EIA’s Annual Energy Outlook sees winds of change

The Annual Energy Outlook 2016 indicates that natural gas will lead U.S. production into 2040; clean electrical generation is expected to increase, however.

By Bob Vavra, Content Manager, CFE Media May 17, 2016

An early release of the Energy Information Administration (EIA) Annual Energy Outlook 2016 suggests an increase in the availability of more electricity through wind and solar generation through 2040 than in prior projections.

The EIA’s annual report, which will not be finalized until July, is based on two sets of projections—one that includes implementation of the Clean Power Plan (CPP) that was proposed by the Obama Administration in August 2015 and stayed by the U.S. Supreme Court in February 2016, and another case in which that rule is not implemented.

In either scenario, wind and solar energy generation will continue to increase through the 2020s, due to what an EIA press release said were, "The extensions of tax credits for these technologies enacted in December (2015) and lower estimates of their capital costs than in previous projections."

The Outlook’s projection for U.S. energy production shows that natural gas will continue to increase from just under 30 quadrillion Btus today to around 42 quadrillion Btus by 2040. Crude oil and condensate production also are projected to increase, but at a much slower rate.

On the consumption side, the EIA Outlook shows petroleum and other oil-based liquid to level off throughout the next 25 years while the consumption of natural gas and renewables will be on the increase. On both the production and consumption side, coal will continue to decline into 2040.

Still, the EIA’s projections are subject to the winds of change in Washington and elsewhere. "EIA’s approach to addressing the inherent uncertainty surrounding the country’s energy future is to develop multiple cases that reflect different sets of internally consistent assumptions about key sources of uncertainty such as future world oil prices, macroeconomic growth, energy resources, technology costs, and policies," said EIA administrator Adam Sieminski. "The energy sector has always been dynamic and undoubtedly will continue to change in the future. In creating the (Annual Energy Outlook), EIA has tried to make its projections as objective, reliable, and useful as possible."

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Original content can be found at Oil and Gas Engineering.