EIA projects that oil and gas will remain dominant in the US through 2050

Mar 21, 2022

Offshore Magazine | March 21st, 2022WASHINGTON, DC – In its Annual Energy Outlook 2022 (AEO2022) Reference case, the US Energy Information Administration (EIA) projects that US energy consumption will grow through 2050, primarily driven by population and economic growth.

In this case, the EIA says that renewable energy will be the fastest-growing energy source through 2050, but that petroleum will have the largest share of energy consumption throughout that period, followed by natural gas.

The EIA projects that transportation and industrial processes will be the primary consumers of petroleum and other liquids in the United States. It also projects that the consumption from the US industrial sector will grow more than twice as fast as any other end-use sector from 2021 to 2050. In the industrial sector, the greatest growth in demand for petroleum is for hydrocarbon gas liquids used as a feedstock. Petroleum remains a major fuel for nonmanufacturing industries such as agriculture, construction, and mining, as well as for refining processes.

The EIA also projects that US consumption of natural gas will keep growing, primarily driven by expectations that natural gas prices will remain low compared with historical levels. The US industrial sector will be the largest consumer of natural gas, primarily by the chemical industries that use natural gas as a feedstock and by increased heat-and-power consumption across multiple industries. The bulk chemicals industry will be the largest industrial energy user throughout the projection period, and it contributes the most to the growth in energy consumption in the industrial sector as a whole.

The EIA also projects that petroleum and other liquids (mainly motor gasoline and distillate fuel oil) will be the primary fuels consumed in the US transportation sector. Motor gasoline meets on-road passenger light-duty vehicle travel demand, while diesel consumption meets the projected increases in medium- and heavy-duty freight truck travel. As US travel demand continues to increase, consumption of petroleum and other liquids is expected to increase later in the projection period.