The Short Term Energy Outlook released today by the US Energy Information Agency (EIA) is yet another dramatic energy document for 2008. Not only do they project further stagnation for coal and natural gas demand in 2008, but they deepen this year’s expected fall in oil consumption from 5.4% to 5.8% below 2007 levels. In a big turnaround from previous reports, the EIA projects global oil demand will actually fall in 2008 and 2009, the first consecutive drops since 1982-1983.

The report begins with a projection that global GDP growth will finish up at 2.7% in 2008 (compared to ~4% in 2006 and 2007) and just .5% in 2009. This lower economic growth drives large reductions in energy demand and explains today’s lower fuel prices. Their prediction of lower global oil demand could translate into lower global greenhouse gas emissions (GHGs) for the first time in several years. Once I find data on expected coal and natural gas consumption, I will share whether this potential reduction in GHGs from energy may pan out globally like we have in the US this year.

Bottom line: Lower oil use has helped lower costs and carbon emissions in the US and throughout the world. As a result, the US will experience ~2.5% lower GHGs from energy consumption in 2008. And the growth rate for global GHGs will be lower than the ~2.5% increases of 2006 and 2007, but it’s hard to tell at this point how much lower. Whether we deploy the efficiency to continue these cost reductions and emissions reductions after 2009 depends on the public and private decisions of policymakers and all of us. We can achieve an efficient sustainable energy future.