Energy prices in the U.S. will be flat this year as production of crude oil and natural gas will set records, again, according to projections by the Energy Information Administration (EIA) at the Department of Energy.
EIA forecasts Brent crude oil spot prices, the international benchmark, will average $65 per barrel in 2020, compared with an average of $64 in 2019. EIA expects West Texas Intermediate (WTI) crude oil prices will average about $5.50 per barrel lower than Brent prices through 2020, compared to about $7.35 in 2019.
U.S. regular gasoline retail prices averaged $2.60 per gallon in 2019, and EIA forecasts that they will average $2.63 in 2020.
EIA forecasts that Henry Hub natural gas spot prices will average $2.33 per million British thermal units (MMBtu) in 2020, down from $2.57 in 2019.
EIA expects domestic oil production to average 13.3 million barrels per day (bpd) in 2020, which is up from 12.2 million bpd in 2019 and 10.9 million bpd in 2018.
U.S. dry natural gas production set a new record in 2019, averaging 92.0 billion cubic feet per day (Bcf/d). EIA forecasts another record year in 2020 with production rising to 94.7 Bcf/d in 2020.
Natural gas will continue to generate the largest amount of electricity this year followed by coal and renewables. EIA expects natural gas-fired power plants to provide 38 percent of U.S. total utility-scale electricity generation in 2020. Electricity generation from renewable energy sources (wind, solar and hydroelectric) rises from a share of 17 percent last year to 19 percent in 2020. Coal’s forecast share of electricity generation falls from 24 percent in 2019 to 21 percent in 2020. The nuclear share of generation will remain at 20 percent in 2020.
As natural gas and renewable take over a larger portion of electricity generation, carbon dioxide (CO2) emission decline, EIA said. Last year energy-related carbon dioxide dropped 2.1 percent and EIA projects a 2 percent decline in 2020. Energy-related CO2 emissions are sensitive to changes in weather, economic growth, energy prices, and fuel mix, EIA said.
U.S. net imports of crude oil and petroleum product fell from an average of 2.3 million b/d in 2018 to an average of 0.5 million b/d in 2019, and EIA estimates the United States has exported more total crude oil and petroleum products than it has imported since September. EIA forecasts that the United States will be a net exporter of total crude oil and petroleum products by 0.8 million b/d in 2020 and by 1.4 million b/d in 2021.
EIA forecasts that U.S. coal production will total 597 million short tons (MMst) in 2020, down 93 MMst (14 percent) from 2019, as a result of declining domestic demand for coal in the electric power sector and lower demand for U.S. exports.
Alex Mills is the former President of the Texas Alliance of Energy Producers.