U.S. energy use may not reach 2019 levels until 2050 — report

Source: By Carlos Anchondo, E&E News reporter • Posted: Thursday, February 4, 2021

The U.S. Energy Information Administration said yesterday it could take between three and 30 years for U.S. energy consumption to return to pre-pandemic levels.

The finding — part of the agency’s annual energy outlook — includes projections under three scenarios of economic growth. Under a reference or business-as-usual scenario, energy consumption levels that existed in 2019 could return in eight years. If there’s low economic growth, however, they may not return until midcentury, according to EIA.

This year’s report is filled with more uncertainty than previous analyses, EIA officials said, as the country continues to navigate through a pandemic that has left about 450,000 Americans dead.

Stephen Nalley, the acting EIA administrator, said that “small changes in the economy can significantly affect energy consumption,” as does the price of oil. In a projection that assumes high economic growth, the report said U.S. energy consumption would revert to 2019 levels by 2024.

Across four sectors — residential, commercial, transportation and industrial — energy demand fell 90% last year from 2019 levels, the outlook said.

On a webinar yesterday with the Bipartisan Policy Center, Angelina LaRose, EIA’s assistant administrator for energy analysis, said that in comparison with the 2008 financial crisis, “the COVID-19-related decline in total delivered energy demand is about 70% larger.”

According to the outlook, energy consumption in the industrial sector is expected to make the quickest rebound, growing nearly twice as fast as any other end-use sector between 2020 and 2050.

And petroleum is expected to remain the most consumed fuel in the United States through 2050, the report said.

“In the Reference Case, EIA assumes that current fuel economy standards stop requiring additional efficiency increases in 2026 for light-duty vehicles and in 2027 for heavy-duty vehicles,” the outlook said. “As travel continues to increase, consumption of petroleum and other liquids increases later in the projection period.”

However, in a “low oil price” case, where “oil prices are much lower than recent historical levels” over the past decade, U.S. crude oil production never gets back to pre-pandemic levels, EIA said.

Electricity and CO2

EIA added that electricity demand would return to 2019 levels by 2025, according to its reference scenario. But the agency said it does not expect long-term structural changes in electricity demand to stem from the pandemic. As generating capacity from coal and nuclear sources retires, new additions are projected to “come largely” from natural gas and renewable energy, the outlook said.

Of the capacity additions projected out to 2050, almost 60% are expected to come from renewable electricity.

“The large share is a result of declining capital costs but is also a result of increasing renewable portfolio standard (RPS) targets and tax credits,” the outlook said. “Although wind contributes to renewable electric generating capacity additions, it is on a much smaller scale compared with solar capacity, which builds steadily throughout the projection period.”

Additionally, energy-related carbon dioxide emissions in the United States are expected to drop between 2023 and 2035, the report said, as the country turns increasingly away from coal to renewables and natural gas.

Still, after 2035, emissions are projected to tick upward again, “reflecting the overall increase in the use of energy as a result of increasing population and economic growth.”

This year’s annual outlook is the first to assess the impact of the coronavirus pandemic. Last year’s outlook did not mention it, as it was released less than 10 days after the Centers for Disease Control and Prevention documented the first U.S. case of the disease (Greenwire, Jan. 29, 2020).