US energy consumption will increase in various economic scenarios over the next 30 years as population and economic growth outpace improvements in energy efficiency, the US Energy Information Administration (EIA) said in its Annual Energy Outlook 2022 (AEO2022).
The AEO2022 Reference case includes baseline assumptions about technology, policy, and the economy through 2050. The Reference case projects a future in which slowing growth in consumption in an increasingly energy-efficient US economy contrasts with increasing energy supply because of technological progress in renewable sources and resource development of oil and natural gas.
The alternative cases explore a variety of assumptions regarding economic growth, commodity prices, resource availability, and technology costs compared with the Reference case. Other alternative cases will be released through the next year.
Petroleum and natural gas remain the most-consumed sources of energy in the US through 2050, but renewable energy is the fastest growing.
“We project that US energy consumption will continue to grow through 2050 as population and economic growth outpace energy efficiency gains. Petroleum and other liquids will remain the most-consumed category of fuels through 2050 in the AEO2022 Reference case. The transportation sector will consume the majority of these fuels, particularly motor gasoline, and diesel,” EIA said.
Nevertheless, in all of the AEO2022 cases, “production of renewable energy will grow more quickly than any other fuel source through 2050. Consumption of natural gas will continue to grow as well over this period, maintaining the second-largest share of all fuel sources, driven by expectations that natural gas prices will remain lower than historical levels.”
Wind and solar incentives, along with falling technology costs, support robust competition with natural gas for electricity generation while the shares of coal and nuclear power decrease in the US electricity mix.
“The share of generation from renewable energy sources, such as wind and solar, will rapidly increase over the next 30 years as state and federal policies continue to provide significant incentive to invest in renewable resources for electricity generation and transportation fuels. New technologies will continue to drive down the cost of wind and solar generators, further increasing their competitiveness in the electricity market, even as assumed policy effects lessen over time,” EIA said in the report.
US crude oil production will reach record highs, while natural gas production is increasingly driven by natural gas exports, EIA projects.
In the Reference case, EIA projects that US natural gas exports will rise through 2050, primarily driven by increases in LNG capacity, global natural gas consumption, and pipeline exports to Mexico and Canada.
From 2021 through 2050, EIA project that US crude oil exports will remain near their projected peak and that they will remain mostly the same in both gross terms and as a percentage of total domestic crude oil production.