Energy (Oil, Natural Gas, Electricity, and Renewables) Outlook for Homes and Businesses in 2017
Please keep in mind that while the information presented here is valuable, it's important to remember that predictions can and often do change over time. This information was compiled from industry publications.
Exxon Mobile released a report earlier this year called, Exxon Mobile’s Outlook for Energy: Journey to 2040. This report predicts that out of all fuel types, oil will remain the number one source of demand for the world’s energy needs. In particular, oil will help to continue support the transportation and chemical industries.
Predicting oil prices seems to pose a bit of a challenge for many experts in the industry. For example, according to an article on oilprice.com in late 2016, investment banks and other companies predicted that oil would remain around $50 to $60 USD. However, in early February of that same year, some experts had expected oil to reach $70 USD and higher at the end of this year and into 2018. Other experts stated that they believed oil would reach $10 USD—which never happened.
Predictions for 2017 remain just as uncertain, as experts face many questions, some of which include:
- Will OPEC deliver promised cuts?
- Will the above mentioned cuts help to rebalance the market?
- How quickly will/would the United States shale industry bounce back?
- What effect would a rebound have on industry rates?
Natural Gas Vs. Coal
According to the Energy Information Administration’s (EIA) Annual Energy Outlook 2017, this year, the United States is going to start to see an increase in some of the types of energy used, particularly in natural gas and natural resources. Meanwhile, other energy types that used to be some of the most used sources of energy in America, are going to experience a decline. This is particularly applicable for coal.
The reason for this change is due to the fact that the price of natural gas is currently much lower compared to other resources. This trend is expected to continue into 2017 and beyond. Both the Clean Power Plan (CPP) and many new tax credits are also expected to have an impact on resources that are less fuel efficient, like coal. Overall, EIA predicts that natural gas and other renewable sources of energy will take the lead in terms of new generation, which will help combat the increase in electricity demand towards the end of the year.
Other Renewable Energies
EIA also predicts that 2017 will have Americans relying on more electricity that is generated by wind and solar technologies. This increase in demand will in part be caused by new state Renewable Portfolio Standards (RPS) and the CPP. Many consumers will also take advantage of the production tax credits associated to implementing wind generation technologies before they expire.
In addition, solar power is expected to eventually exceed hydroelectric power generation. This shift will have a lot to do with the tax credits, technology improvements and lower costs now associated with solar panels and installation.
Increase in Electricity Demand
While there is going to be an increase in electricity demand, that increase is going to be much lower compared to previous years included in EIA's research.
The main reason why growth demand will slow in 2017 is because much of the outdated equipment used to generate or provide electricity to residences and businesses within the United States has been upgraded in some way, shape or form. These upgrades will help to increase the energy efficiency in many areas—especially those that rely on new appliance and lighting technologies. Renewable resources will also see a similar growth increase this year thanks to technologies like, photovoltaic (PV) solar panels.
United States Electricity Rates for 2017
While it’s important to understand the kinds of shifts that the American energy industry will experience over the course of 2017, it is also important to explore the impact of these changes on the rates consumers can expect to see.
It is impossible to guess the exact rates customers will see over the course of the year, however, based on research conducted by the EIA, we know that overall electricity sales will be 0.9% higher than last year. Residential rates are expected to rise at least by 3% by the end of the year. In the business sector of the United States, commercial will also grow about 0.9% and industrial approximately, 1.2%.
Average electricity rates by sector are expected to reach: 12.87 cents per kWh for residential, 10.58 cents per kWh for commercial and 6.87 cents per kWh for industrial.
The EIA has based these predictions off of the fact that winter temperatures early on this year are expected to be much colder compared to previous years.
Global Emission Increase
According to Exxon Mobile’s Outlook for Energy: Journey to 2040 report, the world will see an increase in electricity demand, one that goes hand in hand with the expected increase in total population.
According to the report, by 2040, the world’s population will reach 9 billion. This is an increase of 1.8 billion people over 23 years. As a result, the demand for electricity will rise, along with global emissions. However, global emissions are estimated to only rise by 10% until 2030. By this time, and well afterward, emissions are predicted to drop.
The reason for the decline will be in thanks to the efforts the world makes today in turning towards more energy efficient options. This includes, more efficient fuels for transportation, building and office upgrades, as well as using more fossil fuels and renewable energies.
Shawn Weeks is relatively new to the energy industry. He joined Eisenbach Consulting, LLC, an energy management and procurement company based in Texas, in 2015.
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