The decade that blew up energy predictions
America’s energy sources, like booming oil and crumbling coal, have defied projections and historical precedents over the last decade.
Why it matters: It shows how change can happen rapidly and unexpectedly, even in an industry known to move gradually and predictably. With a new decade upon us, let’s look back at the last one’s biggest, most surprising energy changes.
Where it stands: The following five charts show the U.S. Energy Information Administration projections for the future from a decade ago, along with current EIA data to compare those projections with what actually has happened.
Driving the news: The stark differences are driven by myriad factors not included in the decade-old projections, including policy changes and ever-more efficient technology extracting oil and gas.
Oil production and prices
In 2010, the U.S. Energy Information Administration projected that in 2019, the U.S. would be producing about six million barrels of oil a day. The reality? We're now producing 12 million barrels of oil a day.
- Meanwhile, EIA projected oil prices would be more than $100 a barrel. They're currently hovering around $60 a barrel.
What’s happening: A pair of extraction methods — horizontal drilling and hydraulic fracturing — have unlocked far more oil and gas than experts had predicted, and companies have gotten hyper-efficient extracting more oil from each well.
EIA had projected in 2010 that the U.S. would be importing a net eight million barrels of petroleum by now, which includes crude oil and petroleum products like gasoline. In September, the U.S. actually exported a net 89,000 barrels of petroleum.
Flashback: A driving reason behind this is Congress lifting the 40-year-old ban on crude oil exports in 2015, a policy change few thought possible a decade ago.
Natural gas production
In 2010, EIA projected that the U.S. would be producing about 20 trillion cubic feet of natural gas by now. In 2018, the last full year of annual data, we produced more than 30 trillion.
What’s happening: Horizontal drilling and fracking are the key drivers here too — though oil is typically more valuable than gas, so the increase has been greater with oil than gas.
The EIA had projected that coal electricity would remain dominant in the U.S. and natural gas would remain relatively stable — even drop slightly in its share of power supply. The opposite is happening. Coal-fired power is plummeting and natural gas has risen significantly.
Renewables tracked a bit higher than where projections were a decade ago. This is due to the low base on which wind and solar started from, the sporadic nature of federal tax subsidies for these industries and continued support among states.
What happened: Stringent environmental regulations issued during the Obama administration, combined with the surprisingly plentiful supplies of cleaner-burning natural gas, drove these unexpected changes with coal and gas.
Congress remains in an on-again-off-again relationship with renewable-energy subsidies, but many states are ramping up even more clean-energy goals and wind and solar costs continue to drop. So I expect wind and solar to keep growing, which goes against EIA's 2010 projections.
Greenhouse gas emissions
EIA had projected in 2010 that U.S. energy-related carbon dioxide emissions would continue rising, albeit at a slower pace. In fact, they dropped.
What happened: The same one-two punch that drove natural gas to dominate over coal in the electricity mix has driven this change. More recently, the growth in wind and solar, which don't produce emissions, is accelerating this trend.
Yes, but: Emissions have ticked back up, however, due to a growing economy and the fact that natural gas, although it emits half the CO2 as coal, is still a fossil fuel. It can also emit methane, which is a potent greenhouse gas. EIA does project emissions to decline slightly in the coming years.
What we're watching: What we all might get wrong in the next decade.