Updated: Mar 22
The U.S. Energy Information Administration is the nation's source of energy information. EIA collects, analyzes, and disseminates independent and impartial energy information. Objectives include promoting sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment.
Energy market projections are subject to uncertainty. Many of the events that shape energy markets, e.g., future developments in technologies, demographics, and resources, are unpredictable.
The EIA has identified, categorized, and sorted issues among time frames and energy system elements. The data and assumptions required to quantify potential changes, formulate scenarios, and assess a range of outcomes are daunting.
Issues Affecting the Energy Sector
The COVID-19 pandemic has introduced new variables into the equation, including pandemic control measures e.g., lockdowns and how long they're going to last and possible resurgence. The pandemic's impact on economic recovery, both domestic and globally, is considered when projecting energy utilization. The effects of government stimulus and corporate-sector wage support influence investment patterns. The examination of the entire energy system reveals sector-and-activity-specific demand changes resulting from people's behavioral adaptations to the environment and the acceleration and deceleration of shifts in employment, travel, trade, and consumption of goods and services.
Market pricing, extending from short-run shocks and disruptions through medium-term equilibration and long-term implications, affect the energy sector. Watch as the changes to the U.S. energy import/export balance, including petroleum, other liquids, natural gas, electric power, and coal trade, affect energy supply and pricing. Developing global and U.S. liquefied natural gas (LNG) markets, production responses, capital investment, and production trends for upstream oil and natural gas firms influence energy supply and demand. Issues from changing refinery product demands and responses, electric power system operations, and shifts in timing and need levels all impact energy markets and rates. In this unprecedented time due to the pandemic, we see the effect on electric power generation decisions, unit additions, and retirements and the environmental implications for system inputs, outputs, and regulatory requirements.
The issues impacting the energy sector since the pandemic have notably expanded from those presented at the beginning of 2020. At that time, the U.S. energy consumption growth rate remained slower than GDP growth, so the energy intensity was projected to continue on its historical decline. Anticipation is that the electricity generation fuel mix will continue to experience a rapid rate of change. Still true today, and supported by policy, renewables are the fastest-growing source of electricity generation. Declining costs make them economically competitive beyond the expiration of existing federal and state policy support.
As generating plants retire through 2050, the slow load growth and increasing renewables electricity product will impact the U.S. coal-fired and nuclear electricity generation. Expectations are that the United States will produce high crude oil and natural gas levels making it a net energy exporter through 2050. This is due to production increases in crude oil, natural gas, and natural gas plant liquids, and low growth in U.S. energy consumption. The total U.S. energy-related carbon dioxide emissions are expected to fall. However, they will recommence with modest growth in the 2030s, driven by increases in transportation and the industrial sector energy demands. It is considered that they will remain approximately 4% below 2019 levels through 2050.
Due to the current COVID-19 environment, the energy system's issues acknowledge the uncertainty for the upcoming annual outlook.
U.S. Energy Information Administration, Trends and Expectations Surrounding the Outlook for Energy Markets, August 2020.
Dr. Linda Capuano, Administrator, U.S. Energy Information Administration, Annual Energy Outlook 2020.
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