from now,” he said.

“I’m absolutely certain of one thing — that the forecast through 2040 will be wrong,” he said with a smile. “If parts of it are right, then it’s random luck.”

• Annual Energy Outlook 2013 Early Release Overview