Today, the U.S. Energy Information Administration (EIA) issued its January edition of the Short-Term Energy Outlook (STEO), including for the first time energy forecasts for 2021. Notably, EIA forecasts that the United States will continue to be a net exporter of total crude oil and petroleum products; renewable energy generation will grow from a 17% share of U.S. electricity generation in 2019 to 22% in 2021; and the energy-related carbon dioxide (CO2) emissions will decrease by 2.0% in 2020 and by 1.5% in 2021.
The U.S. Department of Energy (DOE) appreciates EIA’s insightful analysis, and is excited about the positive forecast for American energy in 2021. DOE will continue to pursue policies that unleash American energy and have made the U.S. more energy independent.
“From being a net exporter of oil, to growing our renewable generation, the Trump Administration has created an environment for growth and prosperity in American energy,” said Secretary of Energy Dan Brouillette. “While our energy production and exports continue to soar, we are simultaneously leading the world in reducing energy-related carbon emissions. Data released today by EIA projects the U.S. will continue this trend, predicting further CO2 emissions reductions in 2020 and 2021.”
Highlights from the EIA Short-Term Energy Outlook include:
This edition of the Short-Term Energy Outlook is the first to include forecasts for 2021.
EIA forecasts Brent crude oil spot prices will average $65 per barrel (b) in 2020 and $68/b in 2021, compared with an average of $64/b in 2019. EIA expects West Texas Intermediate (WTI) crude oil prices will average about $5.50/b lower than Brent prices through 2020 and 2021, compared with an average WTI discount of about $7.35/b in 2019.
Global liquid fuels inventories were mostly unchanged in 2019, and EIA expects they will grow by 0.3 million barrels per day (b/d) in 2020 and then decline by 0.2 million b/d in 2021.
U.S. regular gasoline retail prices averaged $2.60/gal in 2019, and EIA forecasts that they will average $2.63/gal in both 2020 and 2021.
EIA estimates that U.S. crude oil production averaged 12.2 million b/d in 2019, up 1.3 million b/d from 2018. EIA forecasts U.S. crude oil production will average 13.3 million b/d in 2020 and 13.7 million b/d in 2021. Most of the production growth in the forecast occurs in the Permian region of Texas and New Mexico.
U.S. net imports of crude oil and petroleum products fell from an average of 2.3 million b/d in 2018 to an average of 0.5 million b/d in 2019, and EIA estimates the United States has exported more total crude oil and petroleum products than it has imported since September. EIA forecasts that the United States will be a net exporter of total crude oil and petroleum products by 0.8 million b/d in 2020 and by 1.4 million b/d in 2021.
U.S. dry natural gas production set a new record in 2019, averaging 92.0 billion cubic feet per day (Bcf/d). EIA forecasts dry natural gas production will rise to 94.7 Bcf/d in 2020 and then decline to 94.1 Bcf/d in 2021. Production in the Appalachian region drives the forecast as it shifts from growth in 2020 to declining production in 2021.
EIA forecasts that Henry Hub natural gas spot prices will average $2.33 per million British thermal units (MMBtu) in 2020, down from $2.57/MMBtu in 2019. EIA expects that natural gas prices will then increase in 2021, reaching an annual average of $2.54/MMBtu.
EIA expects the share of U.S. total utility-scale electricity generation from natural gas-fired power plants will remain relatively steady; it was 37% in 2019, and EIA forecasts it will be 38% in 2020 and 37% in 2021. Electricity generation from renewable energy sources rises from a share of 17% last year to 19% in 2020 and 22% in 2021. The increase in the renewables share is the result of expected additions to wind and solar generating capacity. Coal’s forecast share of electricity generation decreasing from 24% in 2019 to 21% in both 2020 and 2021. The nuclear share of generation, which averaged slightly more than 20% in 2019, will be slightly less than 20% by 2021, consistent with upcoming reactor retirements.
After decreasing by 2.1% in 2019, EIA forecasts that energy-related CO2 emissions will decrease by 2.0% in 2020 and by 1.5% in 2021. Declining emissions reflect forecast declines in total U.S. energy consumption combined with assumptions of relatively normal weather. Energy-related CO2 emissions are sensitive to changes in weather, economic growth, energy prices, and fuel mix.
Find the full Short-Term Energy Outlook for January 2020 HERE.