US industrial energy consumption to return to ’19 levels faster than other sectors – EIA

HOUSTON (ICIS)–US consumption of petroleum and other liquids from the industrial sector, primarily for use as feedstocks in the production of plastics, could return to pre-pandemic levels by 2023 in a best-case scenario, the Energy Information Administration (EIA) said on Wednesday.

In its 2021 Annual Energy Outlook, the EIA estimated total US energy consumption should return to 2019 levels by 2029.

Angelina LaRose, EIA assistant administrator for energy analysis, said the US industrial sector consumes more energy than any other end-use sector, and its energy use is projected to grow nearly twice as fast as any other sector between 2020 and 2050.

Looking at production, oil price will continue to be the primary driver of drilling activity, the EIA said, with the US continuing to be an important global provider of crude oil and natural gas.

Starting in 2023, oil and natural gas production in the reference case remains at historically high levels through 2050. The base case anticipates the Brent crude price at $95/bbl in 2050.

The EIA’s forecasts depend on the speed of economic growth, so projections are presented in base-, worst- and best-case scenarios.

Tight oil is primarily driving the growth in the oil production outlook, the EIA said, specifically from the Wolfcamp play in the Permian Basin and the Bakken play in the Williston Basin.

The EIA forecasts increased share of electricity production from renewables from 2020-2050 as the share of natural gas-fired generation remains relatively flat, and as the contribution from the coal and nuclear fleets drop by half.

Wind is expected to drive the increase through 2024, when the production tax credit is phased out.

Solar generation will lead the increase after wind as the EIA assumes solar receives a 30% investment tax credit (ITC) through 2023, which is then reduced to a permanent value of 10% in 2024 and forward.

Click here to view the ICIS Coronavirus, oil price crash – impact on chemicals topic page.