EIA’s Annual Energy Outlook 2012
A comprehensive assessment of the U.S. energy picture
For
National Governors Association
May 30, 2012 |Washington, DC
By
Howard Gruenspecht, Acting Administrator
U.S. Energy Information Administration
Independent Statistics & Analysis
www.eia.gov
U.S. Energy Breakdown by Fuel and Sector
Source: EIA Annual Energy Review 2010
Howard Gruenspecht
May 30, 2012
2
Key results from the AEO2012 Reference case, which assumes
current laws remain unchanged
• 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
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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
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Energy use grows slowly over the projection in response to a slow
and extended economic recovery and improving energy efficiency
U.S. primary energy consumption
quadrillion Btu per year
Shares of total U.S. energy
History
2010
120
Projections
Renewables
(excluding liquid biofuels)
7%
100
11%
4%
1%
Liquid biofuels
Natural gas
80
25%
60
9%
Nuclear
9%
21%
Coal
20%
37%
Oil and other liquids
32%
40
20
0
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
25%
2035
Source: EIA, Annual Energy Outlook 2012 Early Release
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May 30, 2012
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Energy and CO2 per dollar of GDP continue to decline;
per-capita energy use also declines
index, 2005=1
History
1.75
2010
Projections
1.50
Per dollar
Per capita
1.25
CO2 per GDP
1.00
0.75
0.50
0.25
0.00
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
Source: EIA, Annual Energy Outlook 2012 Early Release
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In the AEO2012 Reference case, energy-related CO2 emissions
never get back to pre-recession levels by 2035
billion metric tons carbon dioxide
History
7
2005
2010
Projections
6
5
Energy-related CO2 emissions
4
3
Energy-related CO2
emissions
2
% change from 2005
2005
2020
2035
6.00
5.55
5.81
--
-7.5%
-3.2%
1
0
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
Source: EIA, Annual Energy Outlook 2012 Early Release
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Electricity
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In 2010, U.S. electricity generation was 70% fossil fuels, 20%
nuclear, and 10% renewable
2010 Total net generation:
4,120 billion kWh
Other gases
0.3%
Nuclear
19.6%
2010 Non-hydro renewable
net generation:
168 billion kWh
Conventional
hydroelectric
6.2%
Other
0.3%
Natural gas
23.8%
Other
renewable
4.1%
Wind: 2.3%
Solar thermal
and PV: <0.1%
Wood and woodderived fuels: 0.9%
Petroleum
0.9%
Coal
44.9%
Geothermal: 0.4%
Other biomass: 0.5%
Source: EIA, Annual Energy Review, October 2011
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The fuel mix for electricity generation varies widely across U.S.
regions (2010)
Share of Generation by Fuel, 2010
National
Average Minimum Maximum
Coal
45%
0%
80%
Natural Gas
24%
3%
85%
Nuclear
20%
0%
40%
Renewables
10%
0%
50%
Oil / Other
1%
0%
8%
Source: EIA AEO2012 (Early Release), based on Form EIA-923
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While electricity consumption grows by 23% over the projection,
the annual rate of growth slows
percent growth (3-year rolling average)
History
2010
14
12
10
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
8
Projections
6
4
2
0
1950
1960
1970
1980
1990
2000
2010
2020
2030
Source: EIA, Annual Energy Outlook 2012 Early Release
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Electricity mix gradually shifts to lower-carbon options, led by
growth in renewables and natural gas
electricity net generation
trillion kilowatthours per year
History
6
Projections
2010
5
27%
Natural gas
4
24%
3
10%
Renewables
16%
Coal
39%
Nuclear
18%
2
45%
1
Oil and other liquids
0
1990
1995
2000
2005
20%
1%
2010
2015
2020
2025
2030
1%
2035
Source: EIA, Annual Energy Outlook 2012 Early Release
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Non-hydro renewable sources more than double between 2010
and 2035
non-hydropower renewable generation
billion kilowatthours per year
History
500
2010
Projections
400
Advanced biofuels
cogeneration
Biomass
300
Power sector
Industrial CHP
200
Wind
100
0
1990
Solar
Geothermal
Waste
1995
2000
2005
2010
2015
2020
2025
2030
2035
Source: EIA, Annual Energy Outlook 2012 Early Release
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The average delivered price of coal to electricity generators varies
widely across U.S. regions – transport costs are a key reason
2010 Delivered coal prices, $ per million Btu
$3.41
$2.02
$2.96
$2.01
N/A
$1.51
$1.49
N/A
$2.48
$1.57
$1.46
$2.91
$1.75
1.77
$2.45
$1.93
$1.83
National
Average
Minimum Maximum
$2.25
$1.46
$4.46
$3.65
$1.83
$3.40
$1.91
$4.46
Source: EIA, Annual Energy Outlook 2012 Early Release
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Operating costs: existing plants with and without a
value on carbon
Fuel Cost for Existing Coal and Combined
Cycle Natural Gas Units with a Value
Placed on Carbon Dioxide Emissions
•
The “crossover point” for least-cost
dispatch of coal and natural gas
capacity depends on both fuel prices
and the carbon value. At lower natural
gas prices, the “crossover” occurs at
a lower carbon value.
•
Environmental operating costs and
retrofit costs for pollution controls at
existing coal-fired plants can “raise the
bar” for their continued operation.
– For retrofit decisions, the unit’s
perceived “useful life,” which plays
a critical role, can be affected by
views regarding future climate
policies
2010 dollars per megawatthour
160
Coal at $3
140
Coal at $2
120
100
80
Natural Gas
CC at $7
60
Natural Gas
CC at $4
40
Natural Gas CC at $3
20
0
0
10 20 30 40 50 60 70 80 90 100 110 120
Carbon Dioxide Value (dollars per ton CO2)
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Examples of updated environmental retrofit costs
Flue Gas Desulfurization
(2010$/kW)
Selective Catalytic Reduction
(2010 $/kW)
Capital
Costs
($/kW)
$602
$521
$474
Capital
Costs
($/kW)
$203
$185
$177
300 MW
500 MW
700 MW
VOM
($/MWh)
300 MW
500 MW
700 MW
$1.72
VOM
($/MWh)
$1.30
Dry Sorbent Injection + Full Fabric Filter
(Baghouse) (2010$/kW)
Size (MW)
300
500
700
Capital Cost
($/kW)
197
180
171
VOM
($/MWh)
6.72
Source: EPA IPM v4.1 Documentation
http://www.epa.gov/airmarkets/progsregs/epa-ipm/docs/suppdoc.pdf
http://www.epa.gov/airmarkt/progsregs/epa-ipm/docs/v410/Chapter5.pdf
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Natural Gas
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Underground sources of natural gas
Source: modified from U.S. Geological Survey Fact Sheet 0113-01
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Shale gas plays, Lower 48 States
Source: Energy Information Administration based on data from various published studies.
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Since January 2007, U.S. shale gas production has increased over 7-fold
and in 2011 comprised over 30 percent of total U.S. dry production
monthly shale gas production (dry)
billion cubic feet per day
30
Rest of US
25
Bakken (ND)
Eagle Ford (TX)
20
Marcellus (PA and WV)
Haynesville (LA and TX)
15
10
Woodford (OK)
Fayetteville (AR)
Barnett (TX)
Antrim (MI, IN, and OH)
5
0
1/1/2007
1/1/2008
1/1/2009
1/1/2010
1/1/2011
1/1/2012
Sources: Lippman Consulting, Inc. gross withdrawal estimates as of March 2012 and converted to dry production
estimates with EIA-calculated average gross-to-dry shrinkage factors by state and/or shale play.
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Natural gas consumption is quite dispersed; electric power and
industrial use drives much of the future demand growth
U.S. dry gas consumption
trillion cubic feet per year
History
30
Projections
25
34%
Electric
power
32%
Industrial*
13%
3%
13%
3%
Commercial
Transportation**
21%
18%
Residential
31%
20
15
33%
10
5
0
2005
2010
2020
2030
2035
*Includes combined heat-and-power and lease and plant fuel. **Includes pipeline fuel.
Source: EIA, Annual Energy Outlook 2012 Early Release
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Shale gas offsets declines in other U.S. natural gas production
sources
U.S. dry gas production
trillion cubic feet per year
History
30
Projections
2010
25
20
23%
15
26%
9%
10
2%
5
0
1990
1995
2000
2005
49%
Shale gas
Tight gas
21%
9%
10%
Non-associated offshore
Coalbed methane
Associated with oil
21%
Non-associated onshore
2010
2015
2020
Alaska
2025
2030
1%
7%
7%
7%
9%
2035
Source: EIA, Annual Energy Outlook 2012 Early Release
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Petroleum
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U.S. dependence on imported petroleum continues to decline
U.S. liquid fuel supply
million barrels per day
History
Projections
2010
25
2005 
20
Consumption
36%
15
Net petroleum imports
10
60%
49%
Domestic supply
5
0
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
Source: EIA, Annual Energy Outlook 2012 Early Release
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U.S. imports of liquid fuels continue to decline due to increased
production of gas liquids and biofuels and greater fuel efficiency
U.S. liquid fuels supply
million barrels per day
25
History
2010
5%
Projections
Biofuels including imports
20
12%
10%
15
36%
Natural gas plant liquids
1%
Liquids from coal
Petroleum production
36%
Net petroleum imports
36%
10
5
49%
14%
0
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
Source: EIA, Annual Energy Outlook 2012 Early Release
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Efficiency improvements mostly offset underlying drivers of
growth in transportation services
Growth
2010
2035
(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%
12,700
13,600
7%
Efficiency of vehicle stock (mpg)
Heavy duty vehicles
Fuel consumption (million barrels per day oil equivalent)
20.4
27.8
36%*
2.4
2.8
18%
Manufacturing output (billion 2005 dollars)
4,260
6,270
47%
9.3
13.4
44%
25,300
25,700
1.3%
6.7
8.2
23%**
Miles per licensed driver
Number of freight trucks (millions)
Miles per vehicle
Efficiency of vehicle stock (mpg)
* 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
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Probability of WTI crude oil exceeding different price levels by
September 2012
100%
90%
5/18/2012
80%
4/18/2012
70%
60%
50%
40%
30%
20%
10%
0%
$60
$70
$80
$90
$100
$110
$120
$130
$140
$150
Price (dollars per barrel)
Note: All prices represent rolling 5-day averages.
Source: U.S. Energy Information Administration, Chicago Mercantile Exchange (CME)
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What makes up the price at the pump?
Source: U.S. Energy Information Administration
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Gasoline prices vary regionally
Source: U.S. Energy Information Administration
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Probability of U.S. retail gasoline exceeding different price
levels by September 2012
100%
90%
5/18/2012
80%
4/18/2012
70%
60%
50%
40%
30%
20%
10%
0%
$2.50
$3.00
$3.50
$4.00
$4.50
$5.00
Price (dollars per gallon)
Note: All prices represent rolling 5-day averages.
Source: U.S. Energy Information Administration, Chicago Mercantile Exchange (CME)
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