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Annual Energy Outlook 2022

Release Date: March 3, 2022 Next Release Date: March 16, 2023 AEO NarrativePDF
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Energy-related carbon dioxide (CO2) emissions dip through 2035 before climbing later in the projection years

Figure 2.

Figure 2

Vehicles and industrial processes are the main consumers of petroleum in the Reference case

Petroleum and other liquids remain the most-consumed fuels in the Reference case. In the United States, petroleum and other liquids, particularly motor gasoline and distillate fuel oil, are mostly consumed in transportation. In the Reference case, we assume that current fuel economy standards remain constant after 2026 for light-duty vehicles and after 2027 for heavy-duty vehicles. As travel continues to increase, consumption of petroleum and other liquids increases later in the projection period.

In the U.S. industrial sector through 2050, hydrocarbon gas liquids (HGLs) used as a feedstock drive most of the growth in demand for petroleum. Petroleum also remains a major fuel for refining processes and in nonmanufacturing industries (agriculture, construction, and mining).

Consumption of renewable energy increases steadily as natural gas maintains a large market share and coal continues a steady decline

In all cases, we project that renewable energy will be the fastest-growing U.S. energy source through 2050. Policies at the state and federal levels continue to provide incentives for significant investment in renewable resources for electricity generation and transportation fuels. New technologies continue to lower the cost to install wind and solar generation, further increasing their competitiveness in the electricity market, even as the policy effects we assume level out over time. Federal regulations continue to provide incentives for using biofuels, primarily ethanol, as energy during the projection period. However, relatively modest increases in demand for electricity and liquid fuels limit the projected growth of renewable energy in the Reference case.

We project that consumption of natural gas will keep growing as well, maintaining the second-largest market share overall. The expected growth in natural gas consumption is driven by expectations that natural gas prices will remain low compared with historical levels. In the Reference case, the industrial sector has the largest share of natural gas consumption, starting in the early 2020s, driven by greater use of natural gas as a feedstock in the chemical industries and by increased heat-and-power consumption across multiple industries.

Changes in fuel mix reduce energy-related CO2 emissions in the Reference case through 2037, despite steadily increasing energy consumption

Figure 3.

Figure 3

Changes over time in U.S. energy-related CO2 emissions in the Reference case reflect shifts in the quantity and CO2 intensity (CO2 per unit of energy) of fuel consumption. Emissions decrease from 2022 to 2037 because of a transition away from more carbon-intensive coal to less carbon-intensive natural gas and renewable energy for electricity generation and because of an overall decrease in energy intensity (energy consumption per unit of GDP). After 2037, CO2 emissions begin to trend upward as increasing energy consumption, resulting from population and economic growth, outpaces continuing reductions in energy intensity and CO2 intensity. This trend occurs in all AEO2022 side cases. The High Economic Growth case has the highest level of CO2 emissions over the projection period, and the Low Oil and Gas Supply case has the lowest. Even in the High Economic Growth case, annual energy-related CO2 emissions through 2050 remain below the 2007 peak of 6 billion metric tons.

Changes in fuel mix reduce energy-related CO2 emissions in the Reference case through 2037, despite steadily increasing energy consumption.