Each year the U.S. Energy Information Administration (EIA) publishes an annual outlook on the energy trends which is not predictions but rather projections based on current status assumptions. As we know, the political, social, and commercial influences on our daily lives and our societies overall will change from year to year. Therefore while the report and the analysis may, or may not, be accurately portraying the future, it is one of the better tools for basing decisions on strategies and investments. I believe it is relatively accurate for the short term and medium term. Feel free to read the full EIA Annual Energy Outlook 2018 report, if you have the desire. Another option is to read the U.S Chamber of Commerce summary and analysis, which simplifies the report for those of us with lower concentration abilities. You can see the Global Energy Institute’s full analysis by Stephen Eule at EIA’s Annual Energy Outlook 2018—The Ups & Downs. Below are the high level bullet points from the Global Energy Institutes review of the EIA’s Annual Energy Outlook 2018.
Energy “Self-Sufficiency”: The United States will become a net energy exporter by 2022, primarily because of increased domestic production—the shale revolution—with an assist from modest energy demand growth.
Hydrocarbons Still Rule: Hydrocarbon sources of energy will still dominate energy supplies in 2050, providing 79% of U.S. needs in 2050.
Domestic Supply & Demand: U.S. energy production is expected to increase at a rate of 0.8% annually and by 2050 will increase a total of 31%. Consumption will increase about 13% between 2017 and 2050, an average of about 0.4% per year.
Domestic Crude Oil Production Sets Records: EIA projects that U.S. crude oil production, mostly tight oil, will in 2022 breech 11 million barrels per day and fluctuate between 11 and 12 million barrels per day out to 2050 (see the nearby chart). That’s a sustained rate 2 million barrels per day higher than the previous U.S. record of 9.6 million barrels per day set in 1970. Astonishing.
Natural Gas Sets Records, Too: As the below chart shows, EIA expects production of this fuel to jump an astonishing 58% out to 2050, from 27 to 43 trillion cubic feet, which should keep the U.S. as the world’s largest producer.
U.S. a Net Natural Gas Exporter: In 2017, the U.S. became a net exporter of natural gas for the first time since 1957. By 2027, net exports are expected to exceed 5 trillion cubic feet from just 0.09 trillion cubic feet in 2017.
Oil Prices Rise Steadily: Crude oil prices rise gradually in EIA’s current projection and don’t top $100 per barrel until 2036, before climbing to about $113 per barrel in 2050.
Electricity Demand: EIA projects that sales of electricity will grow 0.9% per year to 5.1 trillion kilowatt hours in 2050 from 3.8 trillion kilowatt hours in 2017.
Renewables: Both wind and solar capacity additions dip in the early 2020s with the expiration of the Investment Tax Credit for solar and wind and the Production Tax Credit for wind. After 2022, EIA forecasts very little growth in wind power but considerable growth in solar power capacity as solar PV costs continue to decline.
Average Electricity Prices Stay Low: Average electricity prices are anticipated to grow from 10.6 to 11.0 cents per kilowatt-hour between 2017 and 2050, a remarkably low 4% increase over 33 years.
Energy-Related Carbon Dioxide Emissions: Under the current suite of policies, EIA forecasts that energy-related carbon dioxide emissions decline thru the mid-2030s and then gradually rise to, in 2050, about the level they were at in 2017—essentially a wash.
An interesting observation I heard in one of the panels at CERAWeek 2018 was that the solution for global warming will not be found in how we produce energy, but rather in how we resolve emission issues. A statement made in line with this, was that electric cars are not Emissions Free Vehicles (EFV), they are Emissions Elsewhere Vehicles (EEV). In other words, when it comes to energy sources we have painted ourselves into a corner. We will depend on hydrocarbon energy for many years to come. The mix of energy produced from hydrocarbons is going to remain around 80% for now and the foreseeable future. The supply, production, logistics infrastructure, processing, and consumption of hydrocarbon based energy is so complicated and interdependent with our societal structure that no single policy, social movement, or new technology will be able to disrupt our dependency on this resource.
Be safe in all that you do,
