annual energy outlook 2012 - u.s. energy … and co 2 per dollar of gdp continue to decline;...

www.eia.gov U.S. Energy Information Administration Independent Statistics & Analysis

AEO2012 Early Release Rollout Presentation Paul H. Nitze School of Advanced International Studies John Hopkins University January 23, 2012 | Washington, DC Howard Gruenspecht, Acting Administrator

Annual Energy Outlook 2012 Early Release Reference Case

Key results from the AEO2012 Reference case, which assumes current laws remain unchanged

2 Howard Gruenspecht AEO2012, January 23, 2012

• Projected growth of energy use slows over the projection period reflecting an extended economic recovery and increasing energy efficiency in end-use applications

• Domestic crude oil production increases, reaching levels not experienced since 1994 by 2020

• With modest economic growth, increased efficiency, growing domestic production, and continued adoption of nonpetroleum liquids, net petroleum imports make up a smaller share of total liquids consumption

• Natural gas production increases throughout the projection period and exceeds consumption early in the next decade

• Renewables and natural gas fuel a growing share of electric power generation

• Total U.S. energy-related carbon dioxide emissions remain below their 2005 level through 2035

What is included (and excluded) in developing EIA’s “Reference case” projections?


• Generally assumes current laws and regulations – excludes potential future laws and regulations (e.g., proposed greenhouse gas legislation

and proposed fuel economy standards are not included)

– provisions generally sunset as specified in law (e.g., renewable tax credits expire)

• Some grey areas – adds a premium to the capital cost of CO2-intensive technologies to reflect current market

behavior regarding possible future policies to mitigate greenhouse gas emissions

– assumes implementation of existing regulations that enable the building of new energy infrastructure and resource extraction

• Includes technologies that are commercial or reasonably expected to become commercial over next decade or so

– includes projected technology cost and efficiency improvements, as well as cost reductions linked to cumulative deployment levels

– does not assume revolutionary or breakthrough technologies

Overview of U.S. energy supply and demand


Current U.S. energy supply is 83% fossil fuels; demand is broadly distributed among the major sectors

5

2010 total U.S. energy use = 98.0 quadrillion Btu

Source: EIA, Annual Energy Outlook 2012 Early Release

Primary energy demand by fuel Primary energy demand by sector

Natural gas 25.2%

Coal 21.3%

Renewable 8.2%

Nuclear 8.6% Petroleum

36.7%

Electricity – Residential

15.6%

Residential and Commercial 11.2%

Electricity – Commercial

14.3%

Electricity – Industrial 10.4% Industrial

20.4%

Transportation 28.1%

Howard Gruenspecht AEO2012, January 23, 2012

Energy use grows slowly over the projection in response to a slow and extended economic recovery and improving energy efficiency

6

0

20

40

60

80

100

120

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

U.S. primary energy consumption quadrillion Btu per year


History Projections 2010

37%

25%

21%

9%

7%

1%

32%

25%

20%

11%

9%

4%

Shares of total U.S. energy

Nuclear

Oil and other liquids

Liquid biofuels Natural gas

Coal

Renewables (excluding liquid biofuels)


Energy and CO2 per dollar of GDP continue to decline; per-capita energy use also declines

7

index, 2005=1


0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Per dollar Per capita CO2 per GDP

History Projections 2010


0

1

2

3

4

5

6

7

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Energy-related CO2 emissions

2005 2020 2035 Energy-related CO2 emissions

6.00 5.55 5.81

% change from 2005 - - -7.5% -3.2%

In the AEO2012 Reference case, energy-related CO2 emissions never get back to pre-recession levels by 2035

8

billion metric tons carbon dioxide


Projections History 2010 2005


Natural Gas


10

0

500

1000

1500

2000

2500

3000

2000 2005 2006 2007 2008 2009 2010 2011 2012

U.S. dry gas resources trillion cubic feet

*Alaska resource estimates prior to AEO2009 reflect resources from the North Slope that were not included in previously published documentation.

Source: EIA, Annual Energy Outlook

2,214

273

482

1,460

Unproved shale gas Unproved other gas (including Alaska* and offshore) Proved reserves (all types and locations)


AEO Edition

Technically recoverable natural gas resources reflect updated assessments

Domestic natural gas production grows faster than consumption

11

-5

0

5

10

15

20

25

30

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

U.S. dry gas trillion cubic feet per year


Projections History 2010

Consumption

Domestic supply


Net imports

0

5

10

15

20

25

30

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

2%

Shale gas offsets declines in other U.S. natural gas production sources

12

U.S. dry gas production trillion cubic feet per year


Non-associated offshore

Projections History

Associated with oil Coalbed methane

Non-associated onshore

Shale gas

2010

10%

7%

9%

7%

21%

23%

9%

9%

7%

49%

Alaska 1%

Tight gas 26%

21%


Natural gas consumption is quite dispersed; electric power and industrial use drives much of the future demand growth

13

0

5

10

15

20

25

30

2005 2010 2020 2030 2035

U.S. dry gas consumption trillion cubic feet per year

*Includes combined heat-and-power and lease and plant fuel. **Includes pipeline fuel. Source: EIA, Annual Energy Outlook 2012 Early Release

Projections History

Industrial*

Electric power

Commercial

Residential

Transportation**

34%

18%

13%

32%

3%

31%

21%

13%

33%

3%


Natural gas price projections are lower than in AEO2011, consistent with recent market developments

14

natural gas spot price (Henry Hub) 2010 dollars per million Btu

Sources: EIA, Annual Energy Outlook 2012 Early Release and EIA, Annual Energy Outlook 2011

0

1

2

3

4

5

6

7

8

9

10

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035


AEO2011


AEO2012

Petroleum and other liquid supply


0

25

50

75

100

125

150

175

200

225

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Oil prices in the Reference case rise steadily; the full AEO2012 will include a wide range of oil prices

16

annual average price of light low sulfur (LLS) crude oil real 2010 dollars per barrel



High Oil Price

Low Oil Price

AEO2012 Reference (LLS)


Global liquids supply increases 25% while market shares hold relatively stable

17

0

20

40

60

80

100

120

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

liquids supply million barrels per day



OPEC

Other non-OECD

OECD Americas

OECD other

42%

19%

35%

3%

40%

19%

35%

6%


U.S. imports of liquid fuels continue to decline due to increased production of gas liquids and biofuels and greater fuel efficiency

18

U.S. liquid fuels supply million barrels per day


0

5

10

15

20

25

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Projections History

Natural gas plant liquids

Petroleum production

Biofuels including imports

Net petroleum imports

14%

12%

36%

36%

10%

49%

36%

5%

Liquids from coal 1%


2010

U.S. dependence on imported petroleum continues to decline

19

0

5

10

15

20

25

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

U.S. liquid fuel supply million barrels per day


Consumption

Domestic supply

Net petroleum imports 49%

36%


60%

2005


0

5

10

15

20

25

30

35

40

45

2010 2022 2035

RFS with adjustments under CAA Sec.211(o)(7)

Other Advanced

Biofuels fall short of the RFS target in 2022, but exceed 36 billion gallons by the early 2030s


billions ethanol-equivalent gallons

Source: EIA, Annual Energy Outlook 2012 Early Release, Annual Energy Outlook 2011

Legislated RFS in 2022 Biodiesel Net imports

Cellulosic biofuels

Corn ethanol

AEO2011 AEO2012

0

5

10

15

20

25

30

35

40

45

2000 2005 2010 2015 2020 2025 2030 2035

21

miles per gallon


2010 Projections History

Summary of standards

2012-2016: 34.1 mpg CAFE average (based on NHTSA vehicle footprint sales distribution)

2020: 35 mpg by statute 2017-2025: Reference case does not include proposed

rulemaking from December 2011


New light duty vehicle fuel economy reaches almost 38 mpg by 2035 in the Reference case, which does not include proposed standards for MY2017 to MY2025 vehicles

0

4

8

12

16

1995 2000 2005 2010 2015 2020 2025 2030 2035

Most transport fuel consumption is in light and heavy duty vehicles

22

U.S. transportation energy consumption million barrels per day oil equivalent


Rail Air

Projections History

Heavy-duty vehicles

Light-duty vehicles

Marine

2010

5%

66%

2% 9%

18%

64%

20%

9%

5% 2%


Efficiency improvements mostly offset underlying drivers of growth in transportation services

23

* Equal to a 27% reduction in fuel use per mile. ** Equal to an 19% reduction in fuel use per mile. Source: EIA, Annual Energy Outlook 2012 Early Release

2010

2035

Growth (2010-2035)

Light duty vehicles Fuel consumption (million barrels per day oil equivalent) 8.6 8.8 2%

Number of licensed drivers (millions) 209 265 27%

Miles per licensed driver 12,700 13,600 7%

Efficiency of vehicle stock (mpg) 20.4 27.8 36%*

Heavy duty vehicles Fuel consumption (million barrels per day oil equivalent) 2.4 2.8 18%

Manufacturing output (billion 2005 dollars) 4,260 6,270 47%

Number of freight trucks (millions) 9.3 13.4 44%

Miles per vehicle 25,300 25,700 1.3%

Efficiency of vehicle stock (mpg) 6.7 8.2 23%**


Electricity


While electricity consumption grows by 23% over the projection, the annual rate of growth slows

25

percent growth (3-year rolling average)

0

2

4

6

8

10

12

14

1950 1960 1970 1980 1990 2000 2010 2020 2030

Projections

History Period Annual Growth 1950s 9.8 1960s 7.3 1970s 4.7 1980s 2.9 1990s 2.4 2000-2010 1.0 2010-2035 0.8

2010



In 2010, U.S. electricity generation was 70% fossil fuels, 20% nuclear, and 10% renewable

Nuclear 19.6%

Natural gas 23.8%

2010 Total net generation: 4,120 billion kWh

Coal 44.9%

2010 Non-hydro renewable net generation: 168 billion kWh

Geothermal: 0.4%

Other biomass: 0.5%

Wood and wood-derived fuels: 0.9%

Other renewable

4.1%

Conventional hydroelectric

6.2%

Other 0.3%

Wind: 2.3%

Solar thermal and PV: <0.1%

Petroleum 0.9%

Other gases 0.3%

26

Source: EIA, Annual Energy Review, October 2011


0

1

2

3

4

5

6

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Projections History

18%

16%

Electricity mix gradually shifts to lower-carbon options, led by growth in renewables and natural gas

27

electricity net generation trillion kilowatthours per year


2010

24%

20%

45%

10%

1%

39%

27%

1%

Nuclear Oil and other liquids

Natural gas

Coal

Renewables


0

100

200

300

400

500

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Projections History

Non-hydro renewable sources more than double between 2010 and 2035

28

non-hydropower renewable generation billion kilowatthours per year


Wind

Solar

Biomass

Geothermal Waste

Industrial CHP Power sector

Advanced biofuels cogeneration


2010

Expected changes in the AEO2012 Reference case for the complete release


• Incorporation of Mercury and Air Toxics Standards (MATS) issued by EPA in December, 2011

• Updated historical data and equations in the transportation sector, based on revised data from the National Highway Traffic Safety Administration (NHTSA) and Federal Highway Administration

• Revised long-term macroeconomic projection based on an updated long term projection from IHS Global Insight, Inc.

• New model for cement production in the industrial sector

• Updated handling of biomass supply

For more information

30

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Monthly Energy Review | www.eia.gov/totalenergy/data/monthly

Annual Energy Review | www.eia.gov/totalenergy/data/annual


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annual energy outlook 2012 - u.s. energy … and co 2 per dollar of gdp continue to decline;...

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