According to the U.S. Energy Information Administration (EIA) website article published in April 2023:
U.S. macroeconomics
The U.S. macroeconomic forecasts are based on S&P Global’s macroeconomic model. EIA incorporates STEO energy price forecasts into the model to obtain the final macroeconomic assumptions EIA uses in the STEO. S&P Global estimates that U.S. GDP contracted in the first quarter of 2023 (1Q23), but it expects a return to growth in 2Q23. The forecast assumes the annual growth rate of real GDP for 2023 will be 1.1%. Residential fixed investment, private business inventories of goods, and industrial production continue to limit overall economic growth.
U.S. consumer spending is shifting away from goods toward services, reallocating economic activity away from manufacturing. In addition to upward revisions to the forecast of real U.S. GDP, inflation was revised upward in the April STEO compared with the March STEO. High inflation in fuel prices observed in early to mid-2022 has eased, but the CPI forecast was revised upward because inflation in the service sector has remained persistent.
Emissions
Energy-related U.S. carbon dioxide (CO2) emissions in the forecast decline by 3% in 2023 and then rise slightly in 2024. In percentage terms in 2023, CO2 emissions from coal fall the most, 14%, followed by CO2 emissions from natural gas which fall by 2%. Petroleum emissions fall by 1%. Reduced coal CO2 emissions are due to less coal-fired electricity generation, which falls by about 17% in 2023. Natural gas CO2 emissions decline mostly because of less-than-expected space heating demand in residential and commercial buildings.
Weather
The United States ended a mild winter season in 1Q23 with 10% fewer HDDs than in 1Q22. Based on forecasts from the National Oceanic and Atmospheric Administration, EIA expects 8% fewer CDDs in 2023 compared with 2022 and 2% fewer than the 10-year average. Realized weather patterns over the summer months will affect overall cooling demand and so introduce some uncertainty in the CDD forecast.
