Annual Energy Outlook 2022

(AEO2022)

For
Annual Energy Outlook 2022 Release at the Bipartisan Policy Center
March 3, 2022 | Washington, DC

By
Stephen Nalley, Acting EIA Administrator
Angelina LaRose, Assistant Administrator for Energy Analysis

U.S. Energy Information Administration Independent Statistics & Analysis www.eia.gov

AEO2022 Highlights
• Petroleum and natural gas remain the most-consumed sources of energy in
the United States through 2050, but renewable energy is the fastest growing

• Wind and solar incentives, along with falling technology costs, support robust
competition with natural gas for electricity generation, while the shares of coal
and nuclear power decrease in the U.S. electricity mix

• U.S. crude oil production reaches record highs, while natural gas production
is increasingly driven by natural gas exports

AEO2022 Press Release

March 3, 2022 2
AEO2022 examines a range of conditions from 2020 to 2050
Assumptions
•Current laws and regulations as of November 2021
•Current views on economic and demographic trends, and technology improvements
•Compound annual growth rate for real U.S. gross domestic product (GDP) is 2.2% (Reference case)
– High Economic Growth case (2.7%) and Low Economic Growth case (1.8%)

•The Brent crude oil price by 2050 is $90 per barrel (b) in constant 2021 dollars (Reference case)
– High Oil Price case ($170/b) and Low Oil Price case ($45/b)
•Oil and natural gas supply cases
– High: more accessible resources and lower extraction technology costs than the Reference case
– Low: fewer accessible resources and higher extraction technology costs than the Reference case
•Renewables cost cases
– High: no cost reductions in renewable technologies
– Low: renewables achieve 40% lower overnight capital costs by 2050 compared to Reference
case
AEO2022 Press Release
March 3, 2022 3
Changes in AEO2022: Pandemic and Legislation
U.S. gross domestic product assumptions
AEO2022 economic growth cases
• COVID-19 continues to be a trillion 2012 dollars

major source of uncertainty, $30

2021
history projections
especially in the near term.

• AEO2022 includes provisions $20

from the High Economic Growth
Bipartisan Infrastructure Law Reference
Low Economic Growth
$10

$0

AEO2022 Press Release

March 3, 2022 4
The U.S. Energy Information
Administration (EIA) collects, analyzes,
and disseminates independent and
impartial energy information to promote
sound policymaking, efficient markets, and
public understanding of energy and its
interaction with the economy and the
environment.

EIA’s role is unique — by providing an

unbiased view of energy markets, EIA
increases transparency and promotes
public understanding of important energy
issues.

EIA has expanded its program in recent

years to provide a growing customer base
with coverage of increasingly complex and
interrelated energy markets.

AEO2022 Press Release

March 3, 2022 5
AEO2022 core cases vary technical and macroeconomic assumptions
Policy assumptions
Current laws and regulations Potential
as of November 2021 new laws
High Economic Growth case
High Oil Price case
Higher High Oil and Gas Supply case
High Renewables Cost case

Technical and
macroeconomic Expected Reference case
assumptions
Low Economic Growth case
Lower Low Oil Price case
Low Oil and Gas Supply case
Low Renewables Cost case

AEO2022 Press Release

March 3, 2022 6
Upcoming AEO2022 Issue in Focus cases vary technical, macroeconomic,
and policy assumptions
• Alternative policies assumptions
– Carbon fee
– Sunset credits
– Extended credits
– No new pipelines

• Alternative technical and macroeconomic assumptions

– Alternative weather assumptions
– Use cases for battery storage

AEO2022 Press Release

March 3, 2022 7
AEO2022 Highlights
• Petroleum and natural gas remain the most-consumed sources of energy in
the United States through 2050, but renewable energy is the fastest growing

• Wind and solar incentives, along with falling technology costs, support robust
competition with natural gas for electricity generation, while the shares of coal
and nuclear power decrease in the U.S. electricity mix

• U.S. crude oil production reaches record highs, while natural gas production
is increasingly driven by natural gas exports

AEO2022 Press Release

March 3, 2022 8
Renewables consumption grows fastest but remains far below petroleum
and other liquids consumption in 2050
Energy consumption by fuel Energy consumption by sector
AEO2022 Reference case AEO2022 Reference case
quadrillion British thermal units quadrillion British thermal units
2021 2021
50 50 history projections
history projections
petroleum and electric power
40 other liquids 40
natural gas
30 transportation
30 coal industrial
other renew-
20 able energy
20
nuclear
10 10 residential
hydro commercial
liquid biofuels
0 0

Note: Biofuels are shown separately and included in petroleum and other liquids.

AEO2022 Press Release

March 3, 2022 9
 Petroleum and other liquids are largely consumed by sectors with slow
turnover to electric equipment
Petroleum and other liquids Light-duty vehicle sales by technology New vehicle sales of battery-powered
consumption by sector or fuel vehicles
AEO2022 Reference case AEO2022 Reference case AEO2022 Reference case
quadrillion British thermal units millions of vehicles millions of vehicles

2021 2021 2021

30 20 3
projections history projections history projections
other
electric
25 transportation
15 hybrid
total battery electric
plug-in 2 including 100-, 200-,
20 electric 300-mile electric vehicles
hybrid electric hybrid
15 10 battery
industrial 300-mile electric
electric
10 diesel 1
commercial plug-in electric hybrid
5 flex fuel
residential
5 gasoline 200-mile electric
electric power
100-mile electric
0 0 0

AEO2022 Press Release

March 3, 2022 10
Natural gas consumption rises mostly because of industrial use and
exports
Natural gas disposition and net exports Change in natural gas disposition and net exports
AEO2022 Reference case AEO2022 Reference case
trillion cubic feet relative to 2021 in trillion cubic feet
40 9
35
net exports
30 6
net exports
25 electric power
20 3 electric power
commercial
15 commercial transportation
residential industrial
10 transportation 0 residential
5
industrial
0 -3
2020 2030 2040 2050 2030 2040 2050

AEO2022 Press Release

March 3, 2022 11
Energy-related CO2 emissions by sector and fuel
Energy-related CO2 emissions by fuel Energy-related CO2 emissions by sector
AEO2022 Reference case AEO2022 Reference case
billion metric tons billion metric tons
2021 2021
3.0 history projections 3.0 history projections

2.5 petroleum
2.5
transportation
2.0 2.0

natural gas
1.5 1.5 industrial

1.0 1.0 electric power

coal residential
0.5 0.5
commercial
0.0 0.0

Note: Series does not include greenhouse gases other than CO2. Industrial sector CO2 emissions do not include process emissions, such as
the emissions from cement clinker production.

AEO2022 Press Release

March 3, 2022 12
AEO2022 Highlights
• Petroleum and natural gas remain the most-consumed sources of energy in
the United States through 2050, but renewable energy is the fastest growing

• Wind and solar incentives, along with falling technology costs, support robust
competition with natural gas for electricity generation, while the shares of coal
and nuclear power decrease in the U.S. electricity mix

• U.S. crude oil production reaches record highs, while natural gas production
is increasingly driven by natural gas exports

AEO2022 Press Release

March 3, 2022 13
The U.S. annual average electricity growth rate remains below 1% across
much of the projection period in the Reference case
U.S. electricity use growth rate, three-year rolling average U.S. electricity use by end-use sector
AEO2022 economic growth cases AEO2022 Reference case
percentage growth billion kilowatthours
2021
5% history projections 2,000
onsite
4% High 1,600 generation
Economic
3% Growth 1,200 purchased
Reference electricity
2% Low 800
Economic
1% Growth 400
0%
0
-1%

2021

2050

2021

2021
1990

2050

1990
2021

1990

2050

1990

2050
-2% residential industrial
commercial transportation

AEO2022 Press Release

March 3, 2022 14
Renewables consumption for electricity generation grows significantly
in all cases, even as it trades off with nuclear, coal, and natural gas
U.S. electricity generation
billion kilowatthours
Reference case Low Renewables Cost case High Renewables Cost case
2021 2021 2021
2,500 history projections 2,500 2,500 projections
projections

2,000 2,000 2,000

natural
gas
1,500 1,500 1,500

1,000 solar 1,000 1,000

wind
500
nuclear
coal
0 other
1111111111222222222222222222222222222222222222222222222222222renewables
9999999999000000000000000000000000000000000000000000000000000
9999999999000000000011111111112222222222333333333344444444445
0123456789012345678901234567890123456789012345678901234567890
Note: Other renewables category includes electricity generation from hydroelectric, geothermal, wood, and other biomass sources.
500 500
0 0
22222222222222222222222222222222222222222
00000000000000000000000000000000000000000
11111111112222222222333333333344444444445
01234567890123456789012345678901234567890
22222222222222222222222222222222222222222
00000000000000000000000000000000000000000
11111111112222222222333333333344444444445
01234567890123456789012345678901234567890

AEO2022 Press Release

15
March 3, 2022
 Significant renewables growth leads to additional battery storage
Hourly U.S. electricity generation and load by fuel for selected cases and years
billion kilowatthours

AEO2022 Reference case, 2021 AEO2022 Reference case, 2050 AEO2022 Low Renewables Cost case, 2050
300
load
250
load load
200
150
100
50
0
-50

hour of the day

curtailment battery storage pumped storage solar wind hydroelectric natural gas combined-cycle natural gas and oil peakers nuclear coal
Note: Negative generation represents charging of energy storage technologies such as pumped hydro and battery storage. Hourly dispatch estimates are
illustrative and are developed to determine curtailment and storage operations; final dispatch estimates are developed separately and may differ from total
utilization as this figure shows. Solar includes both utility-scale and end-use photovoltaic electricity generation.

AEO2022 Press Release

March 3, 2022 16
AEO2022 Highlights
• Petroleum and natural gas remain the most-consumed sources of energy in
the United States through 2050, but renewable energy is the fastest growing

• Wind and solar incentives, along with falling technology costs, support robust
competition with natural gas for electricity generation, while the shares of coal
and nuclear power decrease in the U.S. electricity mix

• U.S. crude oil production reaches record highs, while natural gas production
is increasingly driven by natural gas exports

AEO2022 Press Release

March 3, 2022 17
Production of U.S. crude oil rises early in the projection and remains
largely flat in the Reference case
U.S. crude oil production North Sea Brent crude oil price
AEO2022 Reference case and side cases AEO2022 side cases
million barrels per day 2021 dollars per barrel
2021
$200 2021
25 history projections history projections
High Oil Price High Oil Price
20
High Oil and
Gas Supply $150
Low Oil and
15 Reference Gas Supply
$100 Reference
10 Low Oil Price High Oil and
Low Oil and Gas Supply
Gas Supply Low Oil Price
5 $50

0
$0

AEO2022 Press Release

18
March 3, 2022
The United States remains a net exporter of total liquids and a net
importer of crude oil in the Reference case
Total petroleum and other liquids trade Crude oil trade
AEO2022 Reference case AEO2022 Reference case
million barrels per day million barrels per day
2021 2021
16 history projections 16 history projections
12 12
imports
imports
8 8

4 4
net imports net imports
0 0

0 10 013 016 019 022 025 028 031 034 037 040 043 046 049 010 014 018 022 026 030 034 038 042 046 050
-4
2 2 2 2 2 2 2 2 2 2 2 2 2 2 -4
2 2 2 2 2 2 2 2 2 exports
2 2

-8 exports -8

-12 -12

AEO2022 Press Release

March 3, 2022 19
U.S. natural gas production grows in most cases, but price and
technology assumptions play a central role
Dry natural gas production
AEO2022 side cases
trillion cubic feet
2021
60
history projections
50 High Oil and
Gas Supply
40 High Oil Price
Reference
30 Low Oil Price

20 Low Oil and

Gas Supply
10

AEO2022 Press Release

20
March 3, 2022
Natural gas and liquefied natural gas (LNG) trade reaches 8 trillion cubic
feet in the Reference case
U.S. natural gas trade, AEO2022 oil and natural gas supply cases
Reference case Low Oil and Gas Supply case High Oil and Gas Supply case
trillion cubic feet trillion cubic feet trillion cubic feet billion cubic feet per day

15 15 15 41.1

LNG exports
10 net exports 10 10 27.4

pipeline exports
5 to Mexico 5 5 13.7
pipeline exports
to Canada
0 pipeline imports
0 0 0.0
from Canada
LNG imports

-5 -5 -5 -13.7

AEO2022 Press Release

March 3, 2022 21
AEO2022 Highlights
• Petroleum and natural gas remain the most-consumed sources of energy in
the United States through 2050, but renewable energy is the fastest growing

• Wind and solar incentives, along with falling technology costs, support robust
competition with natural gas for electricity generation, while the shares of coal
and nuclear power decrease in the U.S. electricity mix

• U.S. crude oil production reaches record highs, while natural gas production
is increasingly driven by natural gas exports

AEO2022 Press Release

March 3, 2022 22
 View the full report at eia.gov/aeo
Contact us at AnnualEnergyOutlook@eia.gov

AEO2022 Press Release

March 3, 2022 23