Annual Energy Outlook 218 Columbia University, Center on Global Energy Policy February 13, 218 New York, NY John J. Conti, Deputy Administrator U.S. Energy Information Administration U.S. Energy Information Administration Independent Statistics & Analysis www.eia.gov
AEO218 Reference case highlights U.S. net energy exports occur over the projection period to 2 in most cases U.S. becomes a net energy exporter by 222 Strong domestic production and relatively flat demand Increased energy efficiency offsets growth in energy demand Gross Domestic Product is expected to grow 2.%/year to 2 Population is expected to grow by about.6%/year on average But energy consumption grows only about.4%/year on average U.S. liquids and natural gas production continues to grow through 242 and 2, respectively Result of further tight and shale resources development, despite relatively low prices Renewables are the fastest growing source of energy Most new electricity generation capacity will be natural gas/renewables after 222 Result of low natural gas prices, declining renewables technology costs and supportive policies February 13, 218 2
AEO218 cases examine a range of conditions through 2 Reference case: Current laws and regulations remain unchanged Current views in economic and demographic trend Considers improvements in known technologies High and Low Economic Growth cases: High case assumes compound annual growth rates for U.S. gross domestic product of 2.6% Reference case 2.% Low case assumes 1.% High and Low Oil and Gas Resource and Technology cases: High case - more accessible resources and lower extraction technology costs than in the Reference case Low case - fewer accessible resources and higher extraction technology costs than the Reference case High and Low Oil Price cases: Brent crude prices by 2 in 217 dollars $229 per barrel in the High Oil Price case $114/b in the Reference case $2/b in the Low Oil Price case February 13, 218 3
Crude oil prices depend more on global markets, while U.S. natural gas prices depend more on domestic market North Sea Brent oil price 217 dollars per barrel Henry Hub natural gas price 217 dollars per million Btu 2 history 217 projections 12 history 217 projections 2 $229 1 $9 Low Oil and Gas Resource/Technology 1 8 1 $114 $2 6 4 2 $ High Oil Price Reference case Low Oil Price $3 High Oil and Gas Resource/Technology 199 2 21 22 23 24 2 199 2 21 22 23 24 2 February 13, 218 4
U.S. crude oil and natural gas production are more sensitive to resource availability and technological improvements Crude oil production million barrels per day Dry natural gas production trillion cubic feet 2 2 history 217 projections 6 217 High Oil and Gas Resource/Technology High Oil Price 4 Reference case Low Oil Price 1 3 Low Oil and Gas Resource/Technology 1 2 1 21 22 23 24 2 21 22 23 24 2 February 13, 218
Growth in U.S. energy production surpasses domestic consumption in most cases Total U.S. energy consumption Total U.S. energy production 16 217 16 217 14 12 1 14 12 1 High Oil and Gas Resource/Technology High Oil Price Reference case Low Oil Price Low Oil and Gas Resource/Technology 8 8 6 4 High Economic Growth Reference case Low Economic Growth 6 4 2 2 199 2 21 22 23 24 2 199 2 21 22 23 24 2 February 13, 218 6
The United States becomes a net energy exporter in most cases Net energy trade 4 217 3 2 1-1 -2-3 net imports net exports Low Oil and Gas Resource/Technology Low Oil Price Reference case High Oil Price High Oil and Gas Resource/Technology -4 199 2 21 22 23 24 2 February 13, 218 7
Levels of petroleum and natural gas exports are sensitive to side case assumptions Petroleum net imports million barrels per day Natural gas net imports billion cubic feet per day 1 217 2 217 1 1 net imports -1 net imports net exports Low Oil and Gas Resource/ Technology net exports - -1 199 2 21 22 23 24 2-2 Low Oil Price Reference High Oil and -3 Gas Resource/ Technology High Oil Price -4 199 2 21 22 23 24 2 February 13, 218 8
The United States becomes a net energy exporter in the Reference case largely because of growing exports U.S. energy trade (Reference case) Net U.S. energy trade (Reference case) 4 217 3 217 3 2 3 exports 2 2 2 1 imports 1 1 net imports petroleum and other liquids 1 199 2 21 22 23 24 2 - net exports electricity coal and coke natural gas -1 199 21 23 2 February 13, 218 9
The fuel sector mix of energy consumption changes over the projected period in the Reference case Energy Consumption by source (Reference case) End Use Consumption by sector (Reference case) 4 217 4 217 4 petroleum and other liquids 4 3 3 3 natural gas 3 industrial 2 2 transportation 2 2 1 coal 1 other renewable energy nuclear hydro liquid biofuels 199 2 21 22 23 24 2 1 residential 1 commercial 199 2 21 22 23 24 2 February 13, 218 1
Transportation demonstrates the impact of energy efficiency on consumption Energy consumption by travel mode Reference case 217 3 Transportation sector energy consumption by fuel type 217 3 2 2 2 light-duty vehicles 2 motor gasoline 1 1 medium and heavy duty commercial light trucks rail air marine other 21 22 23 24 2 1 1 distillate fuel oil jet fuel electricity other 21 22 23 24 2 February 13, 218 11
Light-duty vehicle fuel economy improves with increasing sales of more fuel-efficient cars, while electrified powertrains gain market share in the Reference case Light-duty vehicle sales by fuel type sales (millions) 2 18 16 14 12 1 8 6 4 217 battery electric plug-in hybrid hybrid electric flex fuel gasoline 2 diesel other 21 22 23 24 2 February 13, 218 12
U.S. natural gas production and consumption continue to increase in most cases U.S. natural gas production trillion cubic feet per year billion cubic feet per day U.S. natural gas consumption trillion cubic feet per year billion cubic feet per day 6 4 3 217 16 14 12 1 8 High Oil and Gas Resource/ Technology High Oil Price Reference Low Oil Price Low Oil and Gas Resource/ Technology 6 4 3 217 16 14 12 1 8 2 6 2 6 4 4 1 2 1 2 2 21 22 23 24 2 2 21 22 23 24 2 February 13, 218 13
The United States becomes a net exporter of natural gas before 22, although the level of LNG exports is uncertain Natural gas trade trillion cubic feet per year billion cubic feet per day Liquefied natural gas exports trillion cubic feet per year billion cubic feet per day 1 217 LNG exports 28 21 14 14 12 1 High Oil Price 217 3 3 2? Mexico pipeline export 7 8 High Oil and Gas Resource/Technology 2 Canada pipeline imports Canada pipeline export 6 4 Reference Low Oil and Gas Resource/Technology 1 1-7 2 Low Oil Price LNG imports - -14 2 21 22 23 24 2 2 21 22 23 24 2 February 13, 218 14
Natural gas prices remain relatively low compared to historic values Natural gas spot price at Henry Hub 217 dollars per million British thermal units 12 217 1 Low Oil and Gas Resource and Technology 8 6 AEO 217 Reference 4 AEO 218 Reference 2 High Oil and Gas Resource and Technology 2 21 22 23 24 2 February 13, 218 1
3 2 2 1 1 3 2 2 1 1 The projected mix of electricity generation varies widely across cases as differences in fuel prices result in significant substitution Electricity generation from selected fuels billion kilowatthours Reference Low Oil and Gas Resource/Technology (high natural gas prices) High Oil and Gas Resource/Technology (low natural gas prices) 3, 217 217 projections 217 projections 2, natural gas 2, 1, renewables 1, coal nuclear 199 2 21 22 23 24 2 21 22 23 24 2 21 22 23 24 2 February 13, 218 16
Economics and policy drive changes to electric generation capacity Annual electricity generating capacity additions and retirements (Reference case) gigawatts 4 3 2 1-1 -2 217 additions retirements -3 2 21 21 22 22 23 23 24 24 2 solar wind oil and gas nuclear other coal Cumulative generating capacity additions and retirements (218-) gigawatts 9 8 7 6 4 3 2 1-1 -2-3 Reference Low Oil and Gas Resource/ Technology High Oil and Gas Resource/ Technology Renewables and natural gas comprise most of the capacity additions throughout the projection period in the Reference case. February 13, 218 17
The electric power sector demand for coal remains flat through 2 U.S. Coal production by region Reference Case with and without Clean Power Plan million short tons. 1,4 1,2 1, 217 Reference case Reference with Clean Power Plan 8 6 Total 4 2 2 21 22 23 24 2 Coal production decreases through 222 because of retirements of coal-fired electric generating capacity. West Interior Appalachia February 13, 218 18
Residential and commercial energy consumption grows slowly through 2 Residential sector delivered energy consumption Commercial sector delivered energy consumption 6 history 217 projections 6 history 217 projections electricity 4 3 4 3 natural gas 2 1 2 1 petroleum and other liquids 198 199 2 21 22 23 24 2 other 198 199 2 21 22 23 24 2 February 13, 218 19
Increased efficiency contributes to slowing the growth of electricity use in buildings sector Use of purchased electricity per household thousand kilowatthours per household cooking clothes & dishwashing Use of purchased electricity per square foot of commercial floorspace thousand kilowatthours per thousand square feet water heating cooking TVs and PCs heating 217 2 heating lighting 217 2 fridges & freezers cooling lighting ventilation water heating refrigeration cooling comp. & office equip. other uses other uses 1 2 3 4 1 2 3 4 6 February 13, 218 2
Industrial energy consumption grows in all cases, driven by economic growth and relatively low energy prices U.S. industrial delivered energy consumption 217 4 4 3 3 2 High Economic Growth High Oil Price Reference Low Oil Price Low Economic Growth 2 \\ 1 2 21 22 23 24 2 February 13, 218 21
U.S. energy consumption and production sees significant changes through 2 under current laws and policies Energy Consumption (Reference case) Energy Production (Reference case) 4 217 4 217 4 petroleum & other liquids 4 natural gas 3 3 3 2 natural gas 3 2 crude oil and lease condensate 2 1 coal other renewable energy 2 1 coal 1 nuclear Liquid biofuels hydro 199 2 21 22 23 24 2 1 nuclear other renewable energy natural gas plant liquids hydro 199 2 21 22 23 24 2 February 13, 218 22
AEO218 Reference case highlights U.S. net energy exports occur over the projection period to 2 in most cases U.S. becomes a net energy exporter by 222 Strong domestic production and relatively flat demand Increased energy efficiency offsets growth in energy demand Gross Domestic Product is expected to grow 2.%/year to 2 Population is expected to grow by about.6%/year on average But energy consumption grows only about.4%/year on average U.S. liquids and natural gas production continues to grow through 242 and 2, respectively Result of further tight and shale resources development, despite relatively low prices Renewables are the fastest growing source of energy Most new electricity generation capacity will be natural gas/renewables after 222 Result of low natural gas prices, declining renewables technology costs and supportive policies February 13, 218 23
For more information Annual Energy Outlook www.eia.gov/forecasts/aeo Annual Energy Outlook 218 PDF (https://www.eia.gov/outlooks/aeo/pdf/aeo218_final_pdf.pdf) PowerPoint (https://www.eia.gov/outlooks/aeo/ppt/aeo218_final_ppt.pptx) Excel Tables (https://www.eia.gov/outlooks/aeo/tables_ref.php) Interactive Table Viewer (https://www.eia.gov/outlooks/aeo/data/browser/) February 13, 218 24