Oil & Gas

24 Jan 2022

EIA Forecasts US Fossil Fuel Production to Reach New Highs in 2023

24 Jan 2022  by   

After declining in 2020, the combined production of US fossil fuels (including natural gas, crude oil, and coal) increased by 2% in 2021 to 77.14 quadrillion British thermal units. Based on forecasts in its latest Short-Term Energy Outlook (STEO), the US Energy Information Administration (EIA) expects US fossil fuel production to continue rising in both 2022 and 2023, surpassing production in 2019, to reach a new record in 2023.

Of the total US fossil fuel production in 2021, dry natural gas accounted for 46%, the largest share. Crude oil accounted for 30%, coal for 15%, and natural gas plant liquids (NGPLs) for 9%. EIA expects those shares to remain similar through 2023.

US dry natural gas production increased by 2% in 2021, based on monthly data through October and estimates for November and December. In the EIA forecast, improvements in drilling efficiency and new-well production will contribute to production increases of 3% in 2022 and 2% in 2023.

US crude oil production dropped slightly, by an estimated 1%, in 2021, but EIA expects it to increase by 6% in 2022 and 5% in 2023. EIA forecasts that in 2022 and 2023, crude oil prices will remain high enough to encourage growth in the number of active drilling rigs and continued improvement in drilling efficiency.

US coal production increased by an estimated 7% in 2021, driven by increased demand for coal because of rising natural gas prices. Coal’s comparatively lower prices made coal more economical for use in electric power generation compared with natural gas. In 2020, US coal production had fallen to its lowest level since 1964. EIA forecasts that coal production will increase 6% in 2022 as coal-fired electricity generators rebuild inventory levels. However, EIA forecasts that coal production will only increase by 1% in 2023 as demand for coal in the electric power sector declines.

US NGPL production increased by 4% in 2021. EIA expects US NGPL production to increase by 9% in 2022 and then by 4% in 2023. Because NGPLs are a coproduct of natural gas, the forecast for rising NGPL production is linked to the forecast for rising natural gas production.

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