12.22.09 - EIA Energy Outlook 2010

8/7/2019 12.22.09 - EIA Energy Outlook 2010

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Richard Newell, SAIS, December 14, 2009 1

The Paul H. Nitze School of Advanced International StudiesDecember 14, 2009

Washington, DC

Richard Newell, Administrator

Annual Energy Outlook 2010Reference Case


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Generally assumes current laws and regulations provisions sunset if specified (e.g., renewable tax credits expire)

excludes potential future laws and regulations (e.g., proposedgreenhouse gas legislation is not included)

some grey areas

adopts proposed regulations that are not yet final, in order to

inform the likely implementation of a statute adds a premium to the capital cost of CO2-intensive technologies

to reflect market behavior regarding possible CO2 regulation

assumes implementation of existing regulations that enable

building new energy infrastructure and resource extraction Includes technologies that are commercial or reasonably

expected to become commercial in the next decade or so includes cost and efficiency improvements from learning, but not

revolutionary or breakthrough technologies

How does the AEO2010reference case handlepublic policy and technology?


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Extended projection period to 2035

Changes in Federal and State laws and regulations

revised handling of fuel economy standards to reflect the proposalfor light-duty vehicles in model years 2012-2016

assumes permission will be granted to extend nuclear power unitoperating licenses beyond 60 years; no retirements through 2035

Revised capital costs for capital-intensive projects

overnight costs for nuclear and coal power up 10-20%

Changes to assumptions about oil and gas resource base

updated characterization of natural gas shales, reflecting evolutionof shale gas resources and technology

new lower-48 onshore oil and gas supply submodule

Key updates included in the AEO2010reference case


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0

2550

75

100125

150

175200

225

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Oil prices in the reference case rise steadily; the fullAEO2010will include a wide range of prices

2008 dollars per barrel

Source: Annual Energy Outlook 2010

High oil price

Low oil price

AEO2010reference

ProjectionsHistory

AEO2009reference


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0

1

2

3

4

5

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Oil to natural gas price ratio remains high over the projection

ProjectionsHistory

0

5

10

15

20

25

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Oil and natural gas prices


Crude oil

U.S. natural gas wellhead

Ratio of oil price to natural gas price2008 dollars per million Btu


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0

20

40

60

80

100

120

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Non-fossil energy use grows rapidly, but fossil fuels stillprovide 78 percent of total energy use in 2035

quadrillion Btu

Coal

Liquid fuels

Natural gas

ProjectionsHistory

Nuclear

Liquid biofuels

Renewables (excluding liquid biofuels)




0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Energy and CO2 per dollar GDP continue to decline;per capita energy use also declines

index, 2005=1

Energy per capita

Energy per dollar GDP

ProjectionsHistory

CO2 per dollar GDP




0

50

100

150

200

2005 2010 2015 2020 2025 2030 2035

Energy efficiency gains reduce consumption 15% from where itwould otherwise be; structural change is even larger

Constant efficiency

Constant intensity

Efficiencychange

Structuralchange

AEO2010reference case

192

133

115

quadrillion Btu




0

5

10

15

20

25

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

U.S. reliance on imported liquid fuels is reduced by increaseddomestic production and greater fuel efficiency

million barrels per day

Consumption

Production

Net imports

ProjectionsHistory


Updated AEO2009reference case

40% 45%

57%60%




0

5

10

15

20

25

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Biofuels meet most of the growth in liquid fuels supply

million barrels per day

ProjectionsHistory

Natural gas plant liquids

Biofuels including imports

Petroleum supply

Net petroleum imports




billion gallon-equivalents

0

510

15

20

25

30

35

40

45

2008 2022 2022 in

AEO2009

2035

Biofuels grow, but fall short of the 36 billion gallon RFStarget in 2022, exceed it in 2035

Legislated RFS in 2022

RFS withadjustments underCAA Sec.211(o)(7)

Biodiesel

Otherfeedstocks

Biomass-to-liquids

Net ethanolimports

Cellulosicethanol

Corn ethanol

Renewablediesel




0

5

10

15

20

25

30

35

40

45

2000 2005 2010 2015 2020 2025 2030 2035

History

AEO2010

Updated

New light duty vehicle efficiency reaches 40 mpg by 2035

miles per gallon





millions

0

1

2

3

4

5

6

7

89

10

2000 2008 2015 2020 2025 2030 2035

Electric/fuel cell

Plug-in hybrid electric

Hybrid electric

Mild hybrid electricGaseous

Flex fuel

Diesel

Mild and full hybrid systems dominate new light-dutyvehicle sales by 2035

ProjectionsHistory



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0

2

4

6

8

10

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Natural gas wellhead price is projected to rise from low levelsexperienced during 2008-2009 recession

2008 dollars per thousand cubic feet

ProjectionsHistory





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10

15

20

25

30

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Import share of natural gas supply declines as domesticsupply grows

trillion cubic feet

Consumption

Domestic supply

Net imports

ProjectionsHistory



2%6%

13%



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0

5

10

15

20

25

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Shale gas and Alaska production offset declines in supply tomeet consumption growth and lower import needs

trillion cubic feet

Alaska

Non-associated offshore

ProjectionsHistory

Associated with oil

Coalbed methane

Net imports

Non-associated onshore

Shale gas



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-2

0

2

4

6

8

10

12

14

1950 1960 1970 1980 1990 2000 2010 2020 2030

Growth in electricity use continues to slow

3-year rolling average percent growth

Projections

History

Period Annual Growth

1950s 9.8

1960s 7.3

1970s 4.7

1980s 2.9

1990s 2.4

2000-2008 0.9

2008-2035 1.0

StructuralChangeinEconomy-Higher

prices-Standards-Improvedefficiency



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Natural gas and renewables account for the majority ofcapacity additions from 2008 to 2035

Coal312 (31%)

Natural gas338 (33%)

Hydropower*99 (10%)

Nuclear101 (10%)

Otherrenewables

40 (4%)

Other119 (12%)

* Includes pumped storage

Coal31 (12%)

Natural gas

116 (46%)

Hydropower*1 (0.4%)

Nuclear8 (3%)

Otherrenewables

92 (37%)

Other2 (1%)

2008 capacity Capacity additions2008 to 2035

1,008gigawatts

250

gigawatts



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Renewables gain electricity market share; coal share declines

0

1,000

2,000

3,000

4,000

5,000

6,000

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

billion kilowatthours and percent shares

Natural gas

Renewable

ProjectionsHistory

Nuclear

Oil and other

Coal48.5 43.8

21.4

20.8

19.6 17.1

9.1

17.0

1.41.5



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0

100

200

300

400

500

600

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Nonhydropower renewable sources meet 41% of totalelectricity generation growth from 2008 to 2035

billion kilowatthours

Wind

ProjectionsHistory

Solar

Biomass

Geothermal

Waste



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0.3% per year

8.7% growth

Assuming no new policies, growth in energy-related CO2 isdriven by electricity and transportation fuel use

Transportation1,925 (33%)

Buildings andIndustrial

1,530 (26%)

Electric Power2,359 (41%)

2008

5,814

million metrictons

2035

6,320

million metrictons

Transportation

2,115 (33%)

Buildings andIndustrial

1,571 (25%)

Electric Power2,634 (42%)



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Recent Federal and State policies, and rising energyprices, moderate growth in energy consumption and shiftit to renewable fuels

U.S. oil use remains near its present level through 2035

growth in overall liquids demand is met by biofuels, and ethanol

accounts for >17% of gasoline consumption by 2035

U.S. reliance on imported oil as a share of U.S. liquids use,

declines to 45% over the next 25 years

Shale gas provides the majority of growth in gas supply Energy-related CO2 emissions grow 0.3% per year,

absent any new policies to limit emissions

Key results from the AEO2010reference case


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Richard Newell SAIS December 14 2009 24

For more information

U.S. Energy Information Administration home page www.eia.gov

Short-Term Energy Outlook www.eia.gov/emeu/steo/pub/contents.html

Annual Energy Outlook www.eia.gov/oiaf/aeo/index.html

International Energy Outlook www.eia.gov/oiaf/ieo/index.html

Monthly Energy Review www.eia.gov/emeu/mer/contents.html

U.S. Energy Information Administrationwww.eia.gov

12.22.09 - EIA Energy Outlook 2010

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