U.S., Global Energy Demand Forecasted As Lackluster for Rest of 2020

Energy demand will remain lackluster for the rest of the year, energy experts told a Senate panel June 16. U.S. domestic petroleum consumption will be at record lows in 2020 because of the coronavirus, with a rebound to 2019 levels not expected until after the end of 2021, Stephen Nalley, deputy director of the U.S. Information Administration, told the Senate Energy and Natural Resources Committee during a hearing on the effects COVID-19 has had on the energy sector. He added, however, that the International Energy Agency expects oil prices to rise to the $30s per barrel by the end of the year, up from a low of $18 per barrel in April.

David Turk, acting deputy executive director of the IEA, said that the agency forecasts global energy demand to drop 6% in 2020. Carbon dioxide emissions should fall about 8% globally, the largest prolonged decrease in worldwide emissions ever, Turk added. Frank Macchiarola, senior vice Carbon dioxide emissions should fall about 8% globally, the largest prolonged decrease in worldwide emissions ever, Turk added. Frank Macchiarola, senior vice president of policy, economics and regulatory affairs at the American Petroleum Institute, told the panel that the oil and natural gas industry, particularly producers, were hit hard by the demand destruction caused by the pandemic. He noted, however, that the industry contributed heavily to charitable causes, including food banks, personal proactive gear acquisition and in the production of hand sanitizer. Macchiarola also expressed thanks to the Environmental Protection Agency for providing fuel waivers allowing additional time to switch to summer-grade gasoline blends, and he noted that API assisted the Department of Energy in utilizing its policy purview to bolster the nation’s Strategic Petroleum Reserve.

He said that the decision by the Department of Energy to cancel plans to sell oil from the reserve during the crisis was helpful. He also added that DOE’s pivot to leasing capacity was a creative use of its existing authority, adding that 15 million barrels had been leased of the 23 million barrels the DOE offered in the SPR. The move helped mitigate a, “potential real issue with storage,” Macchiarola said, adding extreme storage tightness had been, “alleviated” by DOE’s action and the “rebalancing of demand.”