Despite the fact that renewables will be the fastest-growing energy source in the United States over the next three decades, petroleum and natural gas will remain the most-consumed sources of energy in America through 2050.
That’s the projection in the reference case in the U.S. Energy Information Administration’s Annual Energy Outlook 2022, which explores long-term energy trends in the United States. The reference case, which reflects only current laws and regulations, expects overall energy consumption to grow through 2050, pushed up by population and economic growth.
Renewables will boom, especially in electricity generation, the EIA said in its long-term projection. Yet, petroleum will still hold the biggest share of overall energy consumption in the United States through 2050, followed by natural gas.
These estimates show that oil and gas are not going away anywhere soon and that America, and the world, will still need them in the long term despite the surge in wind and solar power, the rise of electric vehicles (EVs), and battery storage build-outs.
Gasoline Will Remain No.1 Transportation Fuel
Despite the rise in EVs, motor gasoline will remain the most prevalent transportation fuel in the U.S. over the next three decades, according to the reference case in EIA’s outlook.
The share of conventional car sales is set to drop due to the rising share of battery, plug-in, and hybrid electric vehicles. The combined sales of internal combustion engine light-duty vehicles will decline from 92 percent now to 79 percent in 2050. This suggests that even with the rise in EV sales, the gasoline car will still be king in America three decades from now.
Last year, light-duty vehicles (LDVs) accounted for more than half — or 54 percent — of the energy consumed in the U.S. transportation sector. By 2050, that share will drop, but will still remain at more than half, at 51 percent, according to EIA’s estimates.
The Biden Administration is pushing for increased electrification in the transportation sector, aiming to make 50 percent of all new vehicles sold in the United States in 2030 zero-emission vehicles. President Joe Biden vowed last year to replace the almost 650,000-strong federal vehicle fleet with electric cars as part of his climate agenda.
Near-Term Headwinds To EV Boom
Despite favorable Administration policies toward greener transportation and clean energy, growth could slow in the near term due to skyrocketing prices of the key metals used in battery manufacturing. Prices of lithium, nickel, and cobalt surged at the start of the year amid increased demand as all carmakers in the world are now unveiling plans to boost EV production and sales. The Russian war in Ukraine sparked another surge in raw material prices in recent weeks, and some manufacturers have started to raise their vehicle prices as battery makers are hiking battery cell prices.
Because of rising costs for raw materials, Contemporary Amperex Technology Co. Ltd. (CATL), the largest battery maker in the world, already announced today in a statement to Reuters that it had raised the prices for some of its battery cells.
Rising costs for raw materials and logistics have already made Tesla raise its prices for China and the United States. This month, Tesla raised its prices for the second time in less than a week.
“Tesla & SpaceX are seeing significant recent inflation pressure in raw materials & logistics,” Elon Musk tweeted last week.
Cars And Industry Primary Consumers Of Petroleum By 2050
It will be the transportation sector and industrial processes that will be the primary consumers of petroleum and other liquids in the United States, the EIA says. U.S. industrial sector energy consumption will grow more than twice as fast as any other end-use sector from 2021 to 2050. In the industrial sector, the most growth in demand for petroleum is for hydrocarbon gas liquids (HGL) used as a feedstock. Petroleum will remain a major fuel for non-manufacturing industries such as agriculture, construction, and mining, as well as for refining processes.
U.S. Oil Production Seen At Record 13 Million Bpd In 2023
Driven by rising oil prices, crude production in the United States is expected to rise in 2023 to a record-high on an annual-average basis of 13.0 million bpd, the EIA said in its Short-Term Energy Outlook (STEO) for March earlier this month. The current estimate is now raised from the 12.6 million bpd forecast for 2023 in the February outlook.
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U.S. production of natural gas and petroleum and other liquids will rise amid growing demand for exports and industrial uses, the EIA annual outlook says.
“Driven by rising prices, U.S. crude oil production in the Reference case returns to pre-pandemic levels in 2023 and stabilizes over the long term,” the administration said.
Over the short term, U.S. oil production will rise amid skyrocketing oil prices, but not nearly enough to plug the large gap in global oil supply that Russia is expected to leave as soon as next month.
While the Biden Administration finally called on its own producers to boost production - which they cannot do in a month or two - the U.S. oil and gas industry has reiterated that America needs to treat its oil and gas like an asset rather than a liability and invest in long-term energy security.
By Tsvetana Paraskova for Oilprice.com
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And "The combined sales of internal combustion engine light-duty vehicles will decline from 92 percent now to 79 percent in 2050" is obviously nonsense, with car companies falling over each other promising investors how rapidly they will pivot to EVs.
Moreover, there will neither be a post-oil era nor a peak oil demand well into the future. There can never be an alternative to oil as versatile and practicable as oil itself in the next 100 years. Global oil demand will continue to grow albeit at a slightly decelerated rate well into the far future underpinned by a world population projected to rise from 7.9 billion currently to 9.7 billion by 2050 and a global economy projected to grow from $91 trillion currently to $245 trillion by 2050.
And while global energy transition will continue to progress slowly, it will never ever become a total transition. Moreover, even a partial transition won’t succeed without huge contributions from natural gas and to some extent nuclear energy and even coal (yes coal). Therefore, the notion of net-zero emissions by 2050 or 2100 or ever is an illusion.
EVs are bound to get a small share of the global transport system but they will never ever prevail over ICEs even in the next 100 years. Their Achilles’ heel will always be the global electricity expansion needed to charge the supposedly millions of EVs on the roads. Will the electricity expansion be sourced from solar energy, nuclear energy or hydrocarbons? Solar energy is neither dependable nor is it capable of satisfying global demand for energy because of its intermittent nature. Nuclear plants are very costly to build and decommission and moreover, a big sector of the world population doesn’t welcome its use because of the risk of accidents. That leaves natural gas and coal.
US shale oil is a spent force. Claims by the US Energy Information Administration (EIA) that production will rise to 13.0 million barrels a day (mbd) by 2023 is plain hype. Despite high Brent crude oil prices since the start of 2021 shale oil production remained marooned around 11.00 mbd. The excuse shale drillers gave for their inability to raise production is capital discipline. However, this inability has little to do with capital discipline and far more to do with the fact that the rich sweet spots in the shale plays have already been used forcing shale drillers to move to less productive and very costly spots. Moreover, shale well productivity has been declining fast adding to costs of production.
The maximum shale oil production could rise this year is 200,000-300,000 barrels a day (b/d) over 2021 claimed average of 11.0 mbd. I say claimed because US shale oil production in 2021 was estimated between 9.7-10.3 mbd and not 11.0 mbd.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
EIA projections in 2015 said Coal would still represent 40% of electricity production in 2022. It's now below 20%. Said renewables would represent 12%, now 20%. Today's projection predicts coal to remain near 20% through 2050, yet not a single coal plant has being built over the past decade in the US and the average age of coal plants today are 39 years of age.
If you look all the EIA predictions on energy you will quickly see that in two years time they are already off target and after 5 years, they become meaningless. With such a pension for error, one can be sure their most recent projects to also be way off the mark.