The Energy Information Administration’s Outlook of Energy Supply and Demand The Future of Fuel: Toward the Next Decade of U.S. Energy Policy Resources For the Future November 28, 2012 | Washington, DC Michael Schaal Director, Office of Petroleum, Natural Gas and Biofuels Analysis U.S. Energy Information Administration Independent Statistics & Analysis www.eia.gov
What’s included in EIA’s Reference Case? • Generally assumes current laws and regulations • Some grey areas regarding potential legislation • Includes technologies that are commercial or reasonably expected to become commercial • Assumptions to the AEO are also available at eia.gov/forecasts/aeo/assumptions Michael Schaal 2 RFF, Washington, D.C., November 28, 2012
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 Shares of total U.S. energy quadrillion Btu per year History 2010 Projections Renewables (excluding liquid biofuels) 7% 11% 4% 1% Liquid biofuels 25% 26% Natural gas 9% Nuclear 9% 21% Coal 20% 37% Oil and other liquids 32% Source: EIA, Annual Energy Outlook 2012 Michael Schaal 3 RFF, Washington, D.C., November 28, 2012
Energy and CO 2 per dollar of GDP continue to decline; per-capita energy use also declines index, 2005=1 History 2010 Projections 1.75 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 Michael Schaal 4 RFF, Washington, D.C., November 28, 2012
Shale gas offsets declines in other U.S. natural gas production sources U.S. dry gas production trillion cubic feet per year History Projections 2010 49% Shale gas 23% 26% Tight gas 22% 9% Non-associated offshore 2% 9% 7% Coalbed methane 10% Alaska 1% 6% Associated with oil 6% 21% Non-associated onshore 9% Source: EIA, Annual Energy Outlook 2012 Michael Schaal RFF, Washington, D.C., November 28, 2012 5
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 History 2010 Projections 5% Biofuels including imports 12% 10% Natural gas plant liquids 15% 36% Petroleum production 36% Liquids from coal 1% 49% Net petroleum imports 36% Source: EIA, Annual Energy Outlook 2012 Energy Information Administration 6 AEO2012, June 2012
While total electricity generation grows by 21% over the projection, the annual rate of growth slows percent growth (3-year rolling average) Period Annual Growth History 1950s 9.8 2010 1960s 7.3 1970s 4.7 1980s 2.9 1990s 2.4 2000-2010 1.0 2010-2035 0.8 Projections Source: EIA, Annual Energy Outlook 2012 Michael Schaal 7 RFF, Washington, D.C., November 28, 2012
Electricity mix gradually shifts to lower-carbon options, led by growth in renewables and natural gas electricity net generation trillion kilowatthours per year 2010 28% Natural gas 24% 15% Renewables 10% 18% 20% Nuclear 45% 38% Coal Oil and other liquids 1% 1% Source: EIA, Annual Energy Outlook 2012 Michael Schaal 8 RFF, Washington, D.C., November 28, 2012
Non-hydro renewable sources more than double between 2010 and 2035 non-hydropower renewable generation billion kilowatthours per year 2010 Advanced biofuels cogeneration Biomass Power sector Industrial CHP Wind Solar Geothermal Waste Source: EIA, Annual Energy Outlook 2012 Michael Schaal 9 RFF, Washington, D.C., November 28, 2012
Assuming no new policies, energy-related CO2 grows by 2% through 2035 2010 2035 Buildings and Buildings and Industrial Electric Power Industrial 1,527 (27%) 2,330 (41%) Electric Power 1,492 (26%) 2,271 (40%) 5,639 5,728 million metric million metric tons tons 2% growth Transportation Transportation 1,871 (33%) 1,876 (33%) Source: Annual Energy Outlook 2012 Michael Schaal 10 RFF, Washington, D.C., November 28, 2012
For more information U.S. Energy Information Administration home page | www.eia.gov Short-Term Energy Outlook | www.eia.gov/steo Annual Energy Outlook | www.eia.gov/aeo International Energy Outlook | www.eia.gov/ieo Monthly Energy Review | www.eia.gov/mer Today in Energy | www.eia.gov/todayinenergy EIA Information Center (202) 586-8800 InfoCtr@eia.gov 24-hour automated information line about EIA Our average response time is within three and frequently asked questions. business days. Michael Schaal RFF, Washington, D.C., November 28, 2012 11
Backup Slides Energy Information Administration 12 AEO2012, June 2012
Policy Change Possibilities • Greenhouse gas legislation • Renewable fuels standards • Production Tax Credit • Appliance efficiency standards • Corporate Average Fuel Economy standards • Investment tax credits Michael Schaal RFF, Washington, D.C., November 28, 2012 13
AEO 2012 Scenarios •Reference •High and low economic growth (2) •High and low oil price (2) •Demand sector technology cases (2011, High, and Buildings Best Available) (3) •Integrated high and low technology (applied to demand sectors; renewable; and electric power and refinery sector fossil; and nuclear) (2) •High and low coal cost (2) •High and low estimated ultimate recovery cases and high technically recoverable resources (3) •High and low nuclear (2) •Low renewable cost (1) Liquid Fuels Market Module (1) •Policy related: Extended Policy, No Sunset, carbon dioxide allowance fee ($15 and $25), and 5 -year investment recovery with reference and with low natural gas prices (7) •Proposed light -duty vehicle CAFE standards; advanced battery technology; heavy-duty truck natural gas potential (3) Michael Schaal RFF, Washington, D.C., November 28, 2012 14
U.S. dependence on imported petroleum continues to decline U.S. liquid fuel supply million barrels per day History Projections 2005 2010 Consumption 36% 60% 49% Net petroleum imports Domestic supply Source: EIA, Annual Energy Outlook 2012 Michael Schaal RFF, Washington, D.C., November 28, 2012 15
New light duty vehicle fuel economy reaches almost 38 mpg by 2035 in the Reference case, which does not include proposed standards for MY2017 to MY2025 vehicles miles per gallon History Projections 2010 Summary of standards 2012-2016: 34.1 mpg CAFE average (based on NHTSA vehicle footprint sales distribution) 2020: 35 mpg by statute 2017-2025: Reference case does not include proposed rulemaking from December 2011 Source: EIA, Annual Energy Outlook 2012 Michael Schaal RFF, Washington, D.C., November 28, 2012 16
Gasoline-only vehicles without hybrid technologies decline as a share of new vehicle sales U.S. light car and truck sales millions Source: EIA, Annual Energy Outlook 2012 Michael Schaal 17 RFF, Washington, D.C., November 28, 2012
U.S. imports of liquid fuels fall due to increased domestic production – including biofuels – and greater efficiency U.S. liquid fuels consumption million barrels per day 2025 2035 21 Net petroleum 18 imports 15 49% Domestic 12 petroleum supply 9 36% 6 Natural gas plant liquids 3 Biofuels 10% including imports 5% 0 Other non- 2010 Low High High Low High High petroleum Reference Reference supply EUR EUR TRR EUR EUR TRR Source: EIA, Annual Energy Outlook 2012 Michael Schaal RFF, Washington, D.C., November 28, 2012 18
Biofuels grow, but fall short of RFS target in 2022, exceed it in 2035 billions ethanol-equivalent gallons 45 40 Legislated RFS in 2022 Biodiesel 35 Net imports Other Advanced 30 Cellulosic biofuels 25 20 15 10 Corn ethanol 5 0 2010 2022 2035 Source: EIA, Annual Energy Outlook 2012 Michael Schaal RFF, Washington, D.C., November 28, 2012 19
Success in the Barnett prompted companies to look at other shale formations in the U.S. Michael Schaal RFF, Washington, D.C., November 28, 2012 20
Domestic production of shale gas and tight oil has grown dramatically over the past few years shale gas production (dry) tight oil production for select plays billion cubic feet per day million barrels of oil per day 1.6 30 Eagle Ford 1.4 Rest of US 25 Bakken Bakken 1.2 Granite Wash Eagle Ford 20 Bone Spring Marcellus 1.0 Monterey Haynesville Woodford 0.8 15 Woodford Niobrara Fayetteville 0.6 Spraberry 10 Barnett Austin Chalk 0.4 Antrim 5 0.2 0 0.0 2000 2002 2004 2006 2008 2010 2012 2000 2002 2004 2006 2008 2010 2012 Sources shale gas: LCI Energy Insight gross withdrawal estimates as of September 2012 and converted to dry production estimates with EIA-calculated average gross-to-dry shrinkage factors by state and/or shale play. Source tight oil: Drilling Info (formerly HPDI), Texas RRC, North Dakota department of mineral resources, and EIA, through June 2012. Michael Schaal 21 3 rd Annual Bakken Summit, Denver, CO , October 24 th , 2012
Domestic natural gas production grows faster than consumption U.S. dry gas trillion cubic feet per year History Projections 2010 30 25 Consumption 20 Domestic supply 15 10 5 Net imports 0 -5 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 Source: EIA, Annual Energy Outlook 2012 Michael Schaal 22 RFF, Washington, D.C., November 28, 2012
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