US gasoline consumption could peak as soon as 2022
US crude output could rise through much of 2030s
In low oil price scenario, US crude volumes peaked pre-pandemic
Houston — US gasoline consumption will peak by 2023 in the aftermath of the coronavirus pandemic as increased fuel efficiency and electric vehicle sales take hold, but domestic crude oil production will keep rising to a record high of about 13.9 million b/d in 2034 before slowly falling, according to the reference case presented Feb. 3 in the Energy Information Administration's Annual Energy Outlook.
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Register NowOverall US energy consumption is not expected to rebound to 2019 levels until 2029 as more people continue to work from home, buildings become more energy efficient, and the electric grid relies increasingly on renewable energy sources, the EIA said. But oil production and consumption will bounce back much more quickly, and the industry will lean heavily on crude exports.
Amid the ongoing pandemic though, the EIA emphasized that its near-term projections are more uncertain than usual and subject to change.
Gasoline will still remain the primary transportation fuel in the US through 2050, but its consumption is on the verge of peaking in either 2022 or 2023, the EIA projects.
"After pandemic response-related demand losses in 2020, consumption of motor gasoline in transportation peaks in about 2023 as fuel economy improvements partially offset travel growth," the report concluded. "Motor gasoline use slowly trends lower thereafter as a result of further fuel economy improvements in new LDVs (light-duty vehicles) relative to travel growth, as well as increasing sales of energy-efficient, alternative-fueled vehicles that further displace motor gasoline use."
This report does not account for recent industry announcements, including General Motors saying it will only manufacture non-emissions vehicles by 2035.
In terms of the oil and gas sector, the EIA sees more prolonged growth after the initially pandemic recovery. However, Jim Turnure, EIA senior adviser for energy analysis, noted that the report does not account for any policy changes under the Biden administration, including potential bans on leasing and permitting on federal lands and waters. Already, Biden has a moratorium on lease sales and a 60-day pause on most well permits.
US crude production recently topped out near 13 million b/d at the end of 2019 before plunging during the pandemic and is currently sitting at an estimated 10.9 million b/d, according to the EIA.
The EIA reference case sees US crude production rising above 13 million b/d by 2025, peaking at 13.88 million b/d in 2034, and holding steady while slowly beginning to fall in the latter half of the 2030s. The growth is driven almost entirely by shale oil, in particular the Permian Basin. The report sees Permian crude production rising from 4.3 million b/d now to 5.3 million b/d by 2025.
However, in a longer-term, low oil price scenario, crude production may have peaked for good at the end of 2019, and US output could fall below 10 million b/d after 2030.
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US gasoline consumption to peaks by 2023 as domestic crude output keeps rising: EIA - S&P Global
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