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EIA annual sees CO2 reduction through 2050
Renewable generating capacity grows in all regions; US to remain net exporter of petroleum products, natural gas, through 2050 Kristen Nelson Petroleum News
The U.S. Energy Information Administration has released its Annual Energy Outlook 2023, which covers through 2050.
In its March 16 press release the agency said projections in AEO2023 show that by 2030, energy-related CO2 emissions in the U.S. will drop by 25% to 38% below what they were in 2005, and by 2050, be 17% below the 2022 annual outlook reference case. EIA contributed that drop to effects of the Inflation Reduction Act, “energy technology costs and performance updates, a changed macroeconomic outlook, and other factors.”
EIA said the projected CO2 reductions are driven by increased electrification, high equipment efficiency and deployment of renewables in the electric sector, although the emissions reductions are limited by long-term growth in U.S. transportation and industrial activity.
“With policy changes over the last year and continued technology innovation, we expect to see significant shifts in energy production and use over the next 30 years,” said EIA Administrator Joe DeCarolis. “The resulting projections for energy-related CO2 emissions are most sensitive to our assumptions regarding economic growth and the cost of zero-carbon generation technology.”
In its highlights, EIA said all regions of the U.S. see growth in renewable generating capacity, “supported by growth in installed battery capacity.”
Petroleum products EIA said the U.S. will remain a net exporter of petroleum products and natural gas through 2050 in all the cases AEO2023 considered.
(In addition to its reference case, the AEO2023 looks at high and low oil price cases, high and low oil and gas supply cases, high and low zero-carbon technology cost cases, high and low economic growth cases and economic growth and zero-carbon technology cost combination cases.)
Key drivers for oil and gas are that international demand remains high, while domestic consumption grows slowly or decreases.
“In all cases, we project that the United States will remain a net exporter of petroleum products through 2050,” EIA said, with the most exports occurring in the high oil price case.
In the high oil price case, EIA said, U.S. crude oil imports decline but then increase starting in 2030 as domestic crude oil production changes. High oil prices initially push up domestic crude production, but “crude oil production begins to fall after 2030 because wells are drilled increasingly close to one another, resulting in well productivity decline,” with production falling and wells eventually becoming unprofitable.
Crude oil prices will be driven by global market balances, “primarily international supply and demand factors,” EIA said.
In the reference case, Brent oil reaches $101 per barrel, in 2022 dollars, by 2050.
In the high oil price case, Brent reaches $190 per barrel by 2050; in the low oil price case, Brent reaches $51 per barrel.
High and low supply cases Compared to the reference case, EIA said, the high oil and gas supply case assumes that for U.S. tight oil, tight gas or shale gas, ultimate recovery is 50% higher. “Similarly, this case assumes that undiscovered resources in Alaska and the offshore Lower 48 states are 50% greater than assumed in the Reference case.”
In the low oil and gas supply case the assumption is that “the estimated ultimate recovery per well for tight oil, tight gas, or shale gas in the United States; the undiscovered resources in Alaska and the offshore Lower 48 states; and rates of technological improvement are all 50% lower than assumed in the Reference case.”
Natural gas consumption Domestically, “electrification is displacing combustion fuels in the demand sectors,” EIA said. “As electricity generation shifts to using more renewable and battery sources, domestic natural gas consumption for electricity generation is likely to decrease by 2050 relative to 2022, which contrasts with relatively stable growth over the past decade.”
The industrial and electric power sectors consume more gas domestically than any other sectors, with consumption in those sectors sensitive to changes in the agency’s side cases. In the low oil and gas supply case, by 2050 natural gas consumption diverges by 14% in the low oil and gas supply case compared to the reference case, and by 18% in he high supply case.
“Natural gas consumption remains below the peak in 2022, at nearly 12 trillion cubic feet, through 2050” in most cases, EIA said.
U.S. natural gas production continues to grow if economic, supply and oil price assumptions are favorable, increasing by 15% from 2022 to 2050 in the reference case, with consumption dropping 6% from its 2022 peak, and domestic production outpacing domestic consumption in all cases except the low oil and gas supply case and the low oil price case.
EIA said that in some of the cases, “exports to satisfy growing international demand for natural gas encourage growth in domestic natural gas production,” with a significant portion of natural gas production growth due to LNG export demand, and international demand for LNG exports increasing production particularly in areas with better access to terminals.
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