Energy forecast predicts U.S. will continue to be a net exporter of crude oil

The U.S. Energy Information Administration (EIA) recently issued its January edition of the Short-Term Energy Outlook (STEO), including for the first time energy forecasts for 2021.

EIA forecasts that the United States will continue to be a net exporter of total crude oil and petroleum products; renewable energy generation will grow from a 17% share of U.S. electricity generation in 2019 to 22% in 2021; and the energy-related carbon dioxide (CO2) emissions will decrease by 2.0% in 2020 and by 1.5% in 2021.

“While our energy production and exports continue to soar, we are simultaneously leading the world in reducing energy-related carbon emissions. Data released today by EIA projects the U.S. will continue this trend, predicting further CO2 emissions reductions in 2020 and 2021,” said Secretary of Energy Dan Brouillette.

Following are some other notes in the recent energy forecast.

• EIA forecasts Brent crude oil spot prices will average $65 per barrel (b) in 2020 and $68/b in 2021, compared with an average of $64/b in 2019. EIA expects West Texas Intermediate (WTI) crude oil prices will average about $5.50/b lower than Brent prices through 2020 and 2021, compared with an average WTI discount of about $7.35/b in 2019.

• U.S. dry natural gas production set a new record in 2019, averaging 92 billion cubic feet per day (Bcf/d). EIA forecasts dry natural gas production will rise to 94.7 Bcf/d in 2020 and then decline to 94.1 Bcf/d in 2021. Production in the Appalachian region drives the forecast as it shifts from growth in 2020 to declining production in 2021.

• EIA expects the share of U.S. total utility-scale electricity generation from natural gas-fired power plants will remain relatively steady; it was 37% in 2019, and EIA forecasts it will be 38% in 2020 and 37% in 2021.

• Electricity generation from renewable energy sources rises from a share of 17% last year to 19% in 2020 and 22% in 2021. The increase in the renewables share is the result of expected additions to wind and solar generating capacity.

• Coal’s forecast share of electricity generation decreasing from 24% in 2019 to 21% in both 2020 and 2021. The nuclear share of generation, which averaged slightly more than 20% in 2019, will be slightly less than 20% by 2021, consistent with upcoming reactor retirements.