annual energy outlook 2013 -...

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”

2

• 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

4

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


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

6

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



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



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

8

Carbon dioxide emissions

billion metric tons


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

9

J. Alan Beamon

AEO2013, May 21, 2013

U.S. dependence on imported liquids declines

10

U.S. liquid fuel supply

million barrels per day


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

11

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



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



Tight oil

Alaska

Other lower 48 onshore

Lower 48 offshore


J. Alan Beamon

AEO2013, May 21, 2013

Natural gas

13

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

14

-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



Consumption

Domestic supply

Net imports

J. Alan Beamon

AEO2013, May 21, 2013

Shale gas production leads growth in production through 2040

15

U.S. dry natural gas production

trillion cubic feet


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


J. Alan Beamon

AEO2013, May 21, 2013

Electricity

16

J. Alan Beamon

AEO2013, May 21, 2013

Growth in electricity use slows, but still increases by 28% from

2012 to 2040

17

U.S. electricity use

percent growth (3-year rolling average)


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

18

-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)


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

19

U.S. electricity net generation

trillion kilowatthours


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

20

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

22

• 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

23

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


J. Alan Beamon

AEO2013, May 21, 2013

Reference

Annual average coal prices to power plants in alternative cases

24

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


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

26

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


History Projections

Reference

High Resource

Low Resource

J. Alan Beamon

AEO2013, May 21, 2013

Energy-Related CO2 Emissions with Alternative Coal Prices

27

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



History Projections

Reference

Low Cost Coal

High Cost Coal

J. Alan Beamon

AEO2013, May 21, 2013

Economic Growth Path and Energy-Related CO2 Emissions

28

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



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

29

0

500

1000

1500

2000

2500

3000

2000 2005 2010 2015 2020 2025 2030 2035 2040

Billion kilowatthours


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



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

http://www.eia.gov/

http://www.eia.gov/forecasts/aeo

http://www.eia.gov/forecasts/steo

http://www.eia.gov/forecasts/ieo

http://www.eia.gov/todayinenergy

http://www.eia.gov/totalenergy/data/monthly

http://www.eia.gov/totalenergy/data/annual

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

annual energy outlook 2013 -...

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