The Energy Information Administration has released its Annual Energy Outlook (AEO) 2019 with projections to 2050. The purpose of the AEO is to provide long-range energy projections for the United States, based on a Reference case and six side cases that vary important underlying assumptions.
The Reference case projection is the benchmark case. It assumes that known technologies continue to improve along recent trend lines. The economic and demographic trends that are used reflect the current views of leading forecasters.
Two of the most important side cases are the High and Low Oil Price cases, which represent conditions that could collectively drive prices to extremes.
The key takeaways from the AEO2019 are:
- The U.S. becomes a net energy exporter in 2020 and remains so through 2050 as a result of large increases in crude oil, natural gas, and natural gas plant liquids (NGPL) production and slower growth in U.S. energy consumption
- Among the fossil fuels, natural gas and NGPLs have the fastest production growth rates
- Natural gas prices remain comparatively low through 2050, leading to increased domestic usage and increased liquefied natural gas (LNG) exports
- The power sector continues to shift from coal and nuclear plants toward natural gas-fired electricity generation and intermittent renewables
- The U.S. economy continues to expand, but increasing energy efficiency keeps U.S. energy consumption relatively flat
Related: Oil Prices Rise As Saudis Pledge Deeper Cuts
U.S. oil production continues to increase in every case through about 2025, but in five of the six cases it begins to flatten or decline before 2030:
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Projected oil production through 2050.
Natural gas production is expected to increase significantly in almost every case:
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Natural gas production and demand will continue to grow.
The biggest change in the natural gas trade is projected to be a surge in LNG exports:
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LNG exports will drive the natural gas trade.
Coal-fired and nuclear power decline in every scenario, while new capacity additions are dominated by natural gas and renewables (primarily solar power). The share of solar power among renewables is forecast to rise from 13% in 2018 to 48% in 2050:
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Electricity capacity additions and retirements.
Conclusions
The latest Annual Energy Outlook from the EIA models future energy projections under several scenarios. The U.S. is projected to become a major net energy exporter during the projection period as the U.S. shale revolution continues to deliver higher volumes of oil and natural gas. The power sector continues the trend in recent years of phasing out coal in favor of natural gas and renewables.
By Robert Rapier
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