(Dec. 14) In the short term, relief. In the long term, look out.
The U.S. Department of Energy predicts that over the next eight years, oil prices will drop below $50 per barrel in 2004 inflation-adjusted dollars.
But looking down the road another 10 or 15 years, consumers can expect mid-aughts woes all over again.
According to the Annual Energy Outlook 2006, from the department’s Energy Information Administration, world crude oil prices are expected to be — in adjusted dollars — $47 per barrel in 2014, $54 per barrel in 2025 and $57 per barrel in 2030.
The $54 projection for two decades from now is $21 higher than the department’s estimate of just a year ago, reflecting the volatility of the world’s oil supply, the report says.
As the combined productive capacity of the members of the Organization of Petroleum Exporting Countries grows at a slower rate than previously projected, oil supplies will tighten, driving prices up, according to the report.
Among the projections:
- Expect to see greater use of alternative fuels and changes in consumers’ automobile buying habits.
- Greater domestic crude production and increased demand for unconventional sources of transportation fuels, such as ethanol and biodiesel, according to the report.
- More domestic coal-to-liquids production and, if prices get extremely high, even domestic production from shale and conversion of natural gas to liquids.
- Growth in petroleum imports is expected to be less than was projected last year.
- Coal consumption should rise from 1.1 billion short tons in 2004 to 1.8 billion in 2030.
- Also expected to increase is nuclear generating capacity.