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^ ^ <br />e ~ in er ester <br />FORECASTS FOR MANAGEMENT DECISIONMAKING <br />1729 H St. NW, Washington, DC 20006-3938 • KiplingerForecasts.com • Vol. 82, No. 15 <br />Dear Client: Washington, April 15, 2005 <br />The bad news: Energy will remain costly <br />at least through the end of this decade. <br />Unlike the spike of the late 1970s-early 1980s, <br />recent oil price gains will stick, not abate. <br />® But there's a good side to this story: <br />Pricey fuels are sparking investments <br />in conservation and expanding energy sources. <br />Both will temper the U.S. appetite for energy. <br />So pain now will yield gain later. <br />Energy firms are reviving many projects <br />previously on hold. Sustained high fuel costs <br />in the coming years will make them worthwhile. <br />Natural gas extraction from sand, shale <br />and coal beds will supply as much as a third <br />of U.S. demand for natural gas in 10 years. <br />The Economy GDP, interest rates <br />SarbaneS-Oxley Regulatory relief <br />TaxesThe future of the estate tax <br />CongresSTom Delay on the edge <br />HR Pay raises, workers' leave policy <br />Oil produced from shale will supply 2 million barrels a day <br />of the 25 million barrels a day of total U.S. oil demand by 2020. <br />Liquefied natural gas terminals will handle 4 trillion cubic feet <br />of natural gas imports by 2015, up from 1 trillion cubic feet this year. <br />Wind power generation capacity is poised to rise 30% a year <br />as R&D on blades, motors, wind sensors and batteries accelerates. <br />Investments by GE, Vestas, American Superconductor and others ensure it. <br />Solar power is due for a lift, now that BP Solar is moving ahead <br />with plans for thin-film, flexible solar cells for use on buildings. <br />Crude Oil <br />(per barrel, <br />2005 dollars) <br />~~. <br />2000-2010 <br />Energy users are busily searching for savings, <br />notably in the most-fuel-dependent industries: <br />Airlines will opt for more-efficient airplanes, <br />such as Boeing's 787, which is due out in 2008. <br />Truckers can use power packs instead of idling <br />to run coolers, etc., when trucks aren't moving. <br />Manufacturers will turn to heat-power systems, <br />capturing waste heat from industrial processes. <br />Many firms are seeking to cut electricity use. <br />So "Super T8" lights reduce lighting bills by 15%. <br />Sources: Energy Dept., Kiplinger <br />Tuning up HVAC systems and repairing leaky ducts <br />improve heating and air-conditioning performance, lowering costs by 20%. <br />Consumers will favor energy-stingy appliances and equipment... <br />water heaters, AC systems...bearing Energy Star high-efficiency ratings. <br />Another popular move: Installation of programmable thermostats <br />that reduce homeowners' costs for heating and cooling by about 10%. <br />The economy's energy efficiency is poised to rise 10% by 2010, <br />meaning it'll take 10% less energy to produce a given amount of GDP. <br />Efficiency will have gone up 50% since the first oil embargo hit in 1973. <br />The Kiplinger Letter (ISSN 15287130) is published weekly for $B4lone year, $154,~Fwo years, $222/three years Subscription IngWlIBS: 800 544-0 7 55 or subservices(a~kiplingercom <br />by The Kiplinger Washington Editors, 1729 H St., NW, Washington, DC 20006-3938. EdifOllal In/OIIi18h011: Tel„ 202 88 7-64 62; Fax, 202-178-8916; <br />Periodicals postage paid at Washington, DC. <br />POSTMASTER: Send address changes to The Kiplinger Leiter, P0. Box 3295, Harlan, IA 51593. E-mail, letters@ktplinge!com; or Web site, KiphngerForecasts.com <br />