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Monday, June 25, 2018

THE US ENERGY CRISIS

America this year faces the most serious energy shortage since the oil embargoes of the 1970s. The American consumer is now facing electricity bills two or three times higher than they were a year ago, along with steadily increasing gasoline prices. The National Energy Policy Development (NEPD) Group has issued a report addressing the fundamental imbalance between supply and demand, which can be found at http://www.whitehouse.gov/energy/

According to the NEPD, over the next 20 years the growth in U.S. energy consumption will increasingly outpace U.S. energy production, if production only grows at the rate of the last 10 years.

At present only 3% of electricity is generated through the consumption of oil (hydropower 7%, natural gas 16%, nuclear 20%, coal 52% and renewables 2%). America produces 39% less oil today than it did in 1970. Estimates indicate that over the next 20 years US oil consumption will increase by 33% or over 6 million barrels per day. If US oil production follows the same historical pattern of the last 10 years it will decline by 1.5 million barrels. To meet U.S. oil demand, oil and product imports would therefore have to grow by a combined 7.5 million barrels per day. In 2020, U.S. oil production would supply less than 30% of U.S. oil needs, leading to an even greater dependency on foreign suppliers.

Its first challenge is considered to be energy conservation. America has made impressive gains in energy efficiency, as a result of which since 1973 the U.S. economy has grown by 126% while energy use has increased by only 30%.

Another challenge to be met is the repair and expansion of its energy infrastructure. Not a single major oil refinery has been built in the U.S. in nearly a generation.

About 90% of all new electricity plants currently under construction will be fuelled by natural gas. Over the next 20 years U.S. natural gas consumption is expected to grow by over 50%. At the same time U.S. natural gas production will grow by only 14%, if it grows at the rate of the last 10 years.

The report advocates increasing and diversifying the range of energy options so that consumers are not vulnerable to price spikes and supply disruptions. This includes the increased used of coal through clean-coal technology, of nuclear power, and of oil and gas through the application of the latest advances in technology, which have made oil and gas exploration and production both more efficient and more environmentally sound.