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Annual Energy Outlook 2013 Early Release Reference Case

Annual Energy Outlook 2013 Early Release Reference Case. AEO2013 Early Release Rollout Presentation Paul H. Nitze School of Advanced International Studies Johns Hopkins University December 5, 2012 | Washington, D.C. by Adam Sieminski, Administrator.

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Annual Energy Outlook 2013 Early Release Reference Case

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  1. Annual Energy Outlook 2013Early Release Reference Case AEO2013 Early Release Rollout Presentation Paul H. Nitze School of Advanced International Studies Johns Hopkins University December 5, 2012 | Washington, D.C. by Adam Sieminski, Administrator

  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 Adam Sieminski AEO2013, December 5, 2012

  3. What is included (and excluded) in developing EIA’s “Reference case” projections? • 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 Adam Sieminski AEO2013, December 5, 2012

  4. Growth in energy production outstrips growth in consumption leading to reduction in net imports U.S. energy production and consumption quadrillion Btu Source: EIA, Annual Energy Outlook 2013 Early Release History Projections 2035 2011 Consumption 9% 10% 19% Net imports Production Adam Sieminski AEO2013, December 5, 2012

  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 Source: EIA, Annual Energy Outlook 2013 Early Release Shares of total U.S. production History Projections 2011 35% Natural gas 30% 14% Renewables 12% 17% Crude oil and natural gas plant liquids 19% 24% Coal 28% 10% 11% Nuclear Adam Sieminski AEO2013, December 5, 2012

  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 Source: EIA, Annual Energy Outlook 2013 Early Release Shares of total U.S. energy History Projections 2000 2011 28% Natural gas 24% 26% 11% 6% 8% Renewables (excluding liquid biofuels) 8% 9% 8% Nuclear 2% 1% 23% Liquid biofuels 19% 20% Coal 39% 36% 32% Oil and other liquids Adam Sieminski AEO2013, December 5, 2012

  7. U.S. energy use is slowed by rising energy prices and the adoption of new efficiency standards for vehicles U.S. primary energy consumption quadrillion Btu Source: EIA, Annual Energy Outlook 2013 Early Release Shares of total U.S. energy History Projections 2011 11% Industrial: electricity 11% 23% Industrial 21% 15% 14% Commercial: electricity 4% 4% Commercial 16% 15% Residential: electricity 7% 5% Residential 25% 28% Transportation Adam Sieminski AEO2013, December 5, 2012

  8. Energy and CO2 per dollar of GDP continue to decline; per-capita energy use also declines Energy and emission intensity index, 2005=1 Source: EIA, Annual Energy Outlook 2013 Early Release 2005 2011 History Projections Energy use per capita Energy use per 2005 dollar of GDP Carbon dioxide emissions per 2005 dollar of GDP Adam Sieminski AEO2013, December 5, 2012

  9. In the AEO2013 Reference case, energy-related CO2 emissions never get back to their 2005 level Carbon dioxide emissions billion metric tons Source: EIA, Annual Energy Outlook 2013 Early Release History Projections 2005 2011 AEO2013 Adam Sieminski AEO2013, December 5, 2012

  10. Petroleum and other liquid supply Adam Sieminski AEO2013, December 5, 2012

  11. Reference case oil price initially drops and then rises steadily, but there is uncertainty about the future trajectory Annual average spot price of Brent crude oil 2011 dollars per barrel Source: EIA, Annual Energy Outlook 2013 Early Release 2011 History Projections High Oil Price Reference Low Oil Price Adam Sieminski AEO2013, December 5, 2012

  12. Global liquids supply increases 26 percent with regional market shares relatively stable Global liquids supply million barrels per day Source: EIA, Annual Energy Outlook 2013 Early Release History Projections 2011 44% OPEC 40% 31% Other non-OECD 34% 25% OECD 26% Adam Sieminski AEO2013, December 5, 2012

  13. U.S. dependence on imported liquids declines U.S. liquid fuel supply million barrels per day Source: EIA, Annual Energy Outlook 2013 Early Release History Projections 2011 2005 2035 Consumption 37% 37% 45% 60% Net imports Domestic supply Adam Sieminski AEO2013, December 5, 2012

  14. 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 Source: EIA, Annual Energy Outlook 2013 Early Release History Projections 2011 Biofuels excluding imports 12% Natural gas plant liquids 17% 5% 7% 38% 1% Liquids from natural gas and coal 38% Petroleum production Net petroleum and biofuel imports 45% 37% Adam Sieminski AEO2013, December 5, 2012

  15. 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 Source: EIA, Annual Energy Outlook 2013 Early Release History Projections 2011 Tight oil Other lower 48 onshore Lower 48 offshore Alaska Adam Sieminski AEO2013, December 5, 2012

  16. Light-duty vehicle liquids consumption is lower primarily due to more stringent CAFE standards Light-duty vehicle liquids consumption million barrels per day Source: EIA, Annual Energy Outlook 2013 Early Release AEO2012 AEO2013 Adam Sieminski AEO2013, December 5, 2012

  17. Transportation sector motor gasoline demand declines Transportation energy consumption by fuel quadrillion Btu Source: EIA, Annual Energy Outlook 2013 Early Release History Projections 2011 22% Diesel 29% CNG/LNG 11% 4% 4% Jet fuel 13% 2% E85 Other 1% 4% 3% Pipeline fuel 60% Motor gasoline 47% Adam Sieminski AEO2013, December 5, 2012

  18. Biofuels grow at a slower rate due to lower crude oil prices and slower growth in E85 sales Renewable fuel standard credits billions ethanol-equivalent gallons Sources: EIA, Annual Energy Outlook 2013 Early Release and EIA, Annual Energy Outlook 2012 Legislated RFS in 2022 Biodiesel Net imports RFS with adjustments under CAA Sec.211(o)(7) Other Advanced Cellulosic biofuels Corn ethanol 2011 2022 2035 2040 Adam Sieminski AEO2013, December 5, 2012

  19. Natural gas Adam Sieminski AEO2013, December 5, 2012

  20. Coal regains some competitive advantage relative to natural gas over time on a national average basis ratio of natural gas price to steam coal price Source: EIA, Annual Energy Outlook 2013 Early Release Energy prices to the electric power sector 2011 dollars per Btu 2011 History 2011 Projections Natural gas Coal Competitive parity Projections History Adam Sieminski AEO2013, December 5, 2012

  21. 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 Source: EIA, Annual Energy Outlook 2013 Early Release History Projections 2011 Consumption Domestic supply Net imports Adam Sieminski AEO2013, December 5, 2012

  22. Shale gas production leads growth in production through 2040 U.S. dry natural gas production trillion cubic feet Source: EIA, Annual Energy Outlook 2013 Early Release History Projections 2011 Shale gas Tight gas Non-associated offshore Alaska Coalbed methane Associated with oil Non-associated onshore Adam Sieminski AEO2013, December 5, 2012

  23. Total natural gas exports nearly quadruple by 2040 in the AEO2013 Reference case U.S. natural gas exports trillion cubic feet Source: EIA, Annual Energy Outlook 2013 Early Release Exports to Mexico Exports to Canada Lower 48 LNG exports Alaska LNG exports Adam Sieminski AEO2013, December 5, 2012

  24. Natural gas consumption is quite dispersed with electric power, industrial, and transportation use driving future demand growth U.S. dry gas consumption trillion cubic feet Source: EIA, Annual Energy Outlook 2013 Early Release History Projections *Includes combined heat-and-power and lease and plant fuel. **Includes pipeline fuel. Electric power 32% 31% Industrial* 33% 33% 2% Gas to liquids 6% 3% Transportation** 13% 12% Commercial 19% 14% Residential Adam Sieminski AEO2013, December 5, 2012

  25. Industrial natural gas usage grows, especially before 2025 Industrial natural gas consumption quadrillion Btu Source: EIA, Annual Energy Outlook 2013 Early Release Adam Sieminski AEO2013, December 5, 2012

  26. Electricity Adam Sieminski AEO2013, December 5, 2012

  27. Growth in electricity use slows, but still increases by 28% from 2012 to 2040 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 U.S. electricity use percent growth (3-year rolling average) Source: EIA, Annual Energy Outlook 2013 Early Release History 2011 Projections Structural Change in Economy - Higher prices - Standards - Improved efficiency Adam Sieminski AEO2013, December 5, 2012

  28. 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 Source: EIA, Annual Energy Outlook 2013 Early Release History Projections 1993 2011 30% Natural gas 25% 16% Renewables 13% 13% 11% 19% 17% Nuclear 19% 35% 42% 53% Coal Oil and other liquids 4% 1% 1% Adam Sieminski AEO2013, December 5, 2012

  29. Non-hydro renewable generation more than doubles between 2011 and 2040 Non-hydropower renewable generation billion kilowatthours per year Source: EIA, Annual Energy Outlook 2013 Early Release History Projections 2011 Advanced biofuels cogeneration (not visible) Wind Biomass Power sector Industrial CHP Solar Geothermal Waste Adam Sieminski AEO2013, December 5, 2012

  30. 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 Adam Sieminski AEO2013, December 5, 2012

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