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Short-Term Energy Outlook

Release Date: May 12, 2020  |  Next Release Date: June 9, 2020  |  Full Report    |   Text Only   |   All Tables   |   All Figures

U.S. Economic Assumptions and Energy-Related Carbon Dioxide Emissions

Recent Economic Indicators. The STEO is based on macroeconomic projections by Oxford Economics (for countries other than the United States) and by IHS Markit (for the United States). Given the tremendous uncertainty in both the spread and severity of COVID-19 and in the efforts to stop the spread of the virus, these forecasts are significantly more uncertain than normal.

The April version of the Oxford forecast used in this STEO represents a significant downward revision from the previous month, reflecting a greater understanding of the severity of the virus and the effects of the travel restrictions and stay-at-home orders. Using the Oxford data, EIA assumes that global oil-consumption weighted GDP will contract by 2.8% in the first quarter of 2020 and by 4.5% in the second quarter (quarter-over-quarter growth rates). With the assumption that most lockdowns are lifted sometime during the second quarter, growth returns in the second half of 2020, leading to an overall year-over-year growth rate for oil consumption-weighted GDP in 2020 of -4.1%. The recovery continues in 2021, leading to a 6.7% growth rate.

For the United States, EIA used the April 2, 2020 release of the IHS Markit U.S. Short-Term Macroeconomic model with EIA’s energy prices. Since the release of the April STEO, the near-term outlook for GDP has significantly declined as policies to slow the spread of COVID-19 remain in place. U.S. real GDP in the May STEO is forecasted to decline by 7.5% in the second quarter of 2020 (quarter-over-quarter) as compared with a 3.5% decline forecast in the April STEO. Year-over-year, the decline in 2020 for the May STEO is 5.4% as compared to the 2.0% decline forecasted in the April STEO. As in the April STEO, the economy is forecasted to return to growth in the fourth quarter of 2020. Employment does not return to pre-pandemic levels by the end of the STEO forecast period.

Energy-Related Carbon Dioxide Emissions. After decreasing by 2.8% in 2019, EIA forecasts that U.S. energy-related carbon dioxide (CO2) emissions will decrease by 11% (572 million metric tons) in 2020. This record decline is the result of restrictions on business and travel activity and slowing economic growth related to COVID-19. CO2 emissions decline from all fossil fuels, particularly coal (23%) and petroleum (11%). In 2021, EIA forecasts that energy-related CO2 emissions will increase by 5% as the economy recovers and stay-at-home orders are lifted. Energy-related CO2 emissions are sensitive to changes in weather, economic growth, energy prices, and fuel mix.

U.S. carbon dioxide emissions growth

Macroeconomics & CO2 Emissions Summary
  2018201920202021
aIncludes electric power sector use of geothermal energy and non-biomass waste
Primary Assumptions (percent change from previous year)
Real DIsposable Personal Income 4.02.93.01.2
Manufacturing Production Index 2.70.0-14.70.8
Cooling Degree Days 11.0-5.3-3.6-2.2
Heating Degree Days 11.80.7-8.24.9
Number of Households 0.81.00.60.9
Carbon Dioxide Emissions by Fuel (million metric tons)
Petroleum and Other Liquid Fuels 2,3742,3542,0852,260
Natural Gas 1,6361,6891,6281,573
Coal 1,2601,076832917
Total Energya 5,2815,1304,5564,761

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Related Figures
U.S. carbon dioxide emissions growth XLSX PNG
U.S. annual energy expenditures share of gross domestic product XLSX PNG