annual energy outlook 2017 - energy information administration · source: eia, annual energy...

www.eia.govU.S. Energy Information Administration Independent Statistics & Analysis

Annual Energy Outlook 2017

AEO2017 Rollout PresentationJohns Hopkins School of Advanced International StudiesJanuary 5, 2017 | Washington, D.C.

ByAdam Sieminski, Administrator

Key takeaways from AEO2017• With strong domestic production and relatively flat demand, the United States becomes a net

energy exporter over the projection period in most cases

• U.S. crude oil production rebounds from recent lows, driven by continued development of tight oil resources; with consumption flat to down compared to recent history, net crude oil and petroleum product imports as a percentage of U.S. product supplied decline across most cases

• Across most cases, natural gas production increases despite relatively low and stable natural gas prices, supporting higher levels of domestic consumption and natural gas exports; projections are sensitive to resource and technology assumptions

• With modest demand growth, the primary driver for new electricity generation capacity in the Reference case is the retirement of older, less efficient fossil fuel units, largely spurred by the Clean Power Plan (CPP), and the near-term availability of renewable tax credits; even if the CPP is not implemented, low natural gas prices and the tax credits result in natural gas and renewables as the primary sources of new generation capacity; the future generation mix is sensitive to the price of natural gas and the growth in electricity demand

2Adam Sieminski, Johns Hopkins SAIS January 5, 2017

Key takeaways from AEO2017 (continued)• Transportation energy consumption peaks in 2018 in the Reference case because rising fuel

efficiency outweighs increases in total travel and freight movements throughout the projection period

• Despite growth in the number of households and the amount of commercial floorspace, improved equipment and efficiency standards contribute to residential and commercial consumption remaining relatively flat or declining slightly from 2016 to 2040 in the Reference case

• With economic growth and relatively low energy prices, energy consumption in EIA’s three industrial sub-sectors (energy-intensive manufacturing, non-energy-intensive manufacturing, and nonmanufacturing) increases during the projection period across all cases; energy intensity declines in the Reference case and most side cases as a result of technological improvements


Overview


AEO2017 includes side cases with different assumptions of macroeconomic growth, world oil prices, technological progress, and energy policies• Oil prices are primarily driven by global market balances that are mainly influenced by factors external to the NEMS

model; in the High Oil Price case, the price of Brent crude in 2016 dollars reaches $226 per barrel (b) by 2040, compared to $109/b in the Reference case and $43/b in the Low Oil Price case

• In the High Oil and Gas Resource and Technology case, lower costs and higher resource availability than in the Reference case allow for higher production at lower prices; in the Low Oil and Gas Resource and Technology case, more pessimistic assumptions about resources and costs are applied

• The effects of economic assumptions on energy consumption are addressed in the High and Low Economic Growth cases, which assume compound annual growth rates for U.S. gross domestic product of 2.6% and 1.6%, respectively, from 2016–40, compared with 2.2% annual growth in the Reference case

• A case assuming that the Clean Power Plan (CPP) is not implemented can be compared to the Reference case to show how that policy could affect energy markets and emissions

• Although the graphics in this presentation focus on projections through 2040, this AEO is the first projection to include model results through 2050, which are available on the AEO page of the EIA website; EIA welcomes feedback on the assumptions and results from the period 2040–50


Total energy consumptionquadrillion British thermal units

Energy consumption varies minimally across all AEO cases, bounded by the High and Low Economic Growth cases

Source: EIA, Annual Energy Outlook 2017

0

20

40

60

80

100

120

140

1980 1990 2000 2010 2020 2030 2040

2016history projections High Economic

GrowthLow Oil PriceHigh Oil PriceHigh Oil and Gas Resource and TechnologyReference Low Oil and Gas Resource and Technology Low Economic Growth


0

5

10

15

20

25

30

35

40

45

1980 1990 2000 2010 2020 2030 2040

petroleum and other liquidsnatural gas

other renewable energycoalnuclearhydroliquid biofuels

2016history projections

Energy consumption (Reference case)quadrillion British thermal units

Domestic energy consumption remains relatively flat in the Reference case, but the fuel mix changes significantly



0

20

40

60

80

100

120

140

1980 1990 2000 2010 2020 2030 2040

High Oil and Gas Resource and Technology High Oil PriceHigh Economic GrowthReference Low Economic GrowthLow Oil PriceLow Oil and Gas Resource and Technology


Total energy productionquadrillion British thermal units

Energy production ranges from nearly flat in the Low Oil and Gas Resource and Technology case, to continued growth in the High Resource and Technology case



0

10

20

30

40

1980 1990 2000 2010 2020 2030 2040

dry natural gas

crude oil and lease condensate

coalother renewablesnuclearnatural gas plant liquidshydro


Energy production (Reference case)quadrillion British thermal units

United States energy production continues to increase in the Reference case, led by growth in natural gas and renewables



-30

-20

-10

0

10

20

30

40

1980 1990 2000 2010 2020 2030 2040

Low Oil PriceLow Oil and Gas Resource and TechnologyHigh Economic GrowthReference caseLow Economic GrowthHigh Oil PriceHigh Oil and Gas Resource and Technology


net imports

net exports

Net energy trade quadrillion British thermal units

The United States becomes a net energy exporter in most cases as petroleum liquid imports fall and natural gas exports rise



0

5

10

15

20

25

30

35

40

1980 1990 2000 2010 2020 2030 2040

Energy trade (Reference case)quadrillion British thermal units

exports

imports


-10

-5

0

5

10

15

20

25

30

1980 1990 2000 2010 2020 2030 2040

Net energy trade (Reference case)quadrillion British thermal units

petroleumand other liquids

electricitycoal and cokenatural gas


net imports

net exports

The United States becomes a net energy exporter in the Reference case projections as natural gas exports increase and petroleum imports decrease



0

1

2

3

4

5

6

7

1980 1990 2000 2010 2020 2030 2040

2016history projections No Clean Power Plan

High Economic GrowthLow Oil PriceHigh Oil and Gas Resource and TechnologyReference caseHigh Oil PriceLow Oil and Gas Resource and Technology Low Economic Growth

Energy-related carbon dioxide emissionsbillion metric tons of carbon dioxide

Energy related carbon dioxide emissions decline in most AEO cases, with the highest emissions projected in the No Clean Power Plan case



0.0

0.5

1.0

1.5

2.0

2.5

3.0

1980 1990 2000 2010 2020 2030 2040

transportation

electric power

industrial

residential

commercial


0.0

0.5

1.0

1.5

2.0

2.5

3.0

1980 1990 2000 2010 2020 2030 2040

petroleum

natural gas

coal



Reference case energy-related carbon dioxide emissions fall, but at a slower rate than in the recent pastU.S. energy-related carbon dioxide emissions (Reference case)billion metric tons of carbon dioxide billion metric tons of carbon dioxide


Although population and economic output per capita are assumed to continue rising, energy intensity and carbon intensity are projected to continue falling in the Reference case

0

50

100

150

200

250

300

350

400

1980 2010 2040

U.S. populationmillion people

2016

history

0

10

20

30

40

50

60

70

80

1980 2010 2040

Gross domestic product per capitathousand dollars/person

2016

history

0

2

4

6

8

10

12

14

1980 2010 2040

Energy intensitythousand British thermal units per dollar

2016

history

0

10

20

30

40

50

60

70

1980 2010 2040

Carbon intensitymetric tons CO2 per billion British thermal units

2016

history

Referencecase



Petroleum and other liquids


0

50

100

150

200

250

2000 2010 2020 2030 2040

North Sea Brent oil price2016 dollars per barrel



Reference case oil prices and production rise from current levels, price paths and production levels in the side cases are very different from those in the Reference case

0

2

4

6

8

10

12

14

16

18

2000 2010 2020 2030 2040


Crude oil productionmillion barrels per day

High Oil and Gas Resource and Technology

High Oil PriceReference case

Low Oil PriceLow Oil and Gas Resource and Technology


Tight oil dominates U.S. production in the Reference case, but other types of oil production continue to yield significant volumes


02468

1012141618

2000 2010 2020 2030 2040

Crude oil production million barrels per day

U.S. total

tight oil

non-tight oil


2020 2030 2040

2016projections

2020 2030 2040

2016projections

Low Oil and Gas Resource and Technology

Reference High Oil and Gas Resource and Technology


-40

-20

0

20

40

60

80

2000 2005 2010 2015 2020 2025 2030 2035 2040

Low Oil PriceLow Oil and GasResource and TechnologyReference

High Oil Price

High Oil and GasResource and Technology

net imports

net exports


Petroleum net imports as a percentage of products suppliedpercent

In the High Oil Price and the High Oil and Gas Resource and Technology cases, the United States becomes a net petroleum exporter



0

10

20

30

40

50

2000 2010 2020 2030 2040

Light-duty stock fleet fuel economymiles per gallon

car

fleetaverage

truck


20%

30%

40%

50%

60%

70%

2000 2010 2020 2030 2040

Light-duty vehicle sales sharespercent

truck

car

0%



Average light-duty fuel economy improves in the Reference case, even as the share of light-duty trucks increases


With the second phase of fuel efficiency regulations, medium- and heavy-duty vehicle energy consumption declines over 2027-33 despite continued growth in miles traveled


050

100150200250300350400450

2000 2020 2040


travel indicatorbillion vehicle-miles traveled

0

2

4

6

8

10

12

2000 2020 2040


stock fuel economymiles per gallon

0

1

2

3

4

5

6

7

2000 2020 2040


energy consumptionquadrillion British thermal units

Medium- and heavy-duty vehicle metrics


0

5

10

15

20

25

30

35

2000 2010 2020 2030 2040

Transportation sector consumption quadrillion British thermal units


motorgasoline

distillatefuel oil

jet fuelelectricityother

0

5

10

15

20

25

30

35

2000 2010 2020 2030 2040

Transportation sector consumptionquadrillion British thermal units


light-duty vehiclesmedium-and heavy-duty vehiclesaircommerciallight trucksrailmarineother


Transportation energy use declines between 2018 and 2034 in the Reference case, driven by improvements in fuel economy


Natural gas


0

10

20

30

40

50

60

2000 2010 2020 2030 2040

U.S. natural gas production by type trillion cubic feet

shale gas and tight oil plays

tight gasother Lower 48 onshoreLower 48 offshoreother



U.S. dry natural gas production is the result of continued development of shale gas and tight oil plays, alternative assumptions cause significant differences


0

10

20

30

40

50

60

2000 2010 2020 2030 2040

Dry natural gas productiontrillion cubic feet

2016history projections High Oil Price

High Oil and Gas Resourceand Technology Reference case Low Oil PriceLow Oil and Gas Resource and Technology

0

20

40

60

80

100

0

5

10

15

20

25

30

35

40

2010 2016 2020 2030 2040

electric power

industrial

transportationcommercial

residential


Natural gas consumption by sector trillion cubic feet billion cubic feet per day

Increasing demand from industrial and electric power markets drive rising domestic consumption of natural gas in the Reference case



Increased natural gas trade is dominated by liquefied natural gas exports in the Reference case

25

-6

-2

2

6

-6

-4

-2

0

2

4

6

8

1980 1990 2000 2010 2020 2030 2040

Natural gas tradetrillion cubic feet


liquefied natural gas (LNG) exports

pipeline exports to CanadaMexico

pipeline imports fromCanadaLNG imports

billion cubic feet per day22

16

10

5

0

-5

-10

-16

Adam Sieminski, Johns Hopkins SAIS January 5, 2017

0

5

10

15

20

25

0

2

4

6

8

10

2000 2010 2020 2030 2040

Liquefied natural gas exportstrillion cubic feet billion cubic feet per day


0

1

2

3

4

5

6

7

8

2000 2010 2020 2030 2040

Oil-to-natural gas price ratioenergy-equivalent terms



U.S. LNG export levels vary across cases and reflect both the level of global demand, as well as by the difference between domestic and global natural gas prices

Reference High and Low Oil and Gas Resource and Technology

High and LowOil Price


0

2

4

6

8

10

12

2000 2010 2020 2030 2040

2016history projections Low Oil and

Gas Resource and TechnologyHigh Oil PriceReference case Low Oil PriceHigh Oil and Gas Resource and Technology

Henry Hub natural gas price2016 dollars per million Btu

Future domestic natural gas prices depend on both domestic resource availability and world energy prices



Electricity


0200400600800

1,0001,2001,4001,6001,800

Electricity use by sector billion kilowatthours

direct use

electricity sales

residential I commercial I Industrial I transportation -2

-1

0

1

2

3

4

5

6

1980 2000 2020 2040

Electricity use growth rate percent growth (three-year rolling average)



Electricity use continues to increase, but the rate of growth remains lower than historic averages in the Reference case


0

500

1,000

1,500

2,000

2,500

1980 1990 2000 2010 2020 2030 2040

U.S. net electricity generation from select fuels billion kilowatthours

natural gas


petroleum

coal

renewableenergy

nuclear

Reference

2020 2030 2040

2016projections

No Clean Power Plan


Fuel prices and current laws and regulations drive growing shares of renewables and natural gas in the electricity generation mix as coal’s share declines over time in the Reference case


Natural gas resource availability affects prices and plays a critical role in determining the mix of coal, natural gas, and renewable generation



2015 2025 2035 2015 2025 2035

Low Oil and Gas Resourceand Technology

High Oil and Gas Resource and Technology

0

500

1,000

1,500

2,000

2,500

1980 1990 2000 2010 2020 2030 2040

U.S. net electricity generation from select fuels billion kilowatthours

natural gas


coal

renewableenergy

Reference

-30

-20

-10

0

10

20

30

40

2005 2010 2015 2020 2025 2030 2035 2040


solarwindoil and gasnuclearothercoal

additions

retirements

Annual electricity generating capacity additions and retirements (Reference case) gigawatts

Lower capital costs and the availability of tax credits boost near-term wind additions and sustain solar additions; whereas coal-fired unit retirements in the Reference case are driven by low natural gas prices and the Clean Power Plan



0

20

40

60

80

100

120

2010 2020 2030 2040

Nuclear electricity generating capacitygigawatts


Reference

-4

-3

-2

-1

0

1

2

3

2015 2020 2025 2030 2035 2040

Year-over-year nuclear capacity changes gigawatts

additions

retirements

assumed upratesnew reactors

actual/announcedretirementsprojectedretirements

Reference


Assumptions about license renewals in AEO2017 increase nuclear retirements, leading to net nuclear capacity decreases


0

200

400

600

800

1,000

1,200

1,400

2000 2010 2020 2030 2040

Coal productionmillion short tons

total

West

Appalachia

Interior


No Clean Power PlanReference

0

200

400

600

800

1,000

1,200

1,400

2000 2010 2020 2030 2040

Coal consumption in electric power sector million short tons


No CleanPower Plan

Reference


Coal production decreases, primarily in the Western region


Buildings and industrial


0 1 2 3 4 5 6

heating

cooling

water heating

lighting

refrigeration

other

Residential sector delivered energy consumptionquadrillion British thermal units

20162040

0 1 2 3 4 5 6

heating

cooling

water heating

lighting

refrigeration

other

Commercial sector delivered energy consumption quadrillion British thermal units

20162040


Energy consumption decreases for most major end uses in the residential and commercial sectors with improved equipment efficiency and standards in the Reference case


0 1 2 3 4

other uses

TVs and PCs

cooking

laundry and dishwashing

refrigerators and freezers

water heating

heating

lighting

cooling 20162040

Residential electricity use per householdthousand kilowatthours per household

Per-household electricity use continues to decline in the Reference case led by efficiency improvements in lighting, cooling, and refrigeration



18

20

22

24

26

28

30

32

34

36

1980 1990 2000 2010 2020 2030 2040


//

High Oil PriceHigh Economic GrowthHigh Oil and Gas Resourceand Technology Reference Low Oil and Gas Resource and TechnologyLow Economic GrowthLow Oil Price

Industrial energy consumptionquadrillion British thermal units

Industrial energy consumption grows in all cases, but is higher in the High Oil Price case and the High Economic Growth cases over most of the projection



2010 2020 2030 2040

Industrial energy consumption quadrillion British thermal units


non-manufacturingother non-energyintensivemetal durablesrefiningbulk chemical feedstockbulk chemical heat & powerfoodiron & steelpaperother energy intensive


Industrial sector energy consumption growth in the Reference case is led by increases in petroleum and natural gas consumption


0

5

10

15

20

25

30

35

1980 2000 2020 2040

Industrial energy consumptionquadrillion British thermal units


coalelectricityrenewables

natural gas

hydrocarbongas liquidspetroleum

annual energy outlook 2017 - energy information administration · source: eia, annual energy...

Documents