What EIA Says About the "Incredible Transition" in Energy
Spoiler Alert: EIA doesn't foresee an energy transition
Overview
The Energy Administration Administration is the official agency under the Department of Energy that prepares energy data and analyses on behalf of the federal government. EIA has a history of being primarily unbiased politically and mostly sticks with its mission of being the official word on current and projected energy information and data.
EIA’s most recent report on energy production and use in the U.S., released July 1, 2022, shows that fossil fuels made up 79% of U.S. energy consumption in 2021, which consists of petroleum, coal, and natural gas. The remaining 21% is labeled non-fossil fuels, comprised of wind, biofuels, hydroelectricity, and all other renewables.
A few months ago, on March 3, 2022, EIA released its Annual Energy Outlook 2022, which projects energy production and consumption in the U.S. The report goes into great detail about its projections of the energy outlook to 2050. The top-line predictions were:
The use of “ petroleum and other liquids” continues to grow at an annual rate of +0.4%
The use of natural gas continues to grow at an annual rate of +0.4%
Coal usage declines slightly in the next few years and then levels off until 2050, declining by -0.1%, essentially flat.
Nuclear, hydro, and liquid biofuels will remain flat until 2050.
Renewables used to produce electricity grow annually at +2.4% until 2050.
To restate the obvious, EIA does not project a significant energy transition away from fossil fuels between now and 2050. Fossil fuels remain the majority of energy consumption for at least the next three decades, which is how far the EIA projects are.
EIA’s projections DO NOT show an “amazing energy transition,” President Biden is fond of referring to. His own Department of Energy does not support President Biden’s favorite talking points bout energy.
In-Depth Look
The EIA report released July 1, 2022, shows that fossil fuels, including petroleum, coal, and natural gas, made up 79% of U.S. energy consumption in 2021. The remaining 21%, labeled “non-fossil fuel share, " comprises wind, biofuels, hydroelectricity, and all other renewables. Their lead graphic depicts this data back to 1776, as shown in the graph below.
With so much current discussion focused on the “incredible energy transition” that President Biden is fond of referring to, I found it very interesting that the EIA decided to take this opportunity to provide a graph showing the transition from wood to coal over 100 years.
This depiction makes it easy to see the transition from wood to coal to natural gas and petroleum. The graph above shows that wood accounted for 100% of total energy consumption from 1776 but had declined to approximately 20% by 1900 and less than 10% by 1950. This was a natural energy transition in response to the shortage of wood that developed because of the demand for it to burn.
Notice that coal consumption had decreased until mid-1970 when it started increasing. Coal was slowly replaced by oil and natural gas until President Carter championed the “Fuel Use Act of 1978.” In promoting his Fuel Use Act of 1978, President Carter said that all of the natural gas in the U.S. had been discovered and therefore was too valuable to burn to generate electricity. So his Fuel Use Act contained incentives to burn coal instead of natural gas. So if you ever wondered why coal-fired electricity generating plants were so numerous, you can thank President Carter. This proliferation of coal-fired electricity generating plants lasted a few decades after President Obama declared war on coal. Funny how things change!
So what does the future of U.S. energy production and consumption look like? The EIA’s forecast for energy consumption in 2050 does not show an “amazing energy transition,” as shown in the graph below.
The EIA says that petroleum and natural gas will continue to grow for the next 28 years, with coal declining and nuclear, hydro, and liquid fuels remaining flat as they have for the last 30 years. The only change in the fuel mix by 2050 is that “other renewable energy” grows significantly. This means that the generation of electricity becomes more heavily dependent on renewables. Some critical assumptions behind this forecast include the belief that the ability to store the electricity generated by wind and solar will advance significantly. That assumption is not based on the reality that cost-effective large-scale battery storage has improved or become cost-effective in recent years.
The EIA’s report on projected energy use to 2050 shows little change in fossil fuel use other than the generation of electricity trends toward increased use of renewables. Unless grid-level electricity storage becomes more cost-effective, a greater reliance on renewables for electricity generation is not necessarily progress. The fact remains that electricity cannot replace the vast majority of the work that fossil fuels do in the world. Electricity is not a source of energy but rather a way to deliver energy. Electricity has many uses, but many industrial activities need higher heat than electricity can provide, and of course, natural gas and oil as feedstocks cannot be replaced by electricity.
The bottom line is that the U.S. Energy Information Administration, the official energy data and forecasting arm of the Department of Energy, confirms that fossil fuel consumption in the U.S. will not be replaced by renewables for at least three decades, if ever. The reason is simply that there are no currently existing replacements for fossil fuels.
The great energy transition is a figment of the current administration's imagination and the World Economic Forum. More on the WEF in a follow-up article.