EIA expects 7% increase in US energy-sector carbon dioxide emissions as economic activity increases during 2021

Increased economic activity and a changing fuel mix in the electric power sector in 2021 will lead to a significant increase in energy-related carbon dioxide emissions this year, according to the U.S. Energy Information Administration’s (EIA) August Short-Term Energy Outlook (STEO). After decreasing by 11% in 2020, U.S. energy-related CO2 emissions will increase by 7% to reach 4.9 billion metric tons this year.

EIA forecasts coal-related CO2 emissions will increase by 17% in 2021 because the share of U.S. electricity generated by coal has increased significantly this year.

“Despite significant growth in energy-related CO2 emissions as the U.S. economy opens up, we don’t see these emissions returning to pre-pandemic levels, at least in the short term,” said EIA Acting Administrator Steve Nalley. 

EIA expects overall energy-related CO2 emissions to increase an additional 1% in 2022, and emissions from coal to decrease 7%.

Also in the STEO:

• U.S. consumption of natural gas will decrease 1.0% in 2021, largely due to less electricity generated from natural gas. We forecast an 87% increase this year in delivered natural gas prices for the electric power sector, and these higher prices will make natural gas a less competitive electricity source. “We expect natural gas consumption will increase outside the electric power sector in 2021 as a colder winter and rising economic activity contribute to more natural gas usage for home heating and industrial applications,” Nalley said.
• Gasoline prices averaged $3.14 per gallon in July, the highest monthly average since October 2014. We expect prices to average $3.12 per gallon in August and $2.82 per gallon for the last quarter of 2021. “U.S. and global oil production will grow to meet increases in demand, helping bring down prices for gasoline and other petroleum products,” Nalley said.
• We expect that U.S. consumption of gasoline will average 9.0 million barrels per day in the second half of 2021, which remains below the 2019 average of 9.3 million barrels per day. “More employment and increased mobility are pushing up gasoline consumption, but many workers continuing to work from home will keep U.S. gasoline consumption below 2019 levels through 2022,” Nalley said.