By Stephen D. Eule
Well, it’s that time of year again when the U.S. Energy Information Administration (EIA) gets out its crystal ball and peers into the future. Its latest Annual Energy Outlook 2017 (Early Release) provides a detailed look at where the agency thinks energy markets in the United States are headed out to 2050.
Forecasting is a tricky business, and while EIA does a great job, there are too many variables over time for any forecast this far out to be accurate. So, if you’re looking for certainty, it doesn’t exist. But if you’re looking for insights into how current trends might play out, this is the place.
Before we get into the highlights, EIA—as it has for the past few years—has run two “Reference” cases—one that includes the Obama Administration’s Clean Power Plan (CPP) and one that does not. Because the Supreme Court put CPP on hold and the Trump Administration has plans to withdraw the rule, we will present the top-line results of the “No CPP” Reference case.
- Energy Production: Domestic energy output is expected to increase 24% from 2017 to 2050. Every energy category except nuclear sees its production increase. The faster rates of increase are for total renewables (1.3% annually) and natural gas (1.2% annually).
- Natural Gas Production: Output of natural gas rises a whopping 42% between 2017 and 2050, from 27.9 to 39.7 trillion cubic feet.
- Crude Oil Production: It’s anticipated that U.S. output of crude oil will increase from about 8.7 million barrels per in in 2017, peaking around 10.5 million per day in the late 2020s before slipping to a still healthy 9.9 million barrels per day in 2050.
- Coal Production: Without the drag of CPP, coal production increases on average 0.4% per year and is nearly 13% higher in 2050.
- Energy Imports: Net imports of energy (i.e., imports – exports) drop 80%, going from about 11% of total demand in 2017 to about 2% of demand in 2050. Indeed, EIA projects that from 2026 to 2045, the United States will be a net exporter of energy, some almost impossible to conceive of before the shale revolution.
- Energy Demand: U.S. energy demand will increase an average of about 0.4% per year and in 2050 will be 13% higher than in 2017.
- Electricity Demand: Given the long-term trend increased electrification and the growing demand for chargeable electronic devices of nearly every description, it’s no surprise that electricity demand grows at a slightly faster pace of 0.5% a year, rising nearly 18% in 2050 compared to 2017.
- Renewables Demand: By 2050, renewables—including hydropower, biomass, wind, solar, and other renewables—are projected to account for 15% of total demand in 2050 from 10% in 2017. Most of this rise in demand share is due to the rapid growth in wind and solar.
- Electricity Prices: Average electricity prices in 2050 are anticipated to grow from 10.3 to 11.0 cents per kilowatt-hour between 2017 and 2050, and 6.5% increase (which compared favorably to the 12% increase we see in the Reference case that includes the CPP, an indication of how costly this rule would be to consumers).
- Oil Prices: Oil prices are projected to increase significantly between 2017 and 2050. EIA forecasts that by 2050 the price of a gallon of gasoline will rise 48% to $3.41 and the price of a gallon of home heating oil will rise 58% to $4.03.