www.eia.gov U.S. Energy Information Administration Independent Statistics & Analysis
Annual Energy Outlook 2014 Early Release Reference Case
AEO2014 Early Release Rollout Presentation Paul H. Nitze School of Advanced International Studies Johns Hopkins University December 16, 2013 | Washington, D.C. by Adam Sieminski, Administrator
Key results from the AEO2014 Reference case
2
• Growing domestic production of natural gas and oil continues to reshape the U.S. energy economy, with crude oil approaching the 1970 all-time high of 9.6 million barrels per day
• Light-duty vehicle energy use declines sharply reflecting slowing growth in vehicle miles traveled and accelerated improvement in vehicle efficiency
• With continued growth in shale gas production, natural gas becomes the largest source of U.S. electric power generation, surpassing coal by 2035, and boosting production and natural gas consumption in manufacturing
• Strong growth in domestic natural gas production supports increased exports of both pipeline and liquefied natural gas
• With strong growth in domestic oil and gas production, U.S. dependence on imported fuels falls sharply
• Improved efficiency of energy use and a shift away from carbon-intensive fuels keep U.S. energy-related carbon dioxide emissions below their 2005 level through 2040
Adam Sieminski, December 16, 2013
0
25
50
75
100
125
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
Growth in U.S. energy production outstrips growth in consumption leading to a reduction in net imports
3
U.S. energy production and consumption quadrillion Btu
Source: EIA, Annual Energy Outlook 2014 Early Release
History Projections 2012
4% Consumption
Production
Net imports 16%
Adam Sieminski, December 16, 2013
3%
2034 2040
Growing tight oil and offshore crude oil production drive U.S. output close to historical high
4
U.S. crude oil production million barrels per day
Source: EIA, Annual Energy Outlook 2014 Early Release
0
2
4
6
8
10
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
Tight oil
Alaska
Other lower 48 onshore
Lower 48 offshore
Projections History 2012
Adam Sieminski, December 16, 2013
U.S. maximum production level of 9.6 million barrels per day in 1970
0
5
10
15
20
25
30
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
Transportation sector motor gasoline demand declines, while diesel fuel accounts for a growing portion of the market
5
transportation energy consumption by fuel quadrillion Btu
Source: EIA, Annual Energy Outlook 2014 Early Release
Adam Sieminski, December 16, 2013
Projections History 2012
59% Motor gasoline
Jet fuel
CNG/LNG
12% 13% 3%
44%
31%
3% 4% Other*
Diesel 22%
2030
47%
13% 3%
30%
1%
2040
Ethanol 4% 5%
5%
*Includes aviation gasoline, propane, residual fuel oil, lubricants, electricity, and liquid hydrogen
Shale gas leads U.S. production growth
6
U.S. dry natural gas production trillion cubic feet
Source: EIA, Annual Energy Outlook 2014 Early Release
0
10
20
30
40
50
60
70
80
90
100
0
5
10
15
20
25
30
35
40
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
Associated with oil Coalbed methane
Tight gas
Shale gas
Alaska Non-associated offshore
Non-associated onshore
Projections History 2012
Adam Sieminski, December 16, 2013
billion cubic feet per day
Electricity generation from natural gas surpasses coal
0
500
1,000
1,500
2,000
2,500
2005 2010 2015 2020 2025 2030 2035 2040
electricity generation by fuel billion kilowatthours
7
History Projections
Coal
Natural gas
Adam Sieminski, December 16, 2013
2012
Source: EIA, Annual Energy Outlook 2014 Early Release
Manufacturing output and natural gas use grows with low natural gas prices, particularly in the near term
8
manufacturing natural gas consumption quadrillion Btu
Source: EIA, Annual Energy Outlook 2014 Early Release
Adam Sieminski, December 16, 2013
0
4
8
12
16
20
24
0
1
2
3
4
5
6
7
8
9
2010 2025 2040Aluminum Glass
Iron and steel
Paper
Food
Refining and related
Bulk chemicals
Other
Metal based
billion cubic feet per day
durables
manufacturing
U.S. natural gas imports and exports trillion cubic feet per year
-6
-4
-2
0
2
4
6
8
10
2000 2005 2010 2015 2020 2025 2030 2035 2040
Alaska LNG exports
Pipeline exports to Mexico
Pipeline exports to Canada
Lower 48 states LNG exports
Pipeline imports from Canada
LNG imports
Source: EIA, Annual Energy Outlook 2014 Early Release
Adam Sieminski, December 16, 2013 9
-15
-10
-5
0
5
10
15
20
25
billion cubic feet per day
5.4 tcf of exports (14.8 bcf/day)
2.0 tcf of imports (5.4 bcf/day)
U.S. natural gas gross exports exceed 5 tcf in 2025
Projections History 2012 2025
U.S. petroleum product imports and exports million barrels per day
-4
-3
-2
-1
0
1
2
3
4
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040
Other petroleum product imports
Distillate exports
Motor gasoline exports
Other petroleum product exports
Distillate imports
Motor gasoline imports
Source: EIA, Annual Energy Outlook 2014 Early Release
Adam Sieminski, December 16, 2013 10
U.S. maintains status as a net exporter of petroleum products
Projections History 2012
Total petroleum product net exports
Energy-related CO2 emissions remain below the 2005 level over the projection period
11
carbon dioxide emissions billion metric tons
Source: EIA, Annual Energy Outlook 2014 Early Release
0
1
2
3
4
5
6
7
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
Projections History 2012 2005
Adam Sieminski, December 16, 2013
Energy-related carbon dioxide emissions are 9% below the 2005 level in 2020 and 7% below the
2005 level in 2040.
Petroleum and other liquid supply
12 Adam Sieminski, December 16, 2013
U.S. dependence on imported liquids declines, particularly in the near term
13
U.S. liquid fuel supply million barrels per day
Source: EIA, Annual Energy Outlook 2014 Early Release
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 40%
32%
Projections History 2012 2005
60%
Adam Sieminski, December 16, 2013
25%
2016 2040
Increased production of tight oil and greater fuel efficiency drive decline in petroleum and other liquids imports
14
0
5
10
15
20
25
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040Note: “Other” includes refinery gain, biofuels production, all stock withdrawals, and other domestic sources of liquid fuels Source: EIA, Annual Energy Outlook 2014 Early Release
Projections History
Natural gas plant liquids
Crude oil production (excluding tight)
Net petroleum and biofuel imports
32%
17%
12%
23%
12%
13%
40%
2012
Other
23%
Tight oil production
16%
12%
U.S. liquid fuels supply million barrels per day
Adam Sieminski, December 16, 2013
14%
25%
2016
25%
12%
24%
2040
0.0
0.5
1.0
1.5
2.0
2.5
0
100
200
300
400
500
600
700
800
900
2010 2015 2020 2025 2030 2035 2040
Natural gas use in the transportation sector grows rapidly with the largest share in freight trucks
15
natural gas use by mode trillion Btu
Source: EIA, Annual Energy Outlook 2014 Early Release
Adam Sieminski, December 16, 2013
Freight trucks
Buses
Freight rail and marine Light-duty vehicles
22%
billion cubic feet per day
Approximate crude oil equivalent, (thousand barrels per day) 2040
Freight trucks Freight rail and marine Buses Light-duty vehicles
290 71 38
9
Natural gas
16 Adam Sieminski, December 16, 2013
U.S. natural gas prices remain well below crude oil prices
17
0
5
10
15
20
25
30
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
energy spot prices 2012 dollars per million Btu
Source: EIA, Annual Energy Outlook 2014 Early Release
History Projections 2012
Henry Hub spot price
Adam Sieminski, December 16, 2013
Brent crude oil spot price
2018 2040
Ratio: 7.1
Oil to gas price ratio:
3.4
Ratio: 3.2
U.S. becomes a net exporter of natural gas in the near future
18
U.S. dry natural gas trillion cubic feet per year
Source: EIA, Annual Energy Outlook 2014 Early Release
Adam Sieminski, December 16, 2013
-10
0
10
20
30
40
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
Projections History 2012
Consumption
Domestic supply
Net exports
100
75
50
25
0
-25
billion cubic feet per day
19
0
5
10
15
20
25
30
35
2005 2012 2020 2025 2030 2035 2040
U.S. dry gas consumption trillion cubic feet
Source: EIA, Annual Energy Outlook 2014 Early Release
Projections History
Industrial*
Electric power
Commercial
Residential
Transportation**
11.2
4.1
1.7
11.0
3.6
9.1
4.2
0.7
8.5
2.9
*Includes combined heat-and-power and lease and plant fuel **Includes pipeline fuel
Natural gas consumption growth is driven by electric power, industrial, and transportation use
Adam Sieminski, December 16, 2013
Electricity
20 Adam Sieminski, December 16, 2013
0
2
4
6
8
10
12
14
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040
Growth in electricity use slows, but still increases by 29% from 2012 to 2040
21
U.S. electricity use percent growth (3-year rolling average)
Source: EIA, Annual Energy Outlook 2014 Early Release
Projections
History 2012
Period Annual Growth__ Electricity use GDP 1950s 9.8 4.1 1960s 7.3 4.4 1970s 4.7 3.2 1980s 2.9 3.0 1990s 2.4 3.2 2000-2012 0.7 1.8 2013-2040 0.9 2.4
Adam Sieminski, December 16, 2013
Gross domestic product
Electricity use
Over time the electricity mix gradually shifts to lower-carbon options, led by growth in natural gas and renewable generation
22
electricity net generation trillion kilowatthours per year
Source: EIA, Annual Energy Outlook 2014 Early Release
0
1
2
3
4
5
6
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
13%
30%
19%
37%
12%
1% Nuclear Oil and other liquids
Natural gas
Coal
Renewables
2012 Projections History
16%
16%
32%
35%
<1%
Adam Sieminski, December 16, 2013
1993
11% 13%
19%
53%
4%
30%
17%
37%
15%
1%
2025 2040
Non-hydro renewable generation more than doubles between 2012 and 2040
23
non-hydropower renewable generation billion kilowatthours per year
Source: EIA, Annual Energy Outlook 2013 Early Release
0
100
200
300
400
500
600
2001 2005 2010 2015 2020 2025 2030 2035 2040
Wind
Solar
Geothermal Municipal waste
Biomass
Industrial CHP
Power sector
2012 Projections History
Adam Sieminski, December 16, 2013
For more information
24
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
State Energy Portal | www.eia.gov/state
Adam Sieminski, December 16, 2013
Supplemental slides
25 Adam Sieminski, December 16, 2013
Reference case oil price initially drops and then rises steadily, but there is uncertainty about the future trajectory
26
0
25
50
75
100
125
150
175
200
225
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
annual average price of Brent crude oil real 2012 dollars per barrel
Source: EIA, Annual Energy Outlook 2014 Early Release
Projections History 2012
High Oil Price
Low Oil Price
Reference
Adam Sieminski, December 16, 2013
U.S. production grows rapidly, particularly natural gas, renewables, and liquids in the near term
27
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
Source: EIA, Annual Energy Outlook 2014 Early Release
History Projections 2012
26%
21%
31%
11%
10%
22%
38%
20%
12%
8% Nuclear
Crude oil and natural gas plant liquids
Natural gas
Coal
Renewables
Adam Sieminski, December 16, 2013
2025
23%
24%
34%
11%
8%
2040
U.S. energy use grows slowly over the projection reflecting steady growth in GDP offset by improving energy efficiency
28
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
Source: EIA, Annual Energy Outlook 2014 Early Release
History Projections 2012
37%
18%
27%
8%
8%
1%
32%
10%
18%
30%
8% 2%
Nuclear
Oil and other liquids
Natural gas
Coal
Renewables (excluding liquid biofuels)
Adam Sieminski, December 16, 2013
2025
34%
19%
27%
8%
9%
2% Liquid biofuels
2040
CO2 per dollar of GDP declines faster than energy use per dollar of GDP reflecting the shift to lower carbon fuels
29
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 2014 Early Release
History Projections 2012
Carbon dioxide emissions per 2005 dollar GDP
Energy use per 2005 dollar of GDP
Energy use per capita
2005
Adam Sieminski, December 16, 2013
Coal regains some competitive advantage relative to natural gas over time on a national average basis
30
0
2
4
6
8
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
ratio of natural gas price to steam coal price
Source: EIA, Annual Energy Outlook 2014 Early Release
0
2
4
6
8
10
12
1990 2000 2010 2020 2030 2040
History Projections
2012 2012 dollars per Btu
History Projections 2012
Competitive parity
Energy prices to the electric power sector
Coal
Natural gas
Adam Sieminski, December 16, 2013
VMT per licensed driver decreases until 2024 in AEO2014 and is much lower than in AEO2013 due to consideration of age cohorts
31
vehicle miles traveled per licensed driver thousand miles
Source: EIA, Annual Energy Outlook 2014 Early Release
Adam Sieminski, December 16, 2013
0
2
4
6
8
10
12
14
1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
AEO2014
AEO2013
History Projection 2012
Light-duty vehicle travel is lower in AEO2014 than in AEO2013
32
light-duty vehicle miles traveled billion miles
Source: EIA, Annual Energy Outlook 2014 Early Release
Adam Sieminski, December 16, 2013
0
1,000
2,000
3,000
4,000
1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
AEO2013
AEO2014
History Projections 2012
Light-duty vehicle liquids consumption is lower primarily due to lower growth in vehicle miles traveled
33
light-duty vehicle liquids consumption quadrillion Btu
Source: EIA, Annual Energy Outlook 2014 Early Release
0
5
10
15
20
2010 2015 2020 2025 2030 2035 2040
AEO2013
AEO2014
Adam Sieminski, December 16, 2013
Global liquids supply increases by almost one-third with OPEC’s share relatively stable
34
0
25
50
75
100
125
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
global liquids supply million barrels per day
Source: EIA, Annual Energy Outlook 2014 Early Release
Projections History 2012
OPEC
Other non-OECD
OECD
44%
22%
34%
41%
25%
34%
Adam Sieminski, December 16, 2013
2025
41%
25%
35%
2040
Why long-term projections might could will be wrong
35
• Different relative fuel prices
• Faster / slower demand growth
• Changing policies and regulations
• Changing consumer preferences
• Faster / slower technological progress
• Technological breakthroughs
Adam Sieminski, December 16, 2013