OREANDA-NEWS. The US will need to invest billions of dollars in its aging electric and natural gas infrastructure because of significant changes in how and where energy is being produced and consumed, President Barack Obama's administration said in a major energy report.

The Quadrennial Energy Review, released today, found the US power sector is at a "strategic inflection point" because of shifts in the generating fuel mix, increased vulnerability to extreme weather and growth in new technologies. The report expects efforts to cut CO2 emissions would likely accelerate those changes and drive investment in new transmission infrastructure.

The report also found that gas and oil infrastructure has not kept pace with changes in the amount of those fuels being produced and their location. It estimates the gas industry will need to invest \$2.6-\$3.5bn/yr in interstate pipelines for the next 15 years, depending on overall levels of natural gas demand.

The publication of the report culminates nearly two years of work, much of it centered at the US Department of Energy (DOE). Obama wanted the report to offer a "road map" for energy policy that would provide lawmakers, investors, industry and others a better idea of US energy needs.

Vice president Joe Biden, energy secretary Ernest Moniz and White House science advisor John Holdren are expected to discuss the report this afternoon in Philadelphia. This year's report focuses specifically on energy transmission, storage and distribution.

The report highlights many familiar themes in the US electric sector, including the declining use of coal and a growing reliance on renewable energy and natural gas. The report notes that the power sector used 21.4 Bcf/d (221bn m?/yr) of gas in 2013, an increase of more than 40pc from 2005. Wind power output tripled from 2008 to 2013, during which solar output grew more than tenfold.

That changing generation mix, combined with a need to replace aging grid infrastructure and maintain reliability, will likely drive "large transmission and distribution investments" over the next two decades, the report says. It also recommends developing policies needed to address the risk of losing power transformers, such as creating a transformer reserves program.

Among the recommendations included in the report are for the Department of Energy to support research and development into grid modernization and to offer states financial assistance to promote grid infrastructure development. The report also wants the energy agency to conduct a national review of transmission plans and barriers to their implementation.

For natural gas infrastructure, the report recommends that the Department of Energy establish a program to accelerate replacement of gas distribution systems and improve maintenance, at a cost of \$2.5-\$3.5bn over 10 years. It also recommends trying to better quantify greenhouse gas emissions from natural gas systems.