EIA forecasts less power generation from natural gas as a result of rising fuel costs
In its latest Short-Term Energy Outlook (STEO), released on January 12, the U.S. Energy Information Administration (EIA) forecasts that generation from natural gas-fired power plants in the U.S. electric power sector will decline by about 8% in 2021. This decline would be the first annual decline in natural gas-fired generation since 2017. Forecast generation from coal-fired power plants will increase by 14% in 2021, after declining by 20% in 2020. EIA forecasts that generation from nonhydropower renewable energy sources, such as solar and wind, will grow by 18% in 2021—the fastest annual growth rate since 2010.
Fossil fuel production expected to increase through 2022 but remain below 2019 peak
In 2020, fossil fuel production in the United States declined by an estimated 6% from the 2019 record high of 81.3 quadrillion British thermal units (Btu). Based on forecasts in the U.S. Energy Information Administration’s (EIA) January 2021 Short-Term Energy Outlook (STEO), EIA expects total production of fossil fuels in the United States to remain flat in 2021 as increased coal production offsets declines in natural gas production. EIA expects production of all fossil fuels—crude oil, coal, dry natural gas, and natural gas plant liquids (NGPL)—to increase in 2022, but forecast fossil fuel production will remain lower than the 2019 peak.
U.S. oil and natural gas production to fall in 2021, then rise in 2022
In its January 2020 Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration (EIA) forecasts that annual U.S. crude oil production will average 11.1 million b/d in 2021, down 0.2 million b/d from 2020 as result of a decline in drilling activity related to low oil prices. A production decline in 2021 would mark the second consecutive year of production declines. Responses to the COVID-19 pandemic led to supply and demand disruptions. EIA expects crude oil production to increase in 2022 by 0.4 million b/d because of increased drilling as prices remain at or near $50 per barrel (b).
EIA expects higher wholesale U.S. natural gas prices in 2021 and 2022
In its January 2021 Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration (EIA) forecasts that the annual natural gas spot price at the Henry Hub will rise 98¢ per million British thermal units (MMBtu) to average $3.01/MMBtu in 2021. EIA expects higher natural gas prices will prompt dry natural gas production to increase in the second half of 2021, after reaching a monthly low of 87.3 billion cubic feet per day (Bcf/d) in March 2021. On an annual basis, EIA forecasts that dry natural gas production will decline from an average of 90.8 Bcf/d in 2020 to 88.2 Bcf/d in 2021. Since early 2020, natural gas production has fallen amid low natural gas and crude oil prices.
Nuclear and coal will account for majority of U.S. generating capacity retirements in 2021
According to the U.S. Energy Information Administration’s (EIA) latest inventory of electric generators, 9.1 gigawatts (GW) of electric generating capacity is scheduled to retire in 2021. Nuclear generating capacity will account for the largest share of total capacity retirements (56%), followed by coal (30%).
Tags: coal, electricity, natural gas, nuclear, generating capacity, renewables, retirements, wind, solar, map
Renewables account for most new U.S. electricity generating capacity in 2021
According to the U.S. Energy Information Administration’s (EIA) latest inventory of electricity generators, developers and power plant owners plan for 39.7 gigawatts (GW) of new electricity generating capacity to start commercial operation in 2021. Solar will account for the largest share of new capacity at 39%, followed by wind at 31%. About 3% of the new capacity will come from the new nuclear reactor at the Vogtle power plant in Georgia.
Tags: coal, electricity, natural gas, nuclear, generating capacity, renewables, retirements, wind, solar, map
Wholesale U.S. electricity prices were generally lower and less volatile in 2020 than 2019
During 2020, wholesale electricity prices at major trading hubs in the United States were generally lower than in 2019, although prices in the western states trended higher in the last half of the year. Compared with 2019 prices, these wholesale hub prices in 2020 ranged from 5% lower in the California Independent System Operator (CAISO) market to 45% lower in the Electric Reliability Council of Texas (ERCOT) market. Monthly wholesale electricity prices were also generally less volatile in 2020 than in 2019.
Tags: prices, electricity, wholesale prices
In 2020, U.S. natural gas prices were the lowest in decades
In 2020, natural gas spot prices at the national benchmark Henry Hub in Louisiana averaged $2.05 per million British thermal units (MMBtu), the lowest annual average price in decades. Prices started the year relatively low because mild winter weather led to less natural gas demand for space heating. Prices remained low as economic effects induced by the COVID-19 pandemic reduced both natural gas production and consumption.
Tags: prices, natural gas
U.S. average gasoline prices and vehicle travel fell to multiyear lows in 2020
U.S. regular retail gasoline prices averaged $2.17 per gallon (gal) in 2020, 44 cents/gal (17%) lower than in 2019 and the lowest annual average since 2016. Gasoline prices at the beginning of the year were more than $2.50/gal; however, responses to the COVID-19 pandemic resulted in widespread reductions in passenger travel and gasoline demand, contributing to lower gasoline prices across the United States.
Tags: prices, gasoline, liquid fuels
Crude oil prices briefly traded below $0 in spring 2020 but have since been mostly flat
Note: Prices reflect front-month (contract with the earliest delivery date) futures prices.
In the first half of 2020, responses to the COVID-19 pandemic led to steep declines in global petroleum demand and to volatile crude oil markets. The second half of the year was characterized by relatively stable prices as demand began to recover. As petroleum demand fell and U.S. crude oil inventories increased, West Texas Intermediate (WTI) crude oil traded at negative prices on April 20, the first time the price for the WTI futures contract fell to less than zero since trading began in 1983. The next day, Brent crude oil, another global crude oil price benchmark, fell to $9.12 per barrel (b), its lowest daily price in decades.
Tags: prices, liquid fuels, crude oil, oil/petroleum