Economic growth is a key driver of the longer-term trends in energy consumption, and the High and Low Economic Growth cases explore future growth trajectories in the U.S. economy. These cases modify population growth and productivity assumptions throughout the projection period to yield higher or lower compound annual growth rates for U.S. GDP compared with the Reference case. The economic growth cases show the highest and lowest levels of projected energy consumption across cases. From 2021 to 2050, the High Economic Growth case assumes a U.S. GDP compound annual growth rate of 2.7%, the Low Economic Growth case assumes 1.8%, and the Reference case assumes 2.2%.
In the Reference case, we project the U.S. industrial sector’s energy consumption will grow more than twice as fast as any other end-use sector from 2021 to 2050. We expect industrial energy consumption in the United States to exceed pre-pandemic levels by 2022, although specific industries may remain below or take longer to return to pre-pandemic levels. For example, we do not project the glass and steel industries to return to 2019 levels of energy consumption by 2050. These industries were decreasing their energy use before the pandemic because shifts in their respective industrial production processes increased efficiencies. Moreover, U.S. steel production is more or less flat after 2025, further contributing to this industry’s declining energy consumption in the long term. We assume that most major energy-consuming industries will have declines in energy intensity (the amount of energy used to produce a unit of output) as a result of efficiency gains, which results in energy consumption growth that is slower than the growth in shipments.
The U.S. bulk chemicals industry is the largest industrial energy user throughout the projection period and consumes the most energy in the industrial sector as a whole. We project that through the mid-2020s, the bulk chemicals industry will build facilities that use natural gas and HGL feedstocks to produce chemicals such as nitrogenous fertilizer and ethylene. Some chemical products derive from heavier liquid petrochemicals (mainly naphtha), but feedstock use of heavy petrochemicals does not grow during the projection period. Growth in natural gas and HGL feedstock consumption slows after the first half of the 2020s as growth in the bulk chemicals industry shifts to secondary chemical production (that is, derivative chemicals produced from commodity chemicals, as opposed to HGLs or natural gas).
Housing stocks and commercial floorspace increase over the projection period and are key drivers of energy consumption in buildings. However, as a result of efficiency gains, delivered energy consumption in U.S. buildings1 grows at 0.3% per year, more slowly than housing stocks (0.8% per year) and commercial floorspace (1.0% per year) grow between 2021 and 2050 in the Reference case.
Between 2021 and 2050, U.S. housing stocks, led by growth in single-family homes, increase by 23% in the Reference case. Single-family homes consume more energy per square foot, on average, than multifamily or mobile homes. However, efficiency gains in new homes cause energy use to grow more slowly than the U.S. housing stock overall, continuing the long-term decline in residential energy intensity per square foot.
Similarly, the commercial building stock expands by more than one-third between 2021 and 2050. However, energy consumption in commercial buildings grows more slowly than commercial floorspace. Energy efficiency improvements enable buildings to meet growing demand for energy-consuming services without a one-for-one increase in energy use. We project the energy intensity of the commercial building stock to decline at an average rate of 0.6% per year from 2021 through 2050.
In our Reference case, we project that electricity consumption in U.S. residences will grow 22% between 2021 and 2050. Onsite generation, largely from solar photovoltaics (PV), reduces the amount of energy that must be delivered to buildings to meet energy demand. Energy consumption from onsite sources grows at an average annual rate of 6.1%. This growth occurs despite our expectation that PV system costs will decline more slowly than in the past. PV costs decline more slowly following near-term pandemic impacts and related supply constraints on materials needed to manufacture PV panels, as well as restrictions for certain PV panel imports, both of which have lasting effects through the projection period.
Natural gas consumption for space heating, which is the largest single contributor to both U.S. commercial and residential delivered energy consumption throughout the Reference case projection period, declines through 2050. We project that buildings will consume less energy for space heating as the United States experiences warmer winters and as the population increasingly migrates to warmer parts of the country, reducing the heating degree days we use to project space heating requirements.2
In the Reference case, energy consumption in the transportation sector nearly returns to the 2019 pre-pandemic level of 28.4 quadrillion British thermal units (quads) in 2025 before declining slowly through 2035. Energy consumption in the sector then rises through the remainder of the projection period to 29.9 quads. Motor gasoline, distillate fuel oil, and jet fuel account for more than 90% of the transportation sector’s energy consumption throughout the projection period. Electricity is the fastest-growing fuel used for transportation, growing from less than 0.5% of total consumption in 2019 to nearly 2% in 2050.
In the Reference case, on-road passenger light-duty vehicle (LDV) travel mainly uses motor gasoline as its energy source through 2050. LDV fuel economy and projected vehicle miles traveled (VMT) are key factors that determine the level of future gasoline consumption. New vehicle fuel economy improvements are driven by increasingly stringent fuel economy standards from the U.S. Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration through 2026, after which we assume that the standards remain constant and improvement in fuel economy slows. Passenger VMT grows steadily with population and income throughout the projection period, growing 26% higher in 2050 than it was in 2019. We project that the confluence of fuel economy improvement and increasing VMT results in gasoline consumption falling through 2038 and then rising for the remainder of the projection period.
Rising diesel consumption is largely a result of projected medium- and heavy-duty freight truck travel, which accounts for around 77% of consumption of diesel in the transportation sector throughout the projection period. Both the trend and its explanation are similar to that of gasoline. After fuel economy returns to pre-pandemic levels, we project that fuel economy increases for trucks, which generally reduces consumption through 2041. Slowing gains in fuel economy and rising freight truck travel demand gradually cause consumption to rise through 2050. After returning from its 2020 pandemic low, commercial jet fuel consumption continues to grow throughout the projection period as a result of growing income and population. We project that U.S. commercial aircraft will consume 4.2 quads of jet fuel in 2050, a 32% increase from 2019.
We project that different transportation modes, and as a result, different fuels, will return to pre-pandemic (2019) levels at different rates:
Improving efficiencies across all modes results in slower increases in consumption. Gasoline consumption does not reach its 2019 total during the projection period, diesel returns to its 2019 level in 2023, and commercial jet fuel returns to its 2019 level in 2027.
1Delivered energy excludes electricity-related losses. In addition, this measurement excludes onsite energy generated for use in a home or commercial building.
2Heating degree days are a measure of how far temperatures fall below a reference temperature, indicating demand for indoor heating. Reference case projections use a 30-year trend of historical population-weighted degree days from the National Oceanic and Atmospheric Administration (NOAA).
We expect industrial energy consumption in the United States to exceed pre-pandemic levels by 2022, although specific industries may remain below, or take longer to return to, pre-pandemic levels.