Last year and even earlier this year, there were some predictions that 2022 would be the year of peak oil and use of fossil fuels would start a permanent decline from 2023 forward. Earlier this month, the US Energy Information Administration (EIA) issued its Short Term Energy Outlook which threw some water on previous oil forecasts:
- Crude oil prices. …Crude oil prices have increased since June, primarily because of extended voluntary cuts to Saudi Arabia’s crude oil production and increasing global demand… Rising global oil production in 2024 in our forecast keeps pace with oil demand…
- Global oil production. We forecast global liquid fuels production will increase by 1.4 million barrels per day (b/d) in 2023… In 2024, global production increases by 1.7 million b/d, with 1.2 million b/d coming from non-OPEC countries.
- U.S. crude oil production. …we expect U.S. crude oil production will average 12.8 million b/d in 2023 and 13.1 million b/d in 2024, both annual records.
- Natural gas production. … We expect production to average about 104 billion cubic feet per day (Bcf/d) through the end of 2024, compared with 103 Bcf/d in 2Q23.
- Electricity generation. Hot temperatures in July, especially in the southern states, pushed U.S. electricity demand to near-record levels. We estimate that electricity sales totaled 388 billion kilowatthours in July, roughly equal to the record electricity consumption in July and August 2022.
- U.S. economy. U.S. GDP growth in our forecast increases by 1.9% in 2023, up from 1.5% in last month’s forecast. We apply energy price forecasts to the S&P Global macroeconomic model to generate the forecasts for the U.S. economy used in our STEO.
If you were expecting 2022 or 2023 to be the beginning of the end of fossil fuels, that may not bear out – especially as the US economy improves (in contrast to how many companies are acting as layoffs spread) and summer energy demand is booming due to the intense heat most of the nation is battling.
