EIA says Natural Gas and Oil Will Remain Integral, But Where Will They Come From?
Posted February 10, 2021
Natural gas and oil will remain central to meeting our nation’s energy needs well into the future. So says the nonpartisan U.S. Energy Information Administration (EIA) in its 2021 Annual Energy Outlook.
The analysis is critically important given the Biden administration’s apparent shift away from the previous administration’s focus on building American energy dominance through homegrown natural gas and oil – seen in the president’s executive order halting new federal leasing.
EIA’s forecast and the administration’s energy position are incompatible with each other, raising a simple question: If we aren’t allowed access to key federal natural gas and oil reserves, onshore and offshore, where will our energy supply come from?
Source: EIA Annual Energy Outlook 2021
Halting federal leasing simply doesn’t make sense when you think about how far the U.S. has come in recent years, thanks to the increased domestic production of natural gas and oil. We’ve seen economic growth, increased energy security and lower costs for consumers, just to name a few of the benefits, all of which are more important than ever as we work toward economic recovery.
EIA says energy demand will continue to rise, especially as the economy recovers – an outcome that holds true in each of the report’s scenarios. So, we can choose to produce that energy here in the United States – creating reliable, well-paying American jobs and spurring economic growth in the process – or we can rely on foreign suppliers, a number of whom are not America’s friends. Bloomberg reports that an index of Russian energy stocks, including oil giants Rosneft and Lukoil, already is up relative to their European oil and gas companies in anticipation of further carbon-reducing policy moves in the U.S.
Source: EIA Annual Energy Outlook 2021
While the administration’s actions currently call for a suspension of new leasing, it looks like the first step toward a permanent ban on natural gas and oil development on federal lands and waters, which studies have already shown would cost nearly 1 million American jobs by 2022 and put $9 billion in revenues paid to government at risk.
Here’s what else we know about the consequences of a federal leasing and development ban:
- The U.S. economy would suffer, with GDP declining by a cumulative $700 billion through 2030 and nearly one million jobs lost by 2022, with top production-states suffering significant losses. New Mexico, for example, would lose over 62,000 jobs over the next two years.
- Environmental progress would backslide, with coal use increasing by 15% by 2030 and carbon dioxide emissions increasing by an average of 58 million metric tons (MMT), representing a 5.5% increase in the power sector by 2030.
- America’s energy security would be at risk, with offshore production decreasing by 68% for natural gas and by 44% for crude oil by 2030, and U.S. oil imports from foreign sources increasing by 2 million barrels per day. Through 2030, the U.S. would spend $500 billion more on energy from foreign suppliers.
The EIA’s report is one more reminder that our nation’s energy needs are going to grow for the foreseeable future. Halting natural gas and oil leasing on federal lands serves only to forego the benefits that come with meeting these needs with energy produced right here at home.
About The Author
Jessica Lutz is a writer for the American Petroleum Institute. Jessica joined API after 10+ years leading the in-house marketing and communications for non-profits and trade associations. A Michigan native, Jessica graduated from The University of Michigan with degrees in Communications and Political Science. She resides in London, and spends most of her free time trying to keep up with her energetic Giant Schnauzer, Jackson.