U.S. crude output to keep rising, but gasoline demand is past its peak -EIA

(Reuters) - U.S. crude oil production is expected to rebound to a new record in 2023 after being hit by the coronavirus pandemic, the Energy Information Administration said on Wednesday in its 2021 annual energy outlook.

FILE PHOTO: A sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. REUTERS/Angus Mordant/File Photo

However, the EIA projects that U.S. gasoline demand is already past a peak reached in 2018.

The United States and other major world economies, are trying to engineer a massive shift in consumption and production habits away from fossil fuels to head off rising temperatures around the globe.

The coronavirus pandemic’s travel restrictions that crushed oil demand and prices, have accelerated plans of oil companies and others as they try to get a foothold in renewable energy production.

The EIA projects U.S. crude output to top the 2019 record of 12.25 million barrels per day in 2023. Production in 2020 tumbled 6.4% to 11.47 million bpd.

It is forecast to peak at 13.88 million bpd in 2034 before it starts to decline, the statistical arm of the U.S. Department of Energy said in its outlook.

Gasoline demand will rise 9.1% to 8.97 million bpd this year before it steadily declines through 2050. It hit 9.33 million bpd in 2018, a figure that the EIA says is likely the high-water mark for consumption.

“The pace of economic recovery, advances in technology, changes in trade flows, and energy incentives will determine how the United States produces and consumes energy in the future,” said EIA Acting Administrator Stephen Nalley.

Natural gas demand will also continue to rise, albeit slowly. The EIA said gas consumption should increase by an average of 0.5% per year to a record 35.4 trillion cubic feet (tcf) in 2050.

Production will outpace that, hitting a record 43.0 tcf by that period. That means the rest of the gas produced will be exported or stored.

EIA also projects that U.S. liquefied natural gas (LNG) exports would rise by an average of 2.6% per year to a record 5.0 tcf in 2032 and hold near that level through 2050.

The department also said gas should account for about 36% of U.S. electric generation by 2050, while the share of coal, currently 20% and nuclear (21%) will fall by about half. Renewables are expected to double from its current 20% by 2050.

Reporting by Laura Sanicola; Editing by Marguerita Choy