According to the U.S. Energy Information Administration (EIA) website article published on February, 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. S&P Global continues to forecast a mild recession starting in the first quarter of 2023 (1Q23) through 2Q23. Real U.S. GDP in the forecast contracts at an annualized rate of 1.3% in 1Q23 and 0.3% in 2Q23, mostly due to a decline in residential fixed investment, private business inventories of goods, and industrial production. However, EIA revised the forecast of 2023 real GDP upward by 0.3 percentage points from the January STEO and 2023 GDP growth now averages 0.8%. U.S. manufacturing production contracted in November 2022. As a result, the 4Q22 estimate of the Manufacturing Production Index was revised lower by 1.0%. The slowing of manufacturing activity is likely the result of a shift in consumer spending away from goods toward services and resulting in a reduction in diesel fuel consumption in the forecast. S&P Global expects U.S. GDP to grow by 2.1% in 2024 as the economy shifts out of recession and returns to positive GDP growth beginning in 3Q23. In addition, GDP growth is expected to be led by net exports and personal consumption expenditures in 2Q23, with a more broad-based increase occurring later in the year.
Emissions: EIA expects U.S. energy-related carbon dioxide (CO2) emissions to decrease slightly more than previously forecast, declining by almost 4% in 2023. The decrease is driven by slow economic growth and a continuing increase in electricity generation from renewable sources, which reduces fossil fuel-fired generation and associated CO2 emissions. Among the major fossil fuel categories, CO2 emissions from coal decline by around 15%, mostly from decreasing coal-fired electricity generation. EIA forecast natural gas emissions to decrease by around 1% as natural gas-fired electricity generation also decreases. Renewable sources displace generation from both fuels. EIA expects petroleum emissions to fall by 1% in 2023 compared with 2022.
EIA expects U.S. energy-related CO2 emissions in 2024 to remain almost unchanged from 2023. Petroleum CO2 emissions increase slightly as a result of increases in air and road travel. Coal emissions remain flat as coal-fired electricity generation continues to decrease. Natural gas emissions fall slightly. Although natural gas consumption will likely decrease in the industrial and electric power sectors in 2024, it will be partly offset by an increase in the residential and commercial sectors, driven by the expectation of increased demand for space heating.
Weather: In January, weather in the United States was very mild, with 16% fewer population-weighted HDDs than the 10-year average; the mildest January since 2006. Based on forecasts from the National Oceanic and Atmospheric Administration, in 1Q23 EIA expects 8% fewer HDDs in the United States compared with 1Q22 and 7% fewer than the 10-year average. EIA have updated the expectations for winter heating fuel expenditures based on the most recent temperature and price forecasts.
