The Department of Energy's Energy Information Administration short-term outlook projects total electricity generation will fall 0.3 percent in 2011, following a 4.0 percent increase in 2010.

A forecast 6.0 percent increase in conventional hydropower generation during 2011 (due to an assumed return to near-normal precipitation levels) and a 13 percent increase in generation from other renewable sources, mostly wind, are expected to lead to a 2.4 percent reduction in coal-fired generation and a 1.0 percent decline in natural gas generation. During 2012, EIA expects a 2.6-percent increase in total electric power sector generation, which will be fueled primarily by increased generation from coal, natural gas and non-hydropower renewables.

EIA also estimated that coal consumption in the electric power sector grew nearly 5.0 percent in 2010, primarily the result of higher electricity consumption because of a warm summer.  EIA projects that coal consumption in the electric power sector will decrease by 1.1 percent in 2011 as increases in generation from hydropower and other renewable energy sources back out coal.  In 2012, projected electricity generation increases by 2.7 percent and coal consumption in the electric power sector grows by 3.6 percent, EIA forecasted. 

Turning to natural gas, EIA expects total natural gas consumption to decline 0.9 percent in 2011. Projected residential and commercial consumption are expected to fall by about 2.7 percent in 2011. Forecast natural gas consumption in the electric power sector falls by 1.0 percent in 2011 because of an expected return to near-normal summer weather. Only industrial sector natural gas consumption rises in 2011, by 1.1 percent, because of the 1.2 percent increase in the natural-gas-weighted industrial production index.

Total natural gas consumption is forecast to grow by 1.6 percent in 2012 to 66.5 billion cubic feet a day (Bcf/d).  While projected commercial and residential consumption decline by 0.2 percent from 2011 to 2012, the electric power and industrial sectors drive growth with projected increases of 3.6 and 1.6 percent, respectively.

The projected decline in production in 2011 and increase in natural gas consumption in 2012 contribute to a strengthening of natural gas prices late in this year and next. As natural gas prices begin to rise, forecast production rebounds in 2012, growing by 2.2 percent.  Projected total marketed production averages 64.2 Bcf/d in December 2012 compared with 62.3 Bcf/d and 60.6 Bcf/d in December 2010 and December 2011, respectively.

The forecast resumption of growth in electricity generation and improvement in economic growth in 2012 contribute to a 2.4 percent increase in fossil-fuel CO2 emissions.  Projected fossil-fuel CO2 emissions in 2012 remain below the levels seen since 1999 and 4.4 percent below 2005 emissions.

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