America's Abundant, Low-Cost Fossil 'Fuels Of The Future' Will Be Our Dominant Energy Source For Many Decades

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Includes: BNO, BOIL, DBO, DCNG, DGAZ, DNO, DTO, DWTI, GAZ, KOLD, OIL, OILK, OILX, OLEM, OLO, SCO, SZO, UCO, UGAZ, UNG, UNL, USL, USO, UWTI
by: Mark J. Perry

The chart below displays energy consumption shares based on new forecasts out to the year 2050 that were released last week by the Energy Information Administration.

As the trends in the chart indicate, we can see that:

  1. Despite all of the animosity directed towards fossil fuels by the Obama administration, those energy sources (coal, oil and natural gas) will continue to provide the overwhelming majority of energy in the U.S. for the foreseeable future. For example, even in the year 2050, more than a quarter-century from now, fossil fuels will be the source for 79% of our energy needs, which is not much below the 83% fossil fuel share in 2015.
  2. Despite all of the hype, cheer-leading, fuel mandates, state portfolio standards for electric power, and taxpayer subsidies directed towards renewable energy, those renewable energy sources (mostly wind and solar) will only provide 15% of our energy consumption in 2050.

Bottom Line

President Obama frequently dismissed oil and fossil fuels as "energy sources of the past," but the new forecasts from his own Department of Energy tell a much different story of a hydrocarbon-based energy future where fossil fuels will continue to serve as the dominant energy sources to power our vehicles, heat and light our homes, and fuel the U.S. economy for many generations to come. Further, President Obama's energy policy has been primarily to force taxpayers to "invest" in what he has called "energy sources of the future" - renewable energy like solar and wind - instead of expanding production of oil, natural gas and coal.

But, again, the Department of Energy data tell a much different story. Even after billions of dollars in taxpayer subsidies for renewable energy, all renewables together in 2015 (hydroelectric, geothermal, wood and wood waste, biogenic municipal waste, other biomass, wind, photovoltaic, and solar thermal sources) supplied only 8.4% of America's energy, which wasn't much of an improvement from the average 7.65% renewable energy share during the 1980s when geothermal and biomass were the main renewable energy sources. That's not a lot of progress for the politically popular and very expensive so-called "energy sources of the future."

Hopefully, we're in a new era with a new administration that will reverse the wishful thinking about which fuels are the "energy sources of the future." The economic and scientific reality, as the chart above illustrates, is that abundant, low-cost fossil fuels will continue to dominate the U.S. fuel mix for many, many decades into the future - out to the year 2050 and beyond. The shale energy revolutionized energy production in the U.S., and the Trump administration should embrace the fossil fuel energy sources that have facilitated our emergence as an energy superpower.

Low-cost, abundant energy from coal, oil and natural gas have served, and will continue to support the U.S. economy by providing U.S. manufacturers, firms, and households with some of the cheapest energy on the planet. The U.S. has long operated with a mindset of energy scarcity and the threat of increasing dependence on foreign sources. But now that we have plentiful supplies of oil and natural gas, it's time for an energy policy that reflects a new era of energy abundance. If they're smart about energy as early indications suggest, Team Trump will adopt policies that encourage increased domestic oil and natural gas production, move us away from failed energy mandates such as the Renewable Fuel Standard, speed up LNG export approvals (see related article "Japan Buys Its First Shipment Of Natural Gas From U.S. Fracking") and wisely use our energy resources as a powerful geopolitical tool.