AEO2013 Kentucky IAEE Presentation

7/28/2019 AEO2013 Kentucky IAEE Presentation

1/34

www.eia.govU.S. Energy Information Administration Independent Statistics & Analysis

Annual Energy Outlook 2013Reference Case

U.S. Association for Energy Economics

Louisville Chapter

Southern Baptist Theological Seminary

March 27, 2013 | Louisville, KY

by

Paul Holtberg, Team Leader, Analysis Integration Team


2/34

What is included (and excluded) in developing EIAs

Reference case projections?

2

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

not included)

Sunset provisions as specified in law (e.g., renewable production tax credits expire at theend of 2012)

Some grey regulatory areas adds a premium to the cost of financing 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 energyinfrastructure and resource extraction

Includes technologies that are commercial or reasonably expectedto become commercial over next decade or so

includes projected technology cost and efficiency improvements, as well as cost reductionslinked to cumulative deployment levels

does not assume revolutionary or breakthrough technologies

Paul HoltbergAEO2013, March 27, 2013


3/34

Growth in energy production outstrips growth in consumption

leading to reduction in net imports

3

U.S. energy production and consumption

quadrillion Btu

Source: EIA, Annual Energy Outlook 2013 Early Release

0

25

50

75

100

125

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Consumption

Production

Net imports

9%

19%

10%

History Projections2011 2035



4/34

Domestic production grows rapidly over projection period,

particularly natural gas and renewables, and liquids in the near term

4

0

20

40

60

80

100

120

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

U.S. energy production

quadrillion Btu


History Projections2011

28%

19%

30%

12%

11%

24%

35%

17%

14%

10%

Shares of total U.S. production

Nuclear

Crude oil and natural gas plant liquids

Natural gas

Coal

Renewables



5/34

U.S. energy use grows slowly over the projection reflecting improving

energy efficiency and a slow and extended economic recovery

5

0

20

40

60

80

100

120

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

U.S. primary energy consumption

quadrillion Btu



36%

20%

26%

8%

8%

1%

32%

28%

19%

11%

9%2%

Shares of total U.S. energy

Nuclear

Oil and other liquids

Liquid biofuels

Natural gas

Coal

Renewables (excluding liquid biofuels)

2000

23%

39%

24%

6%

8%



6/34

Energy and CO2 per dollar of GDP continue to decline; per-capita

energy use also declines

6

0.0

0.5

1.0

1.5

2.0

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Energy and emission intensity

index, 2005=1



Carbon dioxide emissionsper 2005 dollar of GDP

Energy use per 2005dollar of GDP

Energy use per capita

2005



7/34

In theAEO2013 Reference case, energy-related CO2 emissions

never get back to their 2005 level

7

Carbon dioxide emissions

billion metric tons


0

1

2

3

4

5

6

7

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

ProjectionsHistory 20112005

2005 2020 2040

(billion metric tons)

6.00 5.45 5.69

- - -9.0% -5.1%

(percent change from 2005)

AEO2013



8/34

Petroleum and other liquid supply

8Paul HoltbergAEO2013, March 27, 2013


9/34

Reference case oil price initially drops and then rises steadily,

but there is uncertainty about the future trajectory

9

0

50

100

150

200

250

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Annual average spot price of Brent crude oil

2011 dollars per barrel



High Oil Price

Low Oil Price

Reference



10/34

Global liquids supply increases 26 percent with regional market

shares relatively stable

10

0

20

40

60

80

100

120

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Global liquids supply

million barrels per day



OPEC

Other non-OECD

OECD

44%

25%

31%

40%

26%

34%



11/34

U.S. dependence on imported liquids declines

11

U.S. liquid fuel supply



0

5

10

15

20

25

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Consumption

Domestic supply

Net imports45% 37%


60%

2005 2035

37%



12/34

U.S. import share of liquid fuels declines due to increased

production of tight oil and gas liquids, and greater fuel efficiency

12

0

5

10

15

20

25

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

U.S. liquid fuels supply



ProjectionsHistory

Natural gas plant liquids

Petroleum production

Biofuels excluding imports

Net petroleum and biofuelimports

17%

7%

37%

38%

5%

45%

38%

12%

Liquids from natural gas and coal1%

2011



13/34

U.S. tight oil production leads a growth in domestic production

of 2.6 million barrels per day between 2008 and 2019

13

0

2

4

6

8

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

U.S. crude oil production



Tight oil

Alaska

Other lower 48 onshore

Lower 48 offshore




14/34

Light-duty vehicle liquids consumption is lower primarily due to

more stringent CAFE standards

14

Light-duty vehicle liquids consumption



0

2

4

6

8

10

2010 2015 2020 2025 2030 2035 2040

AEO2012

AEO2013

Adam SieminskiAEO2013, December 5, 2012


15/34

0

5

10

15

20

25

30

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Transportation sector motor gasoline demand declines

15

Transportation energy consumption by fuel

quadrillion Btu


60% Motor gasoline

E85Jet fuel

CNG/LNG11%

13%4%

29%

47%


2%

Pipeline fuel 3%

4%Other

4%

Diesel22%

1%



16/34

Biofuels grow at a slower rate due to lower crude oil prices and

slower growth in E85 sales

16

Renewable fuel standard credits

billions ethanol-equivalent gallons

Sources: EIA, Annual Energy Outlook 2013 Early Release and EIA, Annual Energy Outlook 2012

0

5

10

15

20

25

30

35

40

AEO2012 AEO2013 AEO2012 AEO2013 AEO2013

Other Advanced

Legislated RFS in 2022Biodiesel

Net imports

Cellulosic

biofuels

Corn ethanol

RFS withadjustments underCAA Sec.211(o)(7)

20112022 2035 2040



17/34

Natural gas



18/34

Coal regains some competitive advantage relative to natural gas

over time on a national average basis

18

0

2

4

6

8

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

ratio of natural gas price to steam coal price


0

2

4

6

8

10

1990 2000 2010 2020 2030 2040

History Projections

2011

2011 dollars per Btu


Competitive parity

Energy prices to the electric power sector

Coal

Natural gas



19/34

Domestic natural gas production grows faster than consumption

and the U.S. becomes a net exporter of natural gas around 2020

19

-5

0

5

10

15

20

25

30

35

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

U.S. dry gas

trillion cubic feet



Consumption

Domestic supply

Net imports



20/34

Shale gas production leads growth in production through 2040

20

U.S. dry natural gas production

trillion cubic feet


0

5

10

15

20

25

30

35

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Associated with oil

Coalbed methane

Tight gas

Shale gas

Alaska

Non-associated onshore

Non-associated offshore




21/34

Total natural gas exports nearly quadruple by 2040 in the

AEO2013 Reference case

21

U.S. natural gas exports

trillion cubic feet


0

1

2

3

4

5

6

2010 2015 2020 2025 2030 2035 2040

Alaska LNG exports

Exports to Mexico

Exports to Canada

Lower 48 LNG exports



22/34

22

0

5

10

15

20

25

30

35

2005 2011 2020 2025 2030 2035 2040

U.S. dry gas consumption

trillion cubic feet


ProjectionsHistory

Industrial*

Electricpower

Commercial

Residential

Transportation**

33%

14%

6%

32%

12%

33%

19%

3%

31%

13%

*Includes combined heat-and-power and lease and plant fuel.**Includes pipeline fuel.

Gas to liquids2%

Natural gas consumption is quite dispersed with electric power,

industrial, and transportation use driving future demand growth



23/34

Industrial natural gas usage grows, especially before 2025

23

0

2

4

6

8

10

2006 2011 2015 2020 2025 2030 2035 2040

Manufacturing heat and power

Nonmanufacturing

Manufacturing feedstock and miscellaneous

Industrial natural gas consumption

quadrillion Btu




24/34

Electricity



25/34

Growth in electricity use slows, but still increases by 28% from

2012 to 2040

25

U.S. electricity use

percent growth (3-year rolling average)


0

2

4

6

8

10

12

14

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040

Projections

History 2011

Period Annual Growth

1950s 9.8

1960s 7.3

1970s 4.71980s 2.9

1990s 2.4

2000-2011 0.9

2012-2040 0.9



26/34

U. S. electricity use and economic growth, 1950-2040

26

-2%

0%

2%

4%

6%

8%

10%

12%

14%

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040

Percent growth, 3-year rolling average



Electricity

Use

GDP2.4%

0.9%

2011 2040average



27/34

Annual energy use of a new refrigerator, 1950-2008

27

Kilowatthours per year

Source: DOE / EERE Building Technologies Office

0200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

1950 1955 1960 1965 1970 1978 1984 1989 1994 2000 2005 2010

1978 CA Standard

1980 CA Standard

1987 CA Standard

1990 NAECA Standard

1993 DOE Standard

2001 DOE Standard

2014 DOE Standard - estimated use

Note: The standards are expressed as the maximum annual energy consumption for a product as a function ofthe product's adjusted volume.


O i h l i i i d ll hif l b


28/34

Over time the electricity mix gradually shifts to lower-carbon

options, led by growth in natural gas and renewable generation

28

U.S. electricity net generation

trillion kilowatthours


0

1

2

3

4

5

6

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

25%

19%

42%

13%

1%

Nuclear

Oil and other liquids

Natural gas

Coal

Renewables

2011 ProjectionsHistory

17%

16%

35%

30%

1%

1993

53%

13%

19%

11%

4%


N h d bl i h d bl b


29/34

Non-hydro renewable generation more than doubles between

2011 and 2040

29

Non-hydropower renewable generation

billion kilowatthours per year


0

100

200

300

400

500

600

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Wind

Solar

GeothermalWaste

Biomass

Industrial CHP

Power sector

Advanced biofuelscogeneration (not visible)

2011 ProjectionsHistory



30/34

AEO 2012 Slides



31/34

Key sensitivities in the 2012 Annual Energy Outlook

31

Natural Gas Price Sensitivities(Henry Hub Natural Gas Prices in 2010 dollars per mmBtu)

2025 2035

Lowest 3.45 4.25

Reference 5.63 7.37

Highest 6.93 8.26

Coal Price Sensitivities(Coal Prices to Power Plants in 2010 dollars per mmBtu)

2025 2035

Lowest 1.94 1.77

Reference 2.54 2.80

Highest 3.39 4.79

Electricity Use

Billion Kilowatthours Annual

Growth 2010

to 2035

%2025 2035Lowest 4,104 4,393 0.5%

Reference 4,311 4,716 0.8%

Highest 4,508 5,082 1.1%

CO2 Fee Cases

$15 Starting in 2013

$25 Starting in 2013



32/34

Coal plant retirements

32

0

50

100

150

200

250

300

gigawatts

Source: EIA, Annual Energy Outlook 2012

Higher / LowerElectricity Demand

Higher / LowerCoal Prices

Higher / LowerNatural Gas Prices

CO2 Fee Cases


l i ddi i h h


33/34

Nuclear Capacity Additions Through 2035

33

0

20

40

60

80

100

120

140

gigawatts

Source: EIA, Annual Energy Outlook 2012

Higher / LowerElectricityDemand

Higher / LowerCoal Prices

Higher / LowerNatural Gas Prices

CO2 Fee Cases



34/34

For more information

34

U.S. Energy Information Administration home page | www.eia.gov

Annual Energy Outlook | www.eia.gov/forecasts/aeo

Short-Term Energy Outlook | www.eia.gov/forecasts/steo

International Energy Outlook | www.eia.gov/forecasts/ieo

Today In Energy | www.eia.gov/todayinenergy

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

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

Paul HoltbergAEO2013 M h 27 2013
http://www.eia.gov/http://www.eia.gov/forecasts/aeohttp://www.eia.gov/forecasts/steohttp://www.eia.gov/forecasts/ieohttp://www.eia.gov/todayinenergyhttp://www.eia.gov/totalenergy/data/monthlyhttp://www.eia.gov/totalenergy/data/annualhttp://www.eia.gov/totalenergy/data/annualhttp://www.eia.gov/totalenergy/data/monthlyhttp://www.eia.gov/todayinenergyhttp://www.eia.gov/forecasts/ieohttp://www.eia.gov/forecasts/steohttp://www.eia.gov/forecasts/aeohttp://www.eia.gov/

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