The headlines have been dramatic in the wake of the Energy Information Agency’s International Energy Outlook 2019:
World Energy Use Doubles By 2050! Carbon Emissions Will Continue To Rise! Renewables Will Provide Half the World’s Energy!
But the EIA doesn’t expect any of them to come true.
“EIA is really sure that what we project in here is not going to happen,” said David Daniels, EIA’s chief energy modeler. “It is wrong. We know it’s wrong. It’s biased. We know where the bias is.”
The EIA’s projections rely on two assumptions, Daniels said at Rice University’s Baker Institute, that certainly will not come to pass:
- “First, there are no technology revolutions between now and 2050, no structural breaks, no technology breakthroughs. Sure, technology can lead us to evolve, prices get cheaper, technology continues to improve, but no breakthroughs, no dilithium crystals.”
- “The second one is current laws and regulations as written on the books stay as written on the books. Nothing ever changes. No new laws, no new regulations. How many people believe that’s going to happen? Right, yeah, EIA doesn’t believe that either. We’re absolutely sure that is not going to happen. The US Congress is not going to take no action between now and 2050 that has an impact on the energy system.”
The EIA makes a distinction between projections and forecasts that may not be fully appreciated by some readers of those headlines. Its projections, said Daniel, establish a baseline against which to measure the changes that do come.
“Why in the world do we do this? It’s ridiculous, right? We do it because we’re not trying to produce a forecast of the future. We’re not trying to predict what’s going to happen. We do it because we’re trying to produce a baseline, a baseline against which to measure change, the impact of action. You can’t measure the impact of action unless you have a baseline against which to measure it, so we are producing a baseline. This is the no-change, no-action baseline.”
The reference case in this year’s International Energy Outlook, affectionately known as IEO2019, produces five insights about what the world would look like in 2050 if the world energy economy maintains the trajectory it’s on right now with no significant technological, economic or policy changes:
1. Manufacturing centers are shifting toward Africa and South Asia, especially India, resulting in energy consumption growth in those countries.
2. Natural gas and petroleum-product consumption is rising in Asia faster than supply is growing, potentially shifting trade patterns and infrastructure investments.
3. End-use consumption is increasingly shifting toward electricity, because of falling prices and favorable policy in many parts of the globe.
4. The electricity generation mix is also changing because of falling costs, demand growth, and policy, such that:
5. Renewables displace petroleum as the most-used energy source, yet carbon dioxide emissions from the energy use continue to rise.
Emissions would continue to rise, Daniels says in video released by the Baker Institute last week, because current conditions do not project a peak for fossil fuels, after which their use begins to decline.
“You need a forecast in order to make an investment decision. You’re not gonna get that from EIA,” Daniels said. “Please don’t make any investment decisions based on this. It will be wrong. You will lose your shirt.”