annual energy outlook 2013 -...
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www.eia.gov U.S. Energy Information Administration Independent Statistics & Analysis
Annual Energy Outlook 2013
18th Annual Energy and Climate Change Research Seminar
Electric Power Research Institute
May 21, 2013 | Washington, D.C.
by
J. Alan Beamon, Director, Office of Electricity, Coal, Nuclear, and
Renewables Analysis, Energy Information Administration
EIA’s “Reference case”
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• 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 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
J. Alan Beamon
AEO2013, May 21, 2013
Key results from the AEO2013 Reference case:
J. Alan Beamon
AEO2013, May 21, 2013 3
• 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
Energy and CO2 per dollar of GDP continue to decline; per-capita
energy use also declines
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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
Source: EIA, Annual Energy Outlook 2013
History Projections 2011
Carbon dioxide emissions
per 2005 dollar of GDP
Energy use per 2005
dollar of GDP
Energy use per capita
2005
J. Alan Beamon
AEO2013, May 21, 2013
Growth in energy production outstrips growth in consumption
leading to reduction in net imports
5
U.S. energy production and consumption
quadrillion Btu
Source: EIA, Annual Energy Outlook 2013
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 Projections 2011 2035
J. Alan Beamon
AEO2013, May 21, 2013
Domestic production grows rapidly over projection period,
particularly natural gas and renewables, and liquids in the near term
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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
Source: EIA, Annual Energy Outlook 2013
History Projections 2011
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
J. Alan Beamon
AEO2013, May 21, 2013
U.S. energy use grows slowly over the projection reflecting improving
energy efficiency and a slow and extended economic recovery
7
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
Source: EIA, Annual Energy Outlook 2013
History Projections 2011
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%
J. Alan Beamon
AEO2013, May 21, 2013
In the AEO2013 Reference case, energy-related CO2 emissions
never get back to their 2005 level
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Carbon dioxide emissions
billion metric tons
Source: EIA, Annual Energy Outlook 2013
0
1
2
3
4
5
6
7
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
Projections History 2011 2005
2005 2020 2040
(billion metric tons)
6.00 5.45 5.69
- - -9.0% -5.1%
(percent change from 2005)
AEO2013
J. Alan Beamon
AEO2013, May 21, 2013
Petroleum and other liquid supply
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J. Alan Beamon
AEO2013, May 21, 2013
U.S. dependence on imported liquids declines
10
U.S. liquid fuel supply
million barrels per day
Source: EIA, Annual Energy Outlook 2013
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 imports 45%
37%
Projections History 2011
60%
2005 2035
37%
J. Alan Beamon
AEO2013, May 21, 2013
U.S. import share of liquid fuels declines due to increased
production of tight oil and gas liquids, and greater fuel efficiency
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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
million barrels per day
Source: EIA, Annual Energy Outlook 2013
Projections History
Natural gas plant liquids
Petroleum production
Biofuels excluding imports
Net petroleum and biofuel
imports
17%
7%
37%
38%
5%
45%
38%
12%
Liquids from natural gas and coal 1%
2011
J. Alan Beamon
AEO2013, May 21, 2013
U.S. tight oil production leads a growth in domestic production
of 2.6 million barrels per day between 2008 and 2019
12
0
2
4
6
8
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
U.S. crude oil production
million barrels per day
Source: EIA, Annual Energy Outlook 2013
Tight oil
Alaska
Other lower 48 onshore
Lower 48 offshore
Projections History 2011
J. Alan Beamon
AEO2013, May 21, 2013
Natural gas
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J. Alan Beamon
AEO2013, May 21, 2013
Domestic natural gas production grows faster than consumption
and the U.S. becomes a net exporter of natural gas around 2020
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-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
Source: EIA, Annual Energy Outlook 2013
Projections History 2011
Consumption
Domestic supply
Net imports
J. Alan Beamon
AEO2013, May 21, 2013
Shale gas production leads growth in production through 2040
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U.S. dry natural gas production
trillion cubic feet
Source: EIA, Annual Energy Outlook 2013
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
Projections History 2011
J. Alan Beamon
AEO2013, May 21, 2013
Electricity
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J. Alan Beamon
AEO2013, May 21, 2013
Growth in electricity use slows, but still increases by 28% from
2012 to 2040
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U.S. electricity use
percent growth (3-year rolling average)
Source: EIA, Annual Energy Outlook 2013
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 4.7
1980s 2.9
1990s 2.4
2000-2011 0.9
2012-2040 0.9
J. Alan Beamon
AEO2013, May 21, 2013
U. S. electricity use and economic growth, 1950-2040
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-2%
0%
2%
4%
6%
8%
10%
12%
14%
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040
Percent growth (3-year compounded annual growth rate)
Source: EIA, Annual Energy Outlook 2013
History Projections
2011
Electricity
Use
GDP 2.4%
0.9%
2011 – 2040
average
J. Alan Beamon
AEO2013, May 21, 2013
Over time the electricity mix gradually shifts to lower-carbon
options, led by growth in natural gas and renewable generation
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U.S. electricity net generation
trillion kilowatthours
Source: EIA, Annual Energy Outlook 2013
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 Projections History
17%
16%
35%
30%
1%
1993
53%
13%
19%
11%
4%
J. Alan Beamon
AEO2013, May 21, 2013
Alternative cases explore key uncertainties
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J. Alan Beamon
AEO2013, May 21, 2013
Why might could will we be wrong?
• Different relative fuel prices
• Faster / slower demand growth
• Changing policies and regulations
• Changing consumer preferences
• Faster / slower technological progress
• Technological breakthroughs
21 J. Alan Beamon
May 21, 2013
Some key alternative cases and how they
impact energy related CO2 emissions
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• High and low economic growth cases
• High and low oil/gas resource cases
• High and low coal cost cases
• High and low nuclear cases
• High and low renewables cases
• No sunset and extended policies cases
• GHG fee cases
• High net imports and Low/no net imports cases
Annual average henry hub spot prices for natural gas in
alternative cases
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0
2
4
6
8
10
12
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
High Oil and Gas Resource
Low Oil and Gas Resource
2011 dollars per million btu
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
Reference
Annual average coal prices to power plants in alternative cases
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0
1
2
3
4
5
6
2000 2005 2010 2015 2020 2025 2030 2035 2040
Low Coal Cost
2011 dollars per million Btu
History Projections
Reference
High Coal Cost
With lower natural gas prices in the High Oil and Gas resource
case, coal is permanently displaced as the leading generation
source in the near future
25
0
500
1,000
1,500
2,000
2,500
2000 2005 2010 2015 2020 2025 2030 2035 2040
Billion kilowatthours
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
Coal
Natural
Gas
Reference
High Oil and Natural Gas Resource
Energy-Related CO2 Emissions with Alternative Oil and Natural
Gas Resource Estimates
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5,000
5,200
5,400
5,600
5,800
6,000
6,200
6,400
2000 2005 2010 2015 2020 2025 2030 2035 2040
Million metric tons CO2 equivalent
Source: EIA, Annual Energy Outlook 2013
History Projections
Reference
High Resource
Low Resource
J. Alan Beamon
AEO2013, May 21, 2013
Energy-Related CO2 Emissions with Alternative Coal Prices
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5,000
5,200
5,400
5,600
5,800
6,000
6,200
6,400
2000 2005 2010 2015 2020 2025 2030 2035 2040
Million metric tons CO2 equivalent
Source: EIA, Annual Energy Outlook 2013
History Projections
Reference
Low Cost Coal
High Cost Coal
J. Alan Beamon
AEO2013, May 21, 2013
Economic Growth Path and Energy-Related CO2 Emissions
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5,000
5,200
5,400
5,600
5,800
6,000
6,200
6,400
2000 2005 2010 2015 2020 2025 2030 2035 2040
Million metric tons CO2 equivalent
Source: EIA, Annual Energy Outlook 2013
History Projections
Reference
High Macro
Low Macro
J. Alan Beamon
AEO2013, May 21, 2013
Role of natural gas electricity generation in reducing energy-
related CO2 emissions
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0
500
1000
1500
2000
2500
3000
2000 2005 2010 2015 2020 2025 2030 2035 2040
Billion kilowatthours
Source: EIA, Annual Energy Outlook 2013
Projections
Reference
$10 fee
$15 fee
$25 fee
High oil and gas resource
$10 fee
$15 fee
$25 fee
History
J. Alan Beamon
AEO2013, May 21, 2013
Role of natural gas in reducing total energy-related CO2
emissions
30
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
2000 2005 2010 2015 2020 2025 2030 2035 2040
Million metric tons CO2 equivalent
Source: EIA, Annual Energy Outlook 2013
Projections History
Reference case resources
High oil/gas resources
$10 fees
$15 fees
$25 fees
Projected electricity generation shares of different fuels are
sensitive to fuel prices and policy developments
31
percent
42% 35% 35% 34% 38%
28% 27% 38% 37%
13% 2%
24% 30% 31%
27% 29%
36% 43% 21%
30%
31%
29%
19% 17% 18% 19%
17% 17%
16%
21%
17%
27%
37%
13% 16% 15% 19% 16% 18% 14% 20% 15%
28% 31%
0%
20%
40%
60%
80%
100%
120% Higher / Lower
Electricity
Demand
Higher / Lower
Coal Prices
Higher / Lower
Natural Gas
Prices
GHG Cases
Renewables
Nuclear
Natural Gas
Coal
Source: U.S. Energy Information Administration, Annual Energy Outlook 2013, National Energy Modeling System runs REF2013.D102312A,
LOWMACRO.D110912A, HIGHMACRO.D110912A, LCCST13.D112112A HCCST13.D112112A, HIGHRESOURCE.D021413A,
LOWRESOURCE.D012813A, NOGHGCONCERN.D110912A, CO2FEE15.D021413A, and CO2FEE25.D021413A.
J. Alan Beamon
AEO2013, May 21, 2013
Cumulative coal-fired capacity retirements, 2012-2040
32
gigawatts
0
50
100
150
200
250
300
350
Reference Low Economic
Growth
High Economic
Growth
Low Coal Cost
High Coal Cost
High Oil and Gas Resource
Low Oil and Gas Resource
No GHG Concern
GHG 15 GHG 25
Source: U.S. Energy Information Administration, Annual Energy Outlook 2013, National Energy Modeling System runs REF2013.D102312A,
LOWMACRO.D110912A, HIGHMACRO.D110912A, LCCST13.D112112A HCCST13.D112112A, HIGHRESOURCE.D021413A,
LOWRESOURCE.D012813A, NOGHGCONCERN.D110912A, CO2FEE15.D021413A, and CO2FEE25.D021413A.
J. Alan Beamon
AEO2013, May 21, 2013
For more information
33
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
J. Alan Beamon
AEO2013, May 21, 2013
Backup Slides
34
35
AEO2013
Reference
Low
Economic
Growth
High
Economic
Growth
Low Coal
Cost
High Coal
Cost
High Oil and
Gas
Resource
Low Oil and
Gas
Resource
GHG15
(CO2 fee of
$15 in 2014
increasing to
$53 in 2040)
GHG25
(CO2 fee of
$25 in 2014
increasing to
$89 in 2040)
GDP growth (avg.
annual change from
2011) 2.5% 1.9% 2.9%
Electricity demand
(avg. annual change
from 2011) 0.9% 0.6% 1.2%
Delivered natural gas
price to the electricity
sector, 2040 (2011
dollars per million Btu)
$8.38 $5.13 $10.55 $11.01 $11.10
Delivered coal price
to the electricity
sector , 2040 (2011
dollars per million Btu)
$3.20 $1.88 $5.68 $7.71 $9.45
Minemouth coal
price, 2040 (2011
dollars per short ton) $61.28 $33.90 $128.09
Western coal
transportation rates
(percent change from
2011, constant dollar
basis)
0.0% -24% 27%
Coal mining
productivity (avg.
annual change from
2011)
-1.4% 0.9% -4.3%
Coal with CCS in
power sector, 2040
(gigawatts) 0.9 2.6 3.9
NGCC with CCS in
power sector, 2040
(gigawatts) 0.0 5.8 49.9
Key differences between alternate cases
J. Alan Beamon
AEO2013, May 21, 2013