EIA Forecasts U.S. and Global Energy Cases, CO2 Emissions

According to projections by the U.S. Energy Information Administration (EIA), emissions of carbon dioxide (CO₂) in the United States from burning fossil fuels to generate energy will decrease during the early to mid-2020s but will then begin to increase all the way to 2050. The reason, says the EIA, is that “economic growth and increasing energy demand [will] outweigh improvements in [energy] efficiency.”

Globally, the EIA projects that CO₂ emissions from fossil fuel will grow at 0.6% per year between 2018 and 2050. Nations in the Organisation for Economic Co-operation and Development (OECD) will decrease their emissions slightly. (The 36 OECD countries are among the world’s most industrialized.) But this decrease will be offset by energy-related CO₂ emissions from non-OECD countries from which emissions are projected to grow at a rate of about 1% per year. Some of this increase will come from China, but the major increase in emissions will occur in India as the nation’s economy expands, says the EIA.

None of this is welcome news to those who agree with 97% of published climate scientists that it is “extremely likely” that human activity is the driving force behind climate change. According to the United Nations Intergovernmental Panel on Climate Change, limiting the rise in average global temperature to 1.5 degrees Celsius by 2050 will require a 45% decline in global net anthropogenic CO₂ emissions by 2030 and net zero CO₂ emissions by around 2050.

All this raises the question, What percentage of CO₂ emissions is generated by the combustion of fossil fuel for energy? A large percentage, answers the EIA.

“In 2017, CO₂ emissions from burning fossil fuels for energy were equal to about 76% of total U.S. anthropogenic [greenhouse gas] emissions (based on global warming potential) and about 93% of total U.S. anthropogenic CO₂ emissions,” says the EIA.

According to the EPA, globally, CO₂ from fossil fuel combustion and industrial processes accounts for about 65% of all greenhouse gas (GHG) emissions from human activities. This estimate is based on data from 2010. The use of fossil fuels has substantially increased since then, mainly in developing countries, and more recent estimates are that the share is about 73% of all worldwide GHG emissions.

Opposing Forces

The relationship between the generation of energy and CO₂ emissions is complex. In the United States, emissions from coal combustion are steadily falling as energy companies continue their shift to natural gas, which emits about 50% less CO₂. But with strong domestic economic growth, more natural gas is being consumed, and that is having an impact on emissions. For 2018, the EIA reported an overall 2.8% increase in energy-related CO₂ emissions, the largest increase since 2010.

Other actions result in lower emissions. Advances in energy efficiency improve carbon intensity (the amount of carbon emitted per unit of energy consumed). But, again, economic growth carries a larger demand for energy, which leads to additional emissions that sometimes cannot be neutralized by increased efficiency. While vehicle efficiency is improving, lower gasoline prices and a better economy result in more miles being driven, and once more, emissions go up. Renewable energy is an expanding sector. The cost of new wind and solar generation continues to drop, leading to more installations. By 2050, the EIA anticipates that renewables will constitute about one-third of U.S. energy generation. On a life cycle basis, renewables such as wind and solar account for a relatively small amount of CO₂ released into the atmosphere. But biomass constitutes about 12% of all renewable energy sources, and the combustion of biomass releases a large amount of CO₂ per unit of energy consumed even when compared with natural gas and coal.

EIA’s Reference Cases

Estimates of CO₂ emissions comprise the final chapters in two Energy Outlook reports the EIA issues annually. The first discusses the electricity generation mix in the United States through 2050. The second analyzes the long-term world energy markets also through 2050. The reports are not predictions; rather, they are projections derived from modeling of what may happen given certain assumptions and methodologies.

“Energy market projections are subject to much uncertainty because many of the events that shape energy markets—as well as future developments in technologies, demographics, and resources—cannot be foreseen with certainty,” says the EIA.

Accordingly, each report includes both a reference case and side cases that vary underlying assumptions. The reference case is the EIA’s best assessment of how U.S. and world energy markets will operate through 2050. Importantly, the reference case generally assumes that current laws and regulations that affect the energy sector, including laws that have end dates, are unchanged throughout the projection period. While it is possible that there will be no legal action affecting energy and CO₂ emissions domestically and internationally over the next 30 years, such a scenario is highly unlikely given the broad belief that anthropogenic GHGs are endangering life on earth to an increasing degree.

The two reports contain many projections covering all types of fuel and consumption in the industrial, transportation, and building sectors. Following is our selection of key points from the EIA’s references cases for both the United States and the world.

The United States

• Under the Annual Energy Outlook 2020 reference case, energy consumption in the U.S. economy grows more slowly than gross domestic product through 2050 as energy efficiency increases. A decline in energy intensity also continues through 2050. (Energy intensity is the amount of energy used in producing a given level of output or activity.)
• The electricity generation mix continues to experience a rapid rate of change, with renewables the fastest-growing source of generation through 2050 because of continuing declines in the capital costs for solar and wind that are supported by federal tax credits and higher state-level renewables targets. How long these high cost reduction rates can be sustained is uncertain.
• S. crude oil production reaches 14.0 million barrels per day (b/d) by 2022 and remains near this level through 2045. (The EIA’s latest crude oil production figure is 12,879 b/d for November 2019.)
• Natural gas plant liquids (NGPL) production reaches 6.6 million b/d by 2028. (NGPL production reached 5 million b/d in 2018.)
• Biofuels blended into gasoline, diesel, and jet fuel increase from 7.3% in 2019 to peak at 9.0% in 2040.
• Relatively low U.S. natural gas prices lead to continued growth in natural gas consumption in the near term. The industrial sector consumes more natural gas than any other sector in the United States after 2021. U.S. delivered energy consumption in the industrial sector grows 36% from 26 quadrillion British thermal units (Btu) to 36 quadrillion Btu during the projection period.
• Major natural gas consumers in the industrial sector include the chemical industry, manufacturing heat and power, and lease and plant fuel. Energy consumption in the bulk chemicals industry, including heat and power and feedstocks, accounts for about 35% of total U.S. industrial energy consumption by the end of the projection period.
• Although near-term electricity demand may fluctuate as a result of year-to-year changes in weather, trends in long-term demand tend to be driven by economic growth offset by increases in energy efficiency. The annual growth in electricity demand averages about 1% from 2019 to 2050.
• Because of declining capital costs and higher renewable portfolio standards (RPS) targets in some states, the relatively sharp growth in renewables seen during the past 10 years will continue through the projection period. Total renewable generation exceeds natural gas-fired generation after 2045.
• Residential solar photovoltaic capacity increases by an average of 6.1% per year through 2050.
• Although coal-fired and nuclear generation declines through the mid-2020s as a result of retirements, generation from these sources stabilizes over the longer term as the more economically viable plants remain in service.
• Most electric generation capacity retirements occur by 2025. Although the final schedule will depend upon state-level implementation plans, the EIA assumes that coal-fired plants must either invest in heat rate improvement technologies by 2025 or retire to comply with the EPA’s Affordable Clean Energy Rule.
• In the iron and steel industry, coal remains the primary fuel.
• A 19% decline in nuclear electric generating capacity is projected, from 98 gigawatts (GW) in 2019 to 79 GW in 2050. No new plant additions occur beyond 2022.
• The United States adds 117 GW of new wind and solar capacity between 2020 and 2023, the result of tax credits, increasing state RPS targets and declining capital costs. New wind capacity additions continue at much lower levels after production tax credits expire in the early 2020s, but the growth in solar capacity continues through 2050. (Again, the reference case only assumes that tax credits will not be extended.)
• Energy intensity in the U.S. industrial sector declines by 0.4% per year on average through 2050. In manufacturing, energy intensity declines 0.5% per year through the projection period because of increased energy efficiency.
• Energy-related CO₂ emissions decrease early in the projection period before increasing in the later years through 2050 as economic growth and increasing energy demand outweigh improvements in efficiency.

The World

• In the EIA’s International Energy Outlook 2019, the combined gross domestic product in non-OECD countries grows by 3.8% per year between 2018 and 2050, compared with 1.5% per year in OECD countries. India, China, and other countries in Asia and Africa grow at an average rate of nearly 4% or higher.
• More than half the projected increase in global energy consumption occurs in non-OECD Asian countries, particularly in China and India.
• The industrial sector, which includes refining, mining, manufacturing, agriculture, and construction, accounts for more than 50% of end-use energy consumption during the entire projection period.
• Coal use declines until the 2030s, but by the 2040s, coal use increases because of increased industrial usage. Coal continues to be an important end-use fuel in industrial processes, including the production of cement and steel.
• Renewables (including hydropower) are the fastest-growing source of electricity generation during the period from 2018 to 2050, rising by an average of 3.6% per year.
• Worldwide renewable energy consumption increases by 3% per year between 2018 and 2050. Among industrial fuels, renewables have the highest growth rate among non-OECD countries at 1.7% per year, but they represent only 10% of industrial energy consumption by 2050.
• India’s share of global energy-intensive manufacturing increases from 11% in 2018 to 25% in 2050. India’s 31 quadrillion Btu growth in energy consumption from 2018 to 2050 represents 40% of the total world increase of 78 quadrillion Btu. India’s coal consumption grows by an average of 3.1% per year.
• By 2030, India’s liquids-related CO₂ emissions exceed those in OECD Asia and non-OECD Europe and Eurasia; by 2050, they approach those of OECD Europe.
• Growth in India’s steel and cement sectors makes India the country with the highest industrial coal growth rate in the world.
• In 2018, China accounted for more than 60% of the world’s industrial coal consumption. This share falls to a little more than 40% in 2050 because of consumption growth in other countries and China’s policies to reduce coal use in the industrial sector.
• Carbon intensity continues to decline largely as a result of China and other countries shifting away from coal.
• In the near term, energy-related CO₂ emissions growth is slowed by increases in energy efficiency and a gradual shift from coal toward natural gas and renewable energy sources. In the longer term, broad population and economic growth leads to increased emissions.
• The decline in China’s coal-related CO₂ emissions is more than offset by growth in India’s coal-related emissions. India has significant coal resources.

As noted, the above projections are almost entirely derived from the EIA’s reference cases. Many other possible outcomes are discussed in the two documents based on the EIA’s “side cases.”