Annual Energy Outlook 2013 Early Release Reference Case AEO2013 Early Release Rollout Presentation Paul H. Nitze School of Advanced International Studies Johns Hopkins University December 5, 2012 Washington, D.C. by, Administrator U.S. Energy Information Administration Independent Statistics & Analysis www.eia.gov
Key results from the AEO2013 Reference case: Growth in energy production outstrips consumption growth Crude oil production, particularly from tight oil plays, rises sharply over the next decade Natural gas production is higher throughout the Reference case projection than it was in AEO2012, serving the industrial and power sectors and an expanding export market Motor gasoline consumption reflects the introduction of more stringent fuel economy standards, while diesel fuel consumption is moderated by increased natural gas use in heavy-duty vehicles The U.S. becomes a larger exporter of natural gas and coal than was projected in the AEO2012 Reference case All renewable fuels grow, but biomass and biofuels growth is slower than in AEO2012 U.S. energy-related carbon dioxide emissions remain more than five percent below their 2005 level through 2040, reflecting increased efficiency and the shift to a less carbon-intensive fuel mix 2
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 is not included) Sunset provisions as specified in law (e.g., renewable production tax credits expire at the end of 2012) Some grey regulatory areas adds a premium to the cost of financing CO 2 -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 3
Growth in energy production outstrips growth in consumption leading to reduction in net imports U.S. energy production and consumption quadrillion Btu History 2011 2035 Consumption 10% 9% Net imports 19% Production 4
Domestic production grows rapidly over projection period, particularly natural gas and renewables, and liquids in the near term U.S. energy production quadrillion Btu History 2011 Shares of total U.S. production Natural gas 35% 30% 12% 19% Renewables Crude oil and natural gas plant liquids 14% 17% 28% Coal 24% 11% Nuclear 10% 5
U.S. energy use grows slowly over the projection reflecting improving energy efficiency and a slow and extended economic recovery U.S. primary energy consumption quadrillion Btu Shares of total U.S. energy History 2000 2011 24% 26% Natural gas 28% 6% 8% 23% 8% 8% 1% 20% Renewables (excluding liquid biofuels) Nuclear Liquid biofuels Coal 11% 9% 2% 19% 39% 36% Oil and other liquids 32% 6
U.S. energy use is slowed by rising energy prices and the adoption of new efficiency standards for vehicles U.S. primary energy consumption quadrillion Btu History 2011 Shares of total U.S. energy 11% 21% Industrial: electricity Industrial 11% 23% 14% 4% 15% 7% Commercial: electricity Commercial Residential: electricity Residential 15% 4% 16% 5% 28% Transportation 25% 7
Energy and CO 2 per dollar of GDP continue to decline; per-capita energy use also declines Energy and emission intensity index, 2005=1 History 2005 2011 Energy use per capita Energy use per 2005 dollar of GDP Carbon dioxide emissions per 2005 dollar of GDP 8
In the AEO2013 Reference case, energy-related CO 2 emissions never get back to their 2005 level Carbon dioxide emissions billion metric tons History 2005 2011 AEO2013 2005 2020 2040 (billion metric tons) 6.00 5.45 5.69 - - -9.0% -5.1% (percent change from 2005) 9
Petroleum and other liquid supply 10
Reference case oil price initially drops and then rises steadily, but there is uncertainty about the future trajectory Annual average spot price of Brent crude oil 2011 dollars per barrel History 2011 High Oil Price Reference Low Oil Price 11
Global liquids supply increases 26 percent with regional market shares relatively stable Global liquids supply million barrels per day History 2011 OPEC 44% 40% 34% Other non-oecd 31% 26% OECD 25% 12
U.S. dependence on imported liquids declines U.S. liquid fuel supply million barrels per day History 2005 2011 2035 Consumption Net imports 60% 45% 37% 37% Domestic supply 13
U.S. import share of liquid fuels declines due to increased production of tight oil and gas liquids, and greater fuel efficiency U.S. liquid fuels supply million barrels per day History 2011 Biofuels excluding imports 5% 12% 38% Natural gas plant liquids 17% 7% Liquids from natural gas and coal 1% Petroleum production 38% 45% Net petroleum and biofuel imports 37% 14
U.S. tight oil production leads a growth in domestic production of 2.6 million barrels per day between 2008 and 2019 U.S. crude oil production million barrels per day History 2011 Tight oil Other lower 48 onshore Lower 48 offshore Alaska 15
Light-duty vehicle liquids consumption is lower primarily due to more stringent CAFE standards Light-duty vehicle liquids consumption million barrels per day AEO2012 AEO2013 16
Transportation sector motor gasoline demand declines Transportation energy consumption by fuel quadrillion Btu History 2011 22% 11% 4% 2% Diesel Jet fuel Other CNG/LNG E85 29% 4% 13% 1% 4% Pipeline fuel 3% 60% Motor gasoline 47% 17
Biofuels grow at a slower rate due to lower crude oil prices and slower growth in E85 sales Renewable fuel standard credits billions ethanol-equivalent gallons Legislated RFS in 2022 RFS with adjustments under CAA Sec.211(o)(7) Biodiesel Net imports Other Advanced Cellulosic biofuels Corn ethanol 2011 2022 2035 2040 Sources: EIA, Annual Energy Outlook 2013 Early Release and EIA, Annual Energy Outlook 2012 18
Natural gas 19
Coal regains some competitive advantage relative to natural gas over time on a national average basis ratio of natural gas price to steam coal price 2011 Energy prices to the electric power sector 2011 dollars per Btu History 2011 Natural gas Coal History Competitive parity 20
Domestic natural gas production grows faster than consumption and the U.S. becomes a net exporter of natural gas around 2020 U.S. dry gas trillion cubic feet History 2011 Consumption Domestic supply Net imports 21
Shale gas production leads growth in production through 2040 U.S. dry natural gas production trillion cubic feet History 2011 Shale gas Non-associated offshore Tight gas Coalbed methane Associated with oil Non-associated onshore Alaska 22
Total natural gas exports nearly quadruple by 2040 in the AEO2013 Reference case U.S. natural gas exports trillion cubic feet Exports to Mexico Exports to Canada Lower 48 LNG exports Alaska LNG exports 23
Natural gas consumption is quite dispersed with electric power, industrial, and transportation use driving future demand growth U.S. dry gas consumption trillion cubic feet History *Includes combined heat-and-power and lease and plant fuel. **Includes pipeline fuel. 32% Electric power 31% 33% 3% 13% 19% 33% 2% 6% 12% 14% Industrial* Gas to liquids Transportation** Commercial Residential 24
Industrial natural gas usage grows, especially before 2025 Industrial natural gas consumption quadrillion Btu 25
Electricity 26
Growth in electricity use slows, but still increases by 28% from 2012 to 2040 U.S. electricity use percent growth (3-year rolling average) History 2011 Period Annual Growth 1950s 9.8 1960s 7.3 1970s 4.7 1980s 2.9 1990s 2.4 2000-2011 0.9 2012-2040 0.9 27
Over time the electricity mix gradually shifts to lower-carbon options, led by growth in natural gas and renewable generation U.S. electricity net generation trillion kilowatthours 1993 History 2011 Natural gas 30% 13% 11% 19% 25% 13% 19% Renewables Nuclear 16% 17% 53% 4% Oil and other liquids 42% 1% Coal 35% 1% 28
Non-hydro renewable generation more than doubles between 2011 and 2040 Non-hydropower renewable generation billion kilowatthours per year History 2011 Advanced biofuels cogeneration (not visible) Wind Industrial CHP Power sector Biomass Solar Geothermal Waste 29
For more information 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 30