Energy Issues and the Impacts on Freight Transportation
Dr. Mark Rodekohr
Energy Information Administration
May 17, 2006
Presentation Organization
• Short-Term Fuel Price Outlook for Freight Fuels
• Longer Term Outlook for the Freight Sector
West Texas Intermediate Crude Oil Price(Base Case and 95% Confidence Interval*)
*The confidence intervals show +/- 2 standard errors based on the properties of the model.
0
10
20
30
40
50
60
70
80
90
100
Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08
Dollarsper
barrel
Forecast
U.S. Distillate Fuel Prices
0255075
100125150175200225250275300325350
Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08
Retail Diesel Retail Heating Oil WTI Crude Oil
Forecast
Cents
per
gallon
*Includes OPEC non-crude production, MMBD= million barrels per day
Growth in World Consumption & Non-OPEC Production
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2003-Q1 2003-Q3 2004-Q1 2004-Q3 2005-Q1 2005-Q3 2006-Q1 2006-Q3 2007-Q1 2007-Q3
MM
BD
Ch
ang
e fr
om
pre
vio
us
year
-7
0
7
14
21
28
$ P
er B
arre
l Ch
ang
e fr
om
Pre
vio
us
Yea
r
DemandNon-OPEC Supply*WTI Crude Oil Price
Demand growth exceeds
non-OPEC supply growth
Forecast
0
1
2
3
4
5
6
1991-1997
Average
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
World Oil Surplus Production Capacity
Forecast
Million barrels per day
Major Events and World Oil Prices1970-2005
0
20
40
60
80
1970 1975 1980 1985 1990 1995 2000 2005
Refiner Acquisition Cost of Imported Crude Oil (Saudi Light Official Price for 1970-73)
Oil Embargo
Iranian Revolution
Iran-Iraq War Begins
Saudis abandon "swing producer" role
Iraq Invades Kuwait
Operation Desert Storm
OPEC cutbacks
9/11 attacks
Venezuela Unrest
Strong Demand Growth
Asian Economic Crisis
Hurricanes Katrina and Rita Strike U.S. Gulf Coast
dollars per barrel
EIA Has Reassessed Its Long-Term Oil Price Projection
• Major oil producing countries pace investment more consistent with higher oil price path
• Investment impediments more persistent, even after several years of relatively higher oil prices
• Cost of doing business increasing
• Not due to “Peak Oil” considerations, although we are following this issue closely
0
20
40
60
80
1980 1990 2000 2010 2020 2030
History
AEO2005
AEO2006
World Oil Price, 1980-2030(2004 dollars per barrel)
History Projections
Annual Energy Outlook 2005 and 2006
U.S. Petroleum Consumption by Sector, 1970-2030(million barrels per day)
0
5
10
15
20
1970 1980 1990 2000 2010 2020 2030
Industrial
Transportation
Residential and Commercial
Electric Power
ProjectionsHistory
Annual Energy Outlook 2006
U.S. Transportation Energy Consumption by Mode, 1980-2030(quadrillion Btu)
0
5
10
15
20
25
1980 1990 2000 2010 2020 2030
ProjectionsHistory
Annual Energy Outlook 2006
Light-Duty Vehicles
Rail
Freight Trucks
Water
Air
Bus
U.S. Heavy-Duty Vehicle Energy Consumption, 1980-2030(quadrillion Btu)
0
1
2
3
4
5
6
7
8
1980 1990 2000 2010 2020 2030
ProjectionsHistory
Annual Energy Outlook 2005 and 2006
AEO2006AEO2005
U.S. Heavy-Duty Travel, 1980-2030(billion miles)
0
50
100
150
200
250
300
350
400
450
1980 1990 2000 2010 2020 2030
ProjectionsHistory
Annual Energy Outlook 2005 and 2006
AEO2006AEO2005
U.S. Heavy-Duty Vehicle Efficiency, 1980-2030(miles per gallon)
5
6
7
1980 1990 2000 2010 2020 2030
ProjectionsHistor
y
Annual Energy Outlook 2005 and 2006
AEO2006
AEO2005
U.S. Heavy-Duty Vehicle Sales, 1980-2030(thousands)
0
100
200
300
400
500
600
700
1980 1990 2000 2010 2020 2030
ProjectionsHistory
Annual Energy Outlook 2005 and 2006
AEO2006
AEO2005
U.S. Heavy-Duty Vehicle Technology Penetration, 2000-2030(percent)
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
2000 2010 2020 2030
Annual Energy Outlook 2006
Internal Friction Reduction
Advanced Drag Reduction
Advanced Fuel Injection
-30
-20
-10
0
10
20
30
U.S. Transportation Fuel Use in Two Technology Cases(percent change from reference case)
2005 Technology
High Technology
Light-DutyVehicles
FreightTrucks Aircraft Light-Duty
VehiclesFreightTrucks Aircraft
2010 2030
Annual Energy Outlook 2006
World Transportation Sector Energy Use by Region, 2002-2025 (quadrillion Btu)
0
10
20
30
40
50
60
70
2002 2010 2015 2020 2025
Mature Market Economies Transitional Economies Emerging Economies
International Energy Outlook 2005
World Oil Reserves by Country, as of January 1, 2006(billion barrels)
0 50 100 150 200 250 300
Rest of WorldUnited
IndonesiaEcuador
AngolaOmanIndia
AzerbaijanNorway
KazakhstanBrazil
AlgeriaMexico
QatarChina
United StatesNigeria
LibyaRussia
VenezuelaUAE
KuwaitIraqIran
CanadaSaudi Arabia
Oil & Gas Journal, Vol. 103, No. 47 (December 19, 2005).
World Total =1,293 Billion Barrels
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