U.S. Oil and Natural Gas Use to Rise Despite Growth of Renewables: EIA

Oil and natural gas will remain the dominant sources of energy in the U.S. through 2050, according to the Energy Information Administration’s 2022 annual energy outlook released on March 3. U.S. petroleum consumption is expected to grow by 0.5 percent per year to 22.3 million barrels per day by 2050 and domestic gas consumption by 0.4 percent per year over that same period to 93 billion cubic feet per day. Also, U.S. net exports of natural gas are projected to grow by 2.5 percent per year to 23 billion cubic feet per day by 2050.

Oil and gas are expected to retain their positions as the largest two energy sources in the U.S. over the next three decades, even with renewable power increasing by nearly 150 percent by 2050, according to the outlook. However, gas consumption will grow more slowly than in the agency’s previous forecast published in February 2021, as the deployment of renewables continues to surge in response to falling prices and policy support from governments at both the federal and state levels. Energy-related carbon dioxide (CO2) emissions dip through 2035 before climbing later in the projection years.

In the electricity sector, the U.S. is expected to derive nearly 40 percent of its power from wind, solar and hydroelectric by 2050, up from 23 percent currently. Coal’s power generating market share will decline to 11 percent by 2050, down from 23 percent today, according to the baseline scenario. Currently, renewables such as solar, wind, and biomass power account for around 8 percent of total U.S. energy consumption. The EIA projects that renewables’ share of the total will double to 16 percent by 2050.

Another factor that will encourage renewable deployment will be the increased use of battery storage in the U.S. electricity sector, which will enable solar power to displace generation from other fuel sources, notably gas. By 2050, the EIA predicts that solar energy will represent 22 percent of total U.S. generation—more than five times its 4 percent share in 2020—with gas-fired generation seeing its share of the power market declining slightly from 37 percent currently to 34 percent over the same period.

The agency predicts a significant jump in the adoption of electric vehicles, with fossil-fueled cars and passenger trucks’ share of U.S. light-duty vehicle sales falling from 97 percent last year to 79 percent in 2050. Transportation is expected to be the sector with the highest electricity demand through the forecast period, although the EIA projects that transportation will still account for just 3 percent of all power demand in the economy in 2050.

Meanwhile, the EIA expects market share for increasingly uneconomic coal and nuclear power to continue declining for the rest of this decade, with both fuels largely flat after 2030, as utilities decommission those relatively costly generation sources in favor of cheaper wind and solar.