The EIA’s Short-Term Energy Outlook (STEO) through the month of October came out on November 14th.
Here are a number of bullet points:
– Renewable electricity generation percentage of overall generation is projected to reach 25% in 2025. Renewables accounted for 21% of overall electricity generation in 2022.
From other EIA sources and from this source, I know that coal, already significantly down from its high of over 50% of total electricity generation some two decades ago, is projected to retain a 15% share of the nation’s electricity needs in 2025.
– “We expect U.S. electric power sector generation to increase by 3% in 2024. The increase in generation is mostly to supply increased air-conditioning demand compared with last year, driven by hotter summer temperatures this year. The increase in consumption in 2024 is being supplied primarily from growth in the use of natural gas (up 3% from 2023) and solar power (up 34%). We forecast that U.S. solar power generation will continue growing by another 31% in 2025 as solar power capacity expands, while higher natural gas prices reduce electricity demand from the natural gas sector.”
– Overall U.S. CO2 emissions are projected to slightly drop in 2025, over 2024 emissions, which slightly dropped compared to 2023 emissions, which slightly dropped from 2022 emissions.
– U.S. LNG exports, non-existent in January 2016 because the first dedicated U.S. export facility came online early in 2016, should rise to 14 billion cubic feet per day. (I have previously commented on the fact that one new LNG export terminals is coming online now, and two more export terminals should become operational next year). The average daily volume of export capacity in 2024 is 12 billion cubic feet. It was 11 billion cubic feet per day on average in 2022.
– “We expect the Henry Hub natural gas spot price to rise in the coming months to average $2.80 per million British thermal units (MMBtu) in 1Q25, following seasonal patterns during which prices typically rise during the winter. The monthly average Henry Hub daily spot price fell to $2.20/MMBtu in October and below $2.00/MMBtu in early November. Low prices reflected warm temperatures, which could delay the beginning of withdrawals of natural gas from storage until mid-November. We expect the Henry Hub price to average to average around $2.90/MMBtu in 2025, as global demand for U.S. liquefied natural gas exports, a component of U.S. natural gas demand, continues to increase.”
– U.S. crude oil production is projected to continue its steady increase from 2022 to a new record high in 2025 of 13.5 million barrels per day, up from 2024’s record yearly average of 13.2 million barrels per day. Right now, the monthly average production per day is 13.4 million barrels.
As an aside, in January 2009, when President Bush left office, the U.S. was producing an average daily quantity of just over 5 million barrels of crude oil per day.
Then came to Shale Revolution from 2009 to 20015. At its growth peak during the Obama years, the U.S. averaged just under 10 million barrels per day for a month. At around this time, I paid $1.50 per gallon for gasoline, if only once.
The crude oil extraction level steadily rose during the Trump years to 12.9 million barrels per day for the month of January 2020.
By May 2020, due to pandemic-related economic turmoil, U.S. crude oil production had fallen to a monthly average of 9.7 million barrels of crude oil per day.
By January 2021, U.S. crude oil production had rebounded to an average of 11.2 million barrels per day. It has steadily, if slowly, increased ever since.
Make of this what you will.
Me? It is obvious that for the past four years the U.S. energy extraction industry has been drilling, Baby, drilling. It could have been drilling more, but American energy producers need to protect their profits.
If American energy extractors drill too much, profits drop, supply and demand being what it is. For example, at the onset of the pandemic in February 2020, American energy extractors had hired 790 active drilling rigs of all types. There were vertical oil drilling rigs and both oil and natural gas horizontal drilling rigs.
By August 2020, a mere six months later, only 250 active rigs of all types were in operation. International crude oil prices went negative for many American extractors, meaning that the price paid for crude oil dropped below extraction costs. Exploration for new sources of oil and natural gas virtually stopped.
This was the time that gasoline prices were at $2.00 per gallon. The gullible among us fell for the lie uttered by the professional lying class of one of our political parties; they became convinced that Trump had something to do with low gasoline prices. In reality, relatively few people all over the world were still buying gasoline.
The pandemic caused the low prices.
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