Latest EIA Predictions Should Be Taken With More Than A Pinch Of Salt
The U.S. government released its landmark Annual Energy Outlook on April 14, with some rather bold predictions about the future of oil and gas.
The EIA released the 2015 edition of its report at a Washington conferencehosted by the Center for Strategic and International Studies. Here are a few nuggets from the much-anticipated report:
• In its Reference Case, U.S. oil production continues to rise for the rest of the decade, keeping prices from spiking. As a result, the EIA thinks oil prices will stay below $80 per barrel through 2020.
• The U.S. becomes a net exporter of energy in 2019 as higher production combines with lower demand from improved vehicle efficiency
• Shale production peaks and begins to decline after 2020
• OPEC manages to offset falling U.S. production in the next decade with increases in output coming from several Middle Eastern countries
• The EIA is so confident about adequate supplies that it does not foresee oil prices surpassing $100 per barrel again until 2028
• Still, there is a lot of variation among the different scenarios. In its Low Oil Price case, Brent stays at $52 per barrel in 2015, but in its High Oil Price case, it surges to $122 this year
• Electricity from renewable energy increases by 72 percent between 2013 and 2040, with its share of the electricity market rising from 13 to 18 percent
Related: Off-Grid Solar Threatens Utilites In The Next Decade
These projections provide some markers for the road ahead, but the EIA is notoriously off the mark when it comes to accurately forecasting what comes next for energy markets. It routinely extrapolates current trends forwards, assuming very little will change.
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