1

Maxine L. Savitz

JuDecember 6, 2010

University of Miami

America’s Energy Future:Challenges and Opportunities

Key Forces Shaping U.S. Energy Situation• Increasing world energy demand stemming from economic

globalization, particularly in developing nations, and especially China, tightens energy markets.

• U.S. oil imports comprise nearly 60 percent of the U.S. oil use, up from 40 percent in 1990—alternatives are limited.

• Energy price volatility has been unprecedented in last two years, continuing to complicate market decisions.

• Long term reliability of traditional energy sources, especially oil, is uncertain and will continue to be so.

• Mounting concerns about global climate change, largely from burning fossil fuels that provide most world energy, are increasingly a significant factor in energy decisions.

• U.S. Energy infrastructure is massive and slowly adapts to change and vulnerable to natural disasters and terrorism.

2

Total Energy Use Projections for Selected Countries: 2006 and 2009 Projections

U.S. and China energy use will be the same in 2014

Source: Energy Information Administration, International Energy Outlook3

Energy Intensity of the U.S. Economy*Relative to 1970 levels

1950 1960 1970 1980 1990 2000 2010 2020 20300.00

0.25

0.50

0.75

1.00

1.25

Energ

y Inte

nsity*

(1970=

1)

*Energy consumed per dollar GDP (2000 constant dollars)Source: Based on EIA, 2006

ProjectedHistorical

Oil

Total Energy

Electricity

Energy Efficiency and Economic Structural Change

4

America’s Energy Future: Technology Opportunities,

Risks, and Tradeoffs

October 2008 December 9, 2009

http://www.nationalacademies.org/energy

May 20, 2009

June 15, 2009

July 29, 2009

5

Key Objectives of America’s Energy Future (AEF) “Foundational Study” (Phase 1)

• Provide transparent and authoritative estimates of the current contributions and future potential of existing and new energy supply and demand technologies, impacts and costs, focusing on the next two decades.

• Resolve conflicting analyses.

To facilitate a productive national policydialogue about the nation’s energy future

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Finding 1: Potential for Transformational Change

With a sustained national commitment, the United States could obtain substantial energy-efficiency

improvements, new sources of energy, and reductions in greenhouse gas emissions through the accelerated

deployment of existing and emerging energy-supply and end-use technologies.

“Bucket 1” “Bucket 2” “Bucket 3”

2008 2020 2035 2040 2050

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Finding 2: Energy Efficiency Potential

The deployment of existing energy-efficiency technologies is the nearest-term and lowest-cost option for moderating our nation’s demand for energy, especially over the next decade.

15 Percent (15-17 Quads) by 2020

30 Percent (32-35 Quads) by 2030

2008 2020 2035 2040 2050

NOTE: Even greater savings would be possible with more aggressive policies and incentives.

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Finding 3: Electricity Supply OptionsThe United States has many promising options for

obtaining new supplies of electricity and changing its supply mix during the next two to three decades, especially if carbon capture and storage (CCS) and evolutionary nuclear technologies can be deployed at required scales.

However, the deployment of these new supply technologies is very likely to result in higher consumer prices for electricity.

Terawatt-hours

Renewables 340Coal CCS Retrofits

New Coal CCS

Nuclear Power UpratesNew Nuclear Power Plants

***conventional coal ****existing nuclear

NOTE: Estimates are not additive

63 6395

****

20000 1200

74 1800

800

Current

***

790

500

2035

1100

2008 2020

10

Levelized Cost of Electricity Generation

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Finding 5: Continued Dependence on Oil

Petroleum will continue to be an indispensable transportation fuel through at least 2035.

EIA Reference Case through 2030

Total EnergyQuadrillion Btu per year

Cellulosic Ethanol 0Coal to Liquids with CCS 0Coal-and-biomass-to-Liquids 0

0.5 1.7

Current

0 30 2.5

Million Barrels of Gasoline Equivalent Per Day

20202008 2035

Transportation Million barrels of gasoline equivalent per day

Reminder: Estimates are not additive

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Other Key Findings

• Expansion and modernization of the nation’s electrical transmission and distribution systems are urgently needed. (Finding 4)

• Substantial reduction in GHG emissions from the electricity and transportation sectors achievable over the next two to three decades through a portfolio approach. (Finding 6)

• To enable accelerated deployment of new energy technologies starting 2020, public and private sector will need to perform extensive RD & D over the next decade. (Finding 7)

• Barriers can delay or prevent accelerated deployment; policy and regulatory actions will be required to overcome the barriers. (Finding 8)

U.S. Energy Efficiency Potential(Quadrillions of Btus [quads])

• U.S. energy use (2008): 101 quads• EIA projected U.S. energy use (2030): 118 quads• Energy efficiency savings potential: 35 quads saved• Net U.S. 2030 energy use: 83 quads

• 35 quads/yr savings potential by 2030, saving money & energy

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14

Total U.S. Energy Use by Sector, 2008

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U.S. Delivered Energy Use by Sectors (2007)

0

5

10

15

20

25

30

35

40

Residential Commercial Industrial Transportation

Renewables

Coal

Natural Gas

Petroleum

Through Electricity

U.S. Delivered Energy Use by Sectors (2007)(quads)

0

5

10

15

20

25

30

35

40

Residential Commercial Industrial Transportation

Renewables

Coal

Natural Gas

Petroleum

Through Electricity

U.S. Delivered Energy Use by Sectors (2007)(quads)

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U.S. Delivered CO2 by Sector

0

500

1000

1500

2000

2500

Residential Commercial Industrial Transportation

Coal

Natural Gas

Petroleum

Through Electricity

(Million Tonnes CO2)

U.S. Delivered CO2 Emissions by Sector (2007)

0

500

1000

1500

2000

2500

Residential Commercial Industrial Transportation

Coal

Natural Gas

Petroleum

Through Electricity

(Million Tonnes CO2)

U.S. Delivered CO2 Emissions by Sector (2007)

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Energy Usage in U.S. Residential & Commercial Sectors

Growth in Energy Usage in Buildings Could be Reduced 30 Percent fromProjected Increase by 2030 (APS Finding 1)

Source: American Physical Society (2008), U.S. DOE, EERE, Energy Data Book (2007)

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Potential Electricity Savings in Commercial and Residential Buildings, 2020 and 2030

U.S. Trends in Refrigerator Appliance Efficiency

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1978 CA *1980 CA *

1987 CA *

1993 NECA *

2001 DOE *

* Standards

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Cost of Conserved Energy: Residential and Commercial Electricity

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Advanced Technologies Provide for Additional Energy Efficiency

• Solid state lighting• Advanced windows• Integrated cooling systems• Sensors and controls• Low-energy and zero-net energy new homes• Low-energy new commercial buildings

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Recent New DOE Programs Relevant to Buildings

• ARPA – E– Building Energy Efficiency Through Innovative

Thermo Devices– Power Electronics

• HUB: Improved Energy Efficient Building Systems Designs

• Homestar• Retrofit Ramp-up• Smart Grid – ARRA Grants

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U.S. Transportation Energy Consumption by Mode

Source: American Physical Society (2008)

Energy Price Volatility: An Recent Illustration

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Fuel Economy of U.S. Light Duty Vehicles and Trucks (1975-2005)

Source: American Physical Society (2008)

Class 6 to 8 trucks

Light Duty Vehicles Dominate the U.S. Vehicle Fleet

Class of Vehicle Type of Vehicle

Cars 137 53.7%Light Trucks 101 39.6%

Heavy Trucks 7 2.7%Other Trucks 2 0.8%

Motorcycles 8 3.1% 8 3.1%100.0%

3.5%

93.3%

Number of Vehicles (millions)

Number of Vehicles (millions)

Light Duty Vehicles

Medium & Heavy Duty

Total 255 255All

238

9

100.0%

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Relative Fuel Consumption of Future Cars by Power Train

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Plausible Shares of Advanced Light-Duty Vehicles in the New Vehicle Market by 2020

and 2035

Propulsion System 2020 2035Turbocharged Gasoline SI 15-25% 25-35%Diesels 6-12% 10-20%Gasoline Hybrids 10-15% 15-40%Plug-in Hybrids 1-3% 7-15%Hydrogen Fuel Cell Vehicles 0-1% 3-6%Battery Electric Vehicles 0-2% 3-10%

Plausible LDV Market Share by

The Potential for Energy Efficiency Improvements in Large Vehicles is Very Large

29Source: Technologies and Approaches to Reducing the Fuel Consumption of Medium- and Heavy-Duty Vehicles, NRC, 2010

Costs to Achieve Fuel Economy Improvement

30Source: Technologies and Approaches to Reducing the Fuel Consumption of Medium- and Heavy-Duty Vehicles, NRC, 2010

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Total Energy Use in the Industrial Sector (2004)

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Estimated Energy Savings Due to Energy Efficiency Improvements

(quads)

INDUSTRY

ENERGY USE IN INDUSTRY SAVINGS OVER BAU IN 2020(1),(2)

2007

BAU PROJECTION (DOE/EIA REFERENCE CASE)

SAVINGS IN 2020(1),(2)2020 2030Petroleum Refining

4.09 6.07 7.27 0.77 – 2.81

Iron & Steel 1.38 1.36 1.29 0.21 – 0.76Cement 0.44 0.43 0.41 0.04 – 0.39Bulk Chemicals 6.85 6.08 5.60 0.30

Pulp & Paper 2.15 2.31 2.49 0.53 – 0.85Total Savings – All industries (including those not shown)

4.9 – 7.7(3)

14% - 22%

NOTES(1) Based on a review of studies for specific major energy-using industries, for industrial combined heat and power (CHP), and for industry as a whole.(2) Savings shown are for cost-effective technologies, defined as those providing an internal rate-of-return of at least 10%.(3) Includes 0.7 – 2.0 quads from CHP systems.

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Cross-sectoral Technologies to Provide Additional Savings

• Combined heat and power• Materials, nanotechnology• Alternative feedstocks• Steam and process heat• Separation• Sensors and controls

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Barriers to Adopting Energy Efficient Technologies

• Price of energy• Lack of information• Capital availability• Fiscal and regulatory policies• Ownership• Technical risk• Human and psychological factors

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Estimates of Energy Savings from Major Energy-Efficiency Policies and Programs

Policy or program

Electricity savings

(TWh/yr)

Primary energy savings

(Quads/yr) YearCAFÉ vehicle efficiencystandards -- 4.80 2006Appliance efficiencystandards 196 2.58 2006PURPA and other CHPinitiatives -- 1.62 2006ENERY STAR labeling andpromotion 132 1.52 2006Building energy codes -- 1.08 2006Utility and state end-useefficiency programs 90 1.06 2006DOE industrial efficiencyprograms -- 0.40 2005Weatherization assistanceprogram -- 0.14 2006Federal energy managementprogram -- 0.11 2005

TOTAL -- 13.32 --

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Per Capita Electricity Consumption in California, New York, and U.S. (1990-2006)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,0001

96

0

19

62

19

64

19

66

19

68

19

70

19

72

19

74

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

kW

h/p

ers

on

United States

California

Per Capita Income in Constant 2000 $1975 2005 % change

US GDP/capita 16,241 31,442 94%Cal GSP/capita 18,760 33,536 79%

New York

Policies and Programs Can Overcome Barriers

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Summary of Overarching Findings

1. Deployment of energy efficiency technologies is the nearest term and lowest cost option.

2. Savings in electricity from buildings could eliminate the need to add to electricity generation through 2030.

3. Barriers to improving energy efficiency are formidable, need sustained initiative, experience from states.

4. Long-lived capital stock and infrastructure can “lock in” pattern of energy use for decades.

Recent Relevant Academy Reports

America’s Energy Future

America’s Climate Choices

TRB Special Report 298: Driving and the Built Environment

Technologies and Approaches to Reducing the Fuel Consumption of Medium and Heavy-Duty Vehicles

www.nationalacademies.org38

2020 2030 2020 2030Buildings, primary (source) electricity 9.4 14.4 9.4 14.4

Residential 4.4 6.4 4.4 6.4Commercial 5.0 8.0 5.0 8.0

Buildings, natural gas 2.4 3.0 2.4 3.0Residential 1.5 1.5 1.5 1.5Commercial 0.9 1.5 0.9 1.5

Transportation, light duty vehicles 2.0 8.2 2.6 10.7

Industry, manufacturing 4.9 4.9 7.7 7.7

Total 18.6 30.5 22.1 35.8

Conservative Optimistic

NOTE: Savings are relative to the reference scenario of the EIA’s 2008 Annual Energy Outlook or, for transportation, a similar scenario developed by the panel.

Potential for Cost-Effective Annual U.S. Energy Savings (quadrillions of Btus)

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