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
U.S. Energy Information Administration
Independent Statistics & Analysis
www.eia.gov
EIA’s “Reference case”
• 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
2
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
J. Alan Beamon
AEO2013, May 21, 2013
3
Energy and CO2 per dollar of GDP continue to decline; per-capita
energy use also declines
Energy and emission intensity
index, 2005=1
History
2.0
2005
2011
Projections
1.5
1.0
Energy use per capita
Energy use per 2005
dollar of GDP
0.5
Carbon dioxide emissions
per 2005 dollar of GDP
0.0
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
4
Growth in energy production outstrips growth in consumption
leading to reduction in net imports
U.S. energy production and consumption
quadrillion Btu
History
125
Projections
2011
2035
Consumption
9%
100
10%
Net imports
19%
75
Production
50
25
0
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
5
Domestic production grows rapidly over projection period,
particularly natural gas and renewables, and liquids in the near term
U.S. energy production
quadrillion Btu
Shares of total U.S. production
History
120
Projections
2011
100
80
Natural gas
35%
Renewables
14%
Crude oil and natural gas plant liquids
17%
30%
60
12%
40
19%
20
28%
Coal
24%
11%
Nuclear
10%
0
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
6
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
History
Shares of total U.S. energy
2000
120
Projections
2011
100
28%
24%
26%
6%
8%
8%
8%
1%
20%
80
60
23%
Natural gas
Renewables (excluding liquid biofuels) 11%
Nuclear
Liquid biofuels
Coal
19%
Oil and other liquids
32%
40
39%
20
0
1980
1985
1990
1995
2000
36%
2005
2010
2015
9%
2%
2020
2025
2030
2035
2040
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
7
In the AEO2013 Reference case, energy-related CO2 emissions
never get back to their 2005 level
Carbon dioxide emissions
billion metric tons
History
7
2005
Projections
2011
6
AEO2013
5
4
2005
3
2020
2040
(billion metric tons)
2
1
6.00
5.45
5.69
--
-9.0%
-5.1%
(percent change from 2005)
0
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
8
Petroleum and other liquid supply
J. Alan Beamon
AEO2013, May 21, 2013
9
U.S. dependence on imported liquids declines
U.S. liquid fuel supply
million barrels per day
25
History
2005
Projections
2011
2035
20
Consumption
15
Net imports
10
60%
45%
37%
37%
Domestic supply
5
0
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
10
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
25
History
2011
Projections
Biofuels excluding imports
20
15
12% Natural gas plant liquids
5%
38%
Petroleum production
10
5
Liquids from natural gas and coal
45%
Net petroleum and biofuel
imports
17%
7%
1%
38%
37%
0
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
11
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
8
History
Projections
2011
6
Tight oil
4
Other lower 48 onshore
2
Lower 48 offshore
Alaska
0
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
12
Natural gas
J. Alan Beamon
AEO2013, May 21, 2013
13
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
35
Projections
2011
30
25
Consumption
20
Domestic supply
15
10
5
Net imports
0
-5
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
14
Shale gas production leads growth in production through 2040
U.S. dry natural gas production
trillion cubic feet
History
35
Projections
2011
30
25
Shale gas
20
15
Tight gas
Non-associated offshore
10
Alaska
Coalbed methane
Associated with oil
5
0
1990
Non-associated onshore
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
15
Electricity
J. Alan Beamon
AEO2013, May 21, 2013
16
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
14
12
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
10
Projections
8
6
4
2
0
1950
1960
1970
1980
1990
2000
2010
2020
2030
2040
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
17
U. S. electricity use and economic growth, 1950-2040
Percent growth (3-year compounded annual growth rate)
2011
14%
History
Projections
12%
10%
8%
Electricity
Use
6%
2011 – 2040
average
4%
2.4%
GDP
2%
0.9%
0%
-2%
1950
1960
1970
1980
1990
2000
2010
2020
2030
2040
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
18
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
History
1993
6
Projections
2011
5
30%
Natural gas
4
25%
3
13%
11%
2
19%
1
53%
16%
Renewables
13%
19%
Nuclear
42%
Coal
17%
35%
Oil and other liquids
4%
0
1990
1%
1995
2000
2005
2010
2015
2020
2025
2030
2035
1%
2040
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
19
Alternative cases explore key uncertainties
J. Alan Beamon
AEO2013, May 21, 2013
20
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
J. Alan Beamon
May 21, 2013
21
Some key alternative cases and how they
impact energy related CO2 emissions
• 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
22
Annual average henry hub spot prices for natural gas in
alternative cases
2011 dollars per million btu
12
10
Low Oil and Gas Resource
8
6
Reference
4
High Oil and Gas Resource
2
0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
23
Annual average coal prices to power plants in alternative cases
2011 dollars per million Btu
6
History
Projections
5
High Coal Cost
4
Reference
3
2
Low Coal Cost
1
0
2000
2005
2010
2015
2020
2025
2030
2035
2040
24
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
Billion kilowatthours
2,500
Reference
Coal
2,000
1,500
1,000
High Oil and Natural Gas Resource
Natural
Gas
500
0
2000
2005
2010
2015
2020
2025
2030
2035
2040
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
25
Energy-Related CO2 Emissions with Alternative Oil and Natural
Gas Resource Estimates
Million metric tons CO2 equivalent
History
6,400
Projections
6,200
6,000
High Resource
5,800
Reference
5,600
Low Resource
5,400
5,200
5,000
2000
2005
2010
2015
2020
2025
2030
2035
2040
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
26
Energy-Related CO2 Emissions with Alternative Coal Prices
Million metric tons CO2 equivalent
History
6,400
Projections
6,200
6,000
Low Cost Coal
5,800
Reference
5,600
5,400
High Cost Coal
5,200
5,000
2000
2005
2010
2015
2020
2025
2030
2035
2040
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
27
Economic Growth Path and Energy-Related CO2 Emissions
Million metric tons CO2 equivalent
History
6,400
Projections
6,200
High Macro
6,000
5,800
Reference
5,600
5,400
5,200
Low Macro
5,000
2000
2005
2010
2015
2020
2025
2030
2035
2040
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
28
Role of natural gas electricity generation in reducing energyrelated CO2 emissions
Billion kilowatthours
History
3000
Projections
High oil and gas resource
$10 fee
$15 fee
$25 fee
2500
2000
1500
1000
Reference
$10 fee
$15 fee
$25 fee
500
0
2000
2005
2010
2015
2020
2025
2030
2035
2040
Source: EIA, Annual Energy Outlook 2013
J. Alan Beamon
AEO2013, May 21, 2013
29
Role of natural gas in reducing total energy-related CO2
emissions
Million metric tons CO2 equivalent
History
6,500
Projections
Reference case resources
6,000
High oil/gas resources
5,500
5,000
4,500
4,000
$10 fees
$15 fees
$25 fees
3,500
3,000
2000
2005
2010
2015
2020
2025
2030
2035
2040
Source: EIA, Annual Energy Outlook 2013
30
Projected electricity generation shares of different fuels are
sensitive to fuel prices and policy developments
120%
Higher / Lower
Electricity
Demand
percent
Higher / Lower
Coal Prices
Higher / Lower
Natural Gas
Prices
GHG Cases
100%
13%
80%
60%
19%
24%
16%
17%
15%
18%
19%
19%
16%
17%
18%
14%
20%
16%
17%
15%
28%
31%
21%
27%
30%
31%
27%
29%
36%
40%
Renewables
17%
43%
21%
30%
37%
Nuclear
31%
20%
42%
35%
35%
34%
38%
28%
38%
37%
29%
27%
13%
0%
2%
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
31
Cumulative coal-fired capacity retirements, 2012-2040
gigawatts
350
300
250
200
150
100
50
0
Reference
Low
High
Low Coal High Coal High Oil Low Oil No GHG GHG 15
Economic Economic Cost
Cost
and Gas and Gas Concern
Growth
Growth
Resource Resource
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
32
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
J. Alan Beamon
AEO2013, May 21, 2013
33
Backup Slides
34
Key differences between alternate cases
AEO2013
Reference
Low
Economic
Growth
High
Economic
Growth
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
J. Alan Beamon
AEO2013, May 21, 2013
Low Coal
Cost
High Coal
Cost
35