EIA makes an astonishing forecast for 2050: U.S. will export more natural gas than it consumes
In its “Annual Energy Outlook 2023,” published March 16, 2023, the U.S. Energy Information Agency, or EIA, made an astonishing forecast. EIA said that U.S. exports of LNG by 2050 are projected to be “larger than any domestic end-use sector, including residential, commercial, industrial, and electric generation.” This is their “fast builds plus high LNG” case.
Given the history of U.S. natural gas production and worldwide plans for “net zero” by 2050, the fact that such a projection is even a possibility is an important statement by the EIA. After all, the outlook for U.S. energy has been mostly negative since Edwin Drake drilled the first oil well in 1859 in Titusville, Pennsylvania, until the “shale revolution” turned the outlook positive, but now the “net zero by 2050” forced energy transition says the U.S. should leave its substantial oil and gas reserves in the ground.
The notion that the United States was running out of crude oil and natural gas was popularized by a Shell Oil Company geologist and geophysicist, Marion King Hubbert, who, in the 1950s, developed the theory of “peak oil,” which suggested that U.S. petroleum production would peak between 1965 and 1970. He became famous when U.S. oil production peaked in 1970 and began declining. The graph below shows Hubbert’s projected bell-shaped projection versus actual oil production.
President Gerald Ford was the first U.S. president to incorporate the peak oil theory into U.S. energy policies. In 1975, supported and Congress passed the “Energy Policy and Conservation Act,” which made crude oil and natural gas exports in the United States illegal and created the Strategic Petroleum Reserve.
In 1977, Carter delivered his “Address to the Nation on National Energy Policy,” also known as the “Moral Equivalent of War” speech, offering dark predictions:
The oil and natural gas we rely on for 75 percent of our energy are running out.
Unless profound changes are made to lower oil consumption, we now believe that early in the 1980s, the world will be demanding more oil than it can produce.
World oil production can probably keep going up for another six or eight years. But some time in the 1980s it can’t go up much more. Demand will overtake production. We have no choice about that.
We can’t substantially increase our domestic production.
Within ten years, we would not be able to import enough oil—from any country, at any acceptable price.
If we fail to act soon, we will face an economic, social, and political crisis that will threaten our free institutions.
Carter also supported the “Power Plant and Industrial Fuel Use Act of 1978,” which stipulated that no new baseload electric power plant could be constructed without the capability to use coal or another fuel other than natural gas. This is why many coal-fired coal plants were built in the late 1970s and early 1980s.
Fast forward to 2007, when a company named Chenier Energy started building the Sabine Pass LNG import terminal in southern Louisiana because its founder was convinced that the U.S. was quickly running out of domestically produced natural gas and would need to import it. By the time the import terminal was completed in 2008, it was clear that the Shale Revolution had completely changed the energy outlook, as seen in the graph above when oil and gas production reversed course. The U.S. had so much natural gas that it needed to export, not import. So, in 2010, Chenier started constructing an LNG export facility next to the import facility. The LNG import facility is still there today but was never used. I saw it a few years ago when I took a group of students on a tour of Chenier.
In 2015, Congress approved a bill legalizing crude oil and natural gas exports. In 2019, the U.S. surpassed Saudi Arabia to become the world's largest producer of crude oil. In 2022, Northern Europe began experiencing an extended Dunkelflaute, which caused wind and solar power to fail; and then Russia invaded Ukraine, so Europe decided to stop importing Russian natural gas. As a result, the U.S. became the world’s largest LNG exporter during the first half of 2022 and vowed to fill the gap. Europe began building LNG export facilities, and the U.S. ramped up its construction of LNG export facilities.
So back to where this discussion started, on May 16, 2023, the U.S. Energy Information Administration projects that the U.S. will become the largest LNG exporter in the world, with the volume of U.S. exports exceeding the U.S. domestic market for natural gas.
So what does this projection say about “net zero by 2050”? It says that there will not be net zero carbon dioxide emissions by 2050. Instead of trying to hash out the question here, I asked Bing AI, “Will there be net zero emissions by 2050? The answer was:
Yes, it is possible to achieve net-zero emissions by 2050. According to the International Energy Agency (IEA), it is possible to achieve net-zero emissions by 2050 and limit warming to 1.5 C. But it will require a wholesale makeover of the world’s energy system starting today1. The number of countries announcing pledges to achieve net zero emissions over the coming decades continues to grow. But the pledges by governments to date – even if fully achieved – fall well short of what is required to bring global energy-related carbon dioxide emissions to net zero by 2050 and give the world an even chance of limiting the global temperature rise to 1.5 °C (emphasis added).
So Bing AI admits that the net zero emissions goal is not on track.
The EIA projection of the U.S. exporting large volumes of LNG in 2050 is more evidence that there will be no net zero carbon emissions by 2050. Instead, the world will still be consuming large volumes of natural gas and oil, and the U.S. will continue to be the world’s largest producer if our own energy policies don’t kill it.
It won’t be easy, and many political battles must be fought, but it is possible.