[BETA] Fortnightly

With little fanfare, most aspects of the U.S. energy system seem to have settled into a fairly stable, predictable pattern. To my mind, we have reached an "energy plateau" likely to persist for maybe a decade or more into the future.

Energy is not now high on the radar screen of the general public, so there is little public pressure for significant change in the U.S. energy system. (Electric utility deregulation, which is government-driven, I discuss below.) The low level of public interest reflects the availability of abundant, reliable, and low-cost energy supplies. In addition, the general public feels that the environment is in fairly good condition in most places, so energy-related environmental concerns have abated significantly. All in all, the U.S. public seems generally happy with its energy system and has focused its attention on much more pressing issues.

Fuels: Expect Current Trends to Hold

Oil. The world oil resource base is widely believed to be large and adequate for many more decades of increasing global demand. Prices are low because a competitive industry has been doing its job well and OPEC has been relatively well behaved (em trends that show every indication of continuing for quite some time.

On the downside, oil production in the United States is declining. Imports have passed the 50-percent level and will certainly continue to increase. Imports drain high levels of capital from the United States, forcing further expansion of U.S. exports to maintain a reasonable economic balance. However, since this issue does not excite the public or policymakers, these trends will likely continue.

Natural Gas, Coal, and Nuclear. Natural gas has emerged as a desirable fuel for a variety of domestic applications. It burns clean, costs little, and the United States has a large domestic resource base, considered adequate for 50 years or more. Gas-fired, combined-cycle power generation has developed into the least expensive, easiest, fastest to site, environmentally attractive choice for new central station electricity generation. Accordingly, a large portion of new electric power generation is gas-fired combined-cycle. Serious interest in synthetic oil and synthetic gas, the darlings of the late 1970s and early 1980s, will have to wait many decades before any revival.

In electric power, generation choices have narrowed to natural gas and coal, another abundant and economic domestic fuel. U.S. coal resources appear adequate for 100 years or more, while modern technology has dramatically reduced coal's environmental problems. Nuclear power is at a standstill for a host of reasons, including high costs, intense regulation, public unease, and our inability to resolve the nuclear waste problem. Unless global warming becomes a critical factor, the role of nuclear power will continue slowly to erode.

Photovoltaics. As renewable energy costs continue to decrease, renewables are being increasingly applied to more and more attractive niche uses. For instance, photovoltaics (PVs) with batteries offer an ideal electricity source in remote locations, especially in underdeveloped countries. However, just because the quoted costs of renewables are approaching the costs of existing electric power generation options does not mean we can look to renewables to supply much of