Politicians who passed the Inflation Reduction Act touted that the bill would reduce carbon dioxide emissions by 40 percent by 2030 from 2005 levels. The Energy Information Administration (EIA) in its Annual Energy Outlook 2023 includes the major provisions of the Inflation Reduction Act predicts a reduction of energy-related carbon dioxide emissions of 33 percent by 2030 after having already achieved a 24 percent reduction by 2020 from fuel switching and earlier policies and regulation. That’s just a 9 percentage point additional reduction over a decade from policies costing hundreds of billions of dollars to taxpayers. Further, President Biden’s goals are at least a 50 percent reduction by 2030 and net zero by 2050 which he believes will come from a combination of the Inflation Reduction Act and states taking further action, such as what California and New York are promising to do. Yet, by 2050, EIA predicts that the reduction in energy-related carbon dioxide emissions will be just 34 percent—only one additional percentage point lower than in 2030.
According to EIA, its projected reductions in U.S. energy-related carbon dioxide emissions are driven by increased electrification, higher equipment efficiency, and renewable energy deployment in the electric power sector. The agency concludes that emissions reductions are limited by longer-term growth in U.S. transportation and industrial activity. Energy-related carbon dioxide emissions reductions are, however, 17 percent lower by 2050 in this year’s Annual Energy Outlook compared to last year’s due to the Inflation Reduction Act (IRA), energy technology costs and performance changes, a revised macroeconomic outlook, and as well as other factors.
Fossil Fuels Still Dominate the U.S. Energy Sector
By 2050, U.S. fossil energy (oil, natural gas, and coal) consumption still makes up the majority of U.S. energy consumption, despite a decline from its 2022 share. In 2050, EIA expects fossil fuels to make up 65 percent of U.S. energy consumption, down from 79 percent in 2022. Renewable energy is expected to make up 29 percent of U.S. energy consumption in 2050, up from 13 percent in 2022. The nuclear share is expected to decline from 8 percent in 2022 to 6 percent in 2050.
Push Toward Electrification Increases Electricity Demand
President Biden’s policies and regulations as well as certain state mandates push the United States toward increased electrification with electricity demand growing 27 percent in EIA’s forecast between 2022 and 2050.
Technological Advancements Drive Projected Decreases to Demand-side Energy Intensity
EIA projects rising numbers of electric arc furnaces in the iron and steel industry, heat pumps, and electric vehicles. In the residential and commercial sectors, higher equipment efficiencies and stricter building codes extend ongoing declines in energy intensity. In the transportation sector, light-duty vehicle fuel efficiency improves due to rising Corporate Average Fuel Economy (CAFE) standards and electric vehicle (EV) sales. CAFE standards for new cars and trucks combined increase from 35.9 miles per gallon in 2022 to 46.9 miles per gallon in 2050. The market share of electric vehicles increases in EIA’s forecast but stays below 20 percent through 2050 in the reference case that includes the major provisions of the Inflation Reduction Act and has Brent oil prices increasing to $101 per barrel in 2050. Oil prices in 2050 for the low and high oil prices cases are $51 per barrel and $190 per barrel, respectively.
Federal Incentives and State Mandates Result in Increased Renewable Generation
EIA expects renewable generating capacity to almost quadruple between 2022 and 2050, increasing from 308 gigawatts in 2022 to 1162 gigawatts in 2050. Expensive battery backup increases by a factor of 27, increasing from 6 gigawatts in 2022 to 164 gigawatts in 2050. Despite declines in coal capacity of 128 gigawatts (198 gigawatts to 70 gigawatts) and nuclear capacity of 19 gigawatts (95 gigawatts to 76 gigawatts), total generating capacity almost doubles (1105 gigawatts to 2172 gigawatts) due to wind and solar power’s low capacity factors. Natural gas combined cycle capacity increases slightly (258 gigawatts to 280 gigawatts) and natural gas turbines more than double (143 gigawatts to 317 gigawatts) providing additional back-up power for wind and solar between 2022 and 2050. Nominal residential electricity prices increase from 14.6 cents per kilowatt hour to 26.6 cents per kilowatt hour. Fossil fuel generation’s share declines from 59 percent in 2022 to 27 percent in 2050, while the renewable share including hydroelectric generation increases from 23 percent in 2022 to 63 percent in 2050.
U.S. Remains an Exporter of Petroleum Products and Natural Gas
EIA expects U.S. oil and natural gas production to remain historically high due to high international demand through 2050. Domestic oil and natural gas consumption remain relatively stable, despite a shift in electricity generation towards renewable energy. Between 2022 and 2050, U.S. oil production is expected to increase by 11 percent and U.S. natural gas production is expected to increase by 15 percent. Between 2022 and 2050, U.S. exports of oil and petroleum products are expected to increase by 18 percent, U.S. natural gas exports are expected to double, and U.S. coal exports are expected to increase by 27 percent.
While the EIA acknowledges progress in its forecast toward electrification and wind and solar generation, there is still a ways to go to reach Biden’s net zero vision by 2050 and even his 50 percent reduction in carbon dioxide emissions by 2030 as fossil fuels still make up 65 percent of U.S. energy demand in 2050. Despite the expense of his Inflation Reduction Act, it will take trillions more to reach his goals, only to get more unreliable electricity. Across the country, electricity grids are being weakened by the “net zero by 2050” fiasco. Coal, natural gas and nuclear plants with years of reliable operating life are being replaced with unreliable and subsidy-dependent wind turbines and solar panels.
In order to ensure Americans will have reliable electricity supplies, expensive back-up to intermittent renewable energy is necessary. Electrical grids are being burdened with extra demand from electric vehicles, natural gas bans, and a push to electrify the entire U.S. energy system. This direction is a precursor of brownouts, blackouts and general disaster, with impacts including deindustrialization and slower economic growth. Americans need to wake up to the looming disaster that is costing taxpayers and consumers billions, all in pursuit of Biden’s net-zero dream.