Environment

Projections

Assumptions to the Annual Energy Outlook

Released: June 11, 2014

This report presents the major assumptions of the National Energy Modeling System (NEMS) used to generate the projections in the Annual Energy Outlook, including general features of the model structure, assumptions concerning energy markets, and the key input data and parameters that are the most significant in formulating the model results.

 
Supplemental Tables to the Annual Energy Outlook

Released: May 1, 2013

The Annual Energy Outlook (AEO) Supplemental tables were generated for the reference case of the AEO using the National Energy Modeling System, a computer-based model which produces annual projections of energy markets. Most of the tables were not published in the AEO, but contain regional and other more detailed projections underlying the AEO projections.

Accounting for Carbon Dioxide Emissions from Biomass Energy Combustion (released in AEO2010)

Released: May 11, 2010

Carbon Dioxide (CO2) emissions from the combustion of biomass to produce energy are excluded from the energy-related CO2 emissions reported in Annual Energy Outlook 2010. According to current international convention, carbon released through biomass combustion is excluded from reported energy-related emissions. The release of carbon from biomass combustion is assumed to be balanced by the uptake of carbon when the feedstock is grown, resulting in zero net emissions over some period of time]. However, analysts have debated whether increased use of biomass energy may result in a decline in terrestrial carbon stocks, leading to a net positive release of carbon rather than the zero net release assumed by its exclusion from reported energy-related emissions.

Updated State Air Emissions Regulations (released in AEO2010)

Released: May 11, 2010

The Regional Greenhouse Gas Initiative (RGGI) is a program that includes 10 Northeast states that have agreed to curtail and reverse growth in their carbon dioxide (CO2) emissions. The RGGI program includes all electricity generating units with a capacity of at least 25 megawatts and requires an allowance for each ton of CO2 emitted. The first year of mandatory compliance was in 2009.

Clean Air Interstate Rule: Changes and Modeling in AEO2010 (released in AEO2010)

Released: May 11, 2010

On December 23, 2008, the D.C. Circuit Court remanded but did not vacate the Clean Air Interstate Rule (CAIR), overriding its previous decision on February 8, 2008, to remand and vacate CAIR. The December decision, which is reflected in Annual Energy Outlook 2010 (AEO) , allows CAIR to remain in effect, providing time for the Environmental Protection Agency to modify the rule in order to address objections raised by the Court in its earlier decision. A similar rule, referred to as the Clean Air Mercury Rule (CAMR), which was to set up a cap-and-trade system for reducing mercury emissions by approximately 70%, is not represented in the AEO2010 projections, because it was vacated by the D.C. Circuit Court in February 2008.

CAFE Standards (released in AEO2010)

Released: May 11, 2010

Pursuant to the Presidents announcement of a National Fuel Efficiency Policy, the National Highway Traffic Safety Administration (NHTSA) and the EPA have promulgated nationally coordinated standards for tailpipe Carbon Dioxide (CO2)-equivalent emissions and fuel economy for light-duty vehicles (LDVs), which includes both passenger cars and light-duty trucks. In the joint rulemaking, the Environmental Protection Agency is enacting CO2-equivalent emissions standards under the Clean Air Act (CAA), and NHTSA is enacting companion Corporate Average Fuel Economy standards under the Energy Policy and Conservation Act, as amended by the Energy Independence and Security Act of 2007.

Updated State Air Emissions Regulations (released in AEO2009)

Released: March 31, 2009

Regional greenhouse gas initiative and western climate initiative descriptions.

California's Move Toward E10 (released in AEO2009)

Released: March 31, 2009

In Annual Energy Outlook 2009, (AEO) E10–a gasoline blend containing 10% ethanol–is assumed to be the maximum ethanol blend allowed in California erformulated gasoline (RFG), as opposed to the 5.7% blend assumed in earlier AEOs. The 5.7% blend had reflected decisions made when California decided to phase out use of the additive methyl tertiary butyl ether in its RFG program in 2003, opting instead to use ethanol in the minimum amount that would meet the requirement for 2.0% oxygen content under the Clean Air Act provisions in effect at that time.

Clean Air Interstate Rule (released in AEO2009)

Released: March 31, 2009

Clean Air Interstate Rule (CAIR) is a cap-and-trade program promulgated by the Environmental Protection Agency in 2005, covering 28 eastern U.S. states and the District of Columbia. It was designed to reduce sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions in order to help states meet their National Ambient Air Quality Standards (NAAQS) for ozone and particulate matter (PM2.5) and to further emissions reductions already achieved through the Acid Rain Program and the NOx State Implementation Plan call program. The rule was set to commence in 2009 for seasonal and annual NOx emissions and in 2010 for SO2 emissions.

Clean Air Mercury Rule (released in AEO2009)

Released: March 31, 2009

On February 8, 2008, a three-judge panel on the D.C. Circuit of the U.S. Court of Appeals issued a decision to vacate the Clean Air Mercury Rule (CAMR). In its ruling, the panel cited the history of hazardous air pollutant regulation under Section 112 of the Clean Air Act (CAA). Section 112, as written by Congress, listed emitted mercury as a hazardous air pollutant that must be subject to regulation unless it can be proved harmless to public welfare and the environment. In 2000, the Environmental Protection Agency ruled that mercury was indeed hazardous and must be regulated under Section 112 and, therefore, subjected to the best available control technology for mitigation.

Greenhouse Gas Concerns and Power Sector Planning (released in AEO2009)

Released: March 13, 2009

Concerns about potential climate change driven by rising atmospheric concentrations of Greenhouse Gases (GHG) have grown over the past two decades, both domestically and abroad. In the United States, potential policies to limit or reduce GHG emissions are in various stages of development at the state, regional, and federal levels. In addition to ongoing uncertainty with respect to future growth in energy demand and the costs of fuel, labor, and new plant construction, U.S. electric power companies must consider the effects of potential policy changes to limit or reduce GHG emissions that would significantly alter their planning and operating decisions. The possibility of such changes may already be affecting planning decisions for new generating capacity.

Mobile Source Air Toxics Rule (released in AEO2008)

Released: June 26, 2008

On February 9, 2007, the Environmental Protection Agency (EPA) released its MSAT2 rule, which will establish controls on gasoline, passenger vehicles, and portable fuel containers. The controls are designed to reduce emissions of benzene and other hazardous air pollutants. Benzene is a known carcinogen, and the EPA estimates that mobile sources produced more than 70% of all benzene emissions in 1999. Other mobile source air toxics, including 1,3-butadiene, formaldehyde, acetaldehyde, acrolein, and naphthalene, also are thought to increase cancer rates or contribute to other serious health problems.

State Regulations on Airborne Emissions: Update Through 2007 (Update) (released in AEO2008)

Released: June 26, 2008

States are moving forward with implementation plans for the Clean Air Interstate Rule (CAIR). The program, promulgated by the EPA in March 2005, is a cap-and-trade system designed to reduce emissions of SO2 and NOx. States originally had until March 2007 to submit implementation plans, but the deadline has been extended by another year. CAIR covers 28 eastern states and the District of Columbia. States have the option to participate in the cap-and trade plan or devise their own plans, which can be more stringent than the federal requirements. To date, no state has indicated an intent to form NOx and SO2 programs with emissions limits stricter than those in CAIR, and it is expected that all states will participate in the Environmental Protection Agency administered cap-and-trade program. CAIR remains on schedule for implementation, and Annual Energy Outlook 2008 includes CAIR by assuming that all required states will meet only the federal requirement and will trade credits.

State Regulations on Airborne Emissions: Update Through 2006 (Update) (released in AEO2007)

Released: February 22, 2007

In May 2005, the Environmental Protection Agency published two final rules aimed at reducing emissions from coal-fired power plants. The Clean Air Interstate Rule (CAIR) requires 28 states and the District of Columbia to reduce emissions of SO2 and/or NOx. The Clean Air Mercury Rule (CAMR) requires the states to reduce emissions of mercury from new and existing coal-fired plants.

Regulation of Emissions from Stationary Diesel Engines (released in AEO2007)

Released: February 22, 2007

On July 11, 2006, the Environmental Protection Agency (EPA) issued regulations covering emissions from stationary diesel engines  New Source Performance Standards that limit emissions of NOx, particulate matter, SO2, carbon monoxide, and hydrocarbons to the same levels required for nonroad diesel engines. The regulation affects new, modified, and reconstructed diesel engines. Beginning with model year 2007, engine manufacturers must specify that new engines less than 3,000 horsepower meet the same emissions standard as nonroad diesel engines. For engines greater than 3,000 horsepower, the standard will be fully effective in 2011. Stationary diesel engine fuel will also be subject to the same standard as nonroad diesel engine fuel, which reduces the sulfur content of the fuel to 500 parts per million by mid-2007 and 15 parts per million by mid-2010.

Mercury Emissions Control Technologies (released in AEO2006)

Released: March 20, 2006

The Annual Energy Outlook 2006 reference case assumes that states will comply with the requirements of the Environmental Protection Agency's new Clean Air Mercury Rule (CAMR) regulation. CAMR is a two-phase program, with a Phase I cap of 38 tons of mercury emitted from all U.S. power plants in 2010 and a Phase II cap of 15 tons in 2018. Mercury emissions in the electricity generation sector in 2003 are estimated at around 50 tons. Generators have a variety of options to meet the mercury limits, such as: switching to coal with a lower mercury content, relying on flue gas desulfurization or selective catalytic reduction equipment to reduce mercury emissions, or installing conventional activated carbon injection (ACI) technology.

State Restrictions on Methyl Tertiary Butyl Ether (released in AEO2006)

Released: February 1, 2006

By the end of 2005, 25 states had barred, or passed laws banning, any more than trace levels of methyl tertiary butyl ether (MTBE) in their gasoline supplies, and legislation to ban MTBE was pending in 4 others. Some state laws address only MTBE; others also address ethers such as ethyl tertiary butyl ether (ETBE) and tertiary amyl methyl ether (TAME). Annual Energy Outlook 2006 assumes that all state MTBE bans prohibit the use of all ethers for gasoline blending.

State Air Emission Regulations That Affect Electric Power Producers (Update) (released in AEO2006)

Released: February 1, 2006

Several states have recently enacted air emission regulations that will affect the electricity generation sector. The regulations govern emissions of NOx, SO2, CO2, and mercury from power plants.

California Greenhouse Gas Emissions Standards for Light-Duty Vehicles (Update) (released in AEO2006)

Released: February 1, 2006

The state of California was given authority under the Clean Air Act Amendments of 1990 (CAAA90) to set emissions standards for light-duty vehicles that exceed federal standards. In addition, other states that do not comply with the National Ambient Air Quality Standards (NAAQS) set by the Environmental Protection Agency under CAAA90 were given the option to adopt Californias light-duty vehicle emissions standards in order to achieve air quality compliance. CAAA90 specifically identifies hydrocarbon, carbon monoxide, and NOx as vehicle-related air pollutants that can be regulated. California has led the nation in developing stricter vehicle emissions standards, and other states have adopted the California standards.

U.S. Greenhouse Gas Intensity and the Global Climate Change Initiative (released in AEO2006)

Released: February 1, 2006

On February 14, 2002, President Bush announced the Administrations Global Climate Change Initiative. A key goal of the Climate Change Initiative is to reduce U.S. greenhouse gas (GHG) intensity-defined as the ratio of total U.S. GHG emissions to economic output-by 18% over the 2002 to 2012 time frame.

Update on Transition to Ultra-Low-Sulfur Diesel Fuel (released in AEO2006)

Released: February 1, 2006

On November 8, 2005, the Environmental Protection Agency (EPA) Administrator signed a direct final rule that will shift the retail compliance date for offering ultra-low sulfur diesel (ULSD) for highway use from September 1, 2006, to October 15, 2006. The change will allow more time for retail outlets and terminals to comply with the new 15 parts per million (ppm) sulfur standard, providing time for entities in the diesel fuel distribution system to flush higher sulfur fuel out of the system during the transition. Terminals will have until September 1, 2006, to complete their transitions to ULSD. The previous deadline was July 15, 2006.

Federal Air Emissions Regulations (released in AEO2006)

Released: February 1, 2006

In 2005, the Environmental Protection Agency (EPA) finalized two regulations, the Clean Air Interstate Rule (CAIR) and the Clean Air Mercury Rule CAMR, that would reduce emissions from coal-fired power plants in the United States. Both CAIR and CAMR are included in the Annual Energy Outlook 2006 reference case. The EPA has received 11 petitions for reconsideration of CAIR and has provided an opportunity for public comment on reconsidering certain aspects of CAIR. Public comments were accepted until January 13, 2006. The EPA has also received 14 petitions for reconsideration of CAMR and is willing to reconsider certain aspects of the rule. Public comments were accepted for 45 days after publication of the reconsideration notice in the Federal Register. Several states and organizations have filed lawsuits against CAMR. The ultimate decision of the courts will have a significant impact on the implementation of CAMR.

Maximum Achievable Control Technology for New Industrial Boilers (released in AEO2005)

Released: February 1, 2005

As part of Clean Air Act 90 (CAAA90, the EPA on February 26, 2004, issued a final rulethe National Emission Standards for Hazardous Air Pollutants (NESHAP) to reduce emissions of hazardous air pollutants (HAPs) from industrial, commercial, and institutional boilers and process heaters. The rule requires industrial boilers and process heaters to meet limits on HAP emissions to comply with a Maximum Achievable Control Technology (MACT) floor level of control that is the minimum level such sources must meet to comply with the rule. The major HAPs to be reduced are hydrochloric acid, hydrofluoric acid, arsenic, beryllium, cadmium, and nickel. The EPA predicts that the boiler MACT rule will reduce those HAP emissions from existing sources by about 59,000 tons per year in 2005.

U.S. Greenhouse Gas Intensity and the Global Climate Change Initiative (released in AEO2005)

Released: February 1, 2005

On February 14, 2002, President Bush announced the Administrations Global Climate Change Initiative. A key goal of the Climate Change Initiative is to reduce U.S. greenhouse gas intensity by 18% over the 2002 to 2012 time frame. For the purposes of the initiative, greenhouse gas intensity is defined as the ratio of total U.S. greenhouse gas emissions to economic output.

California Greenhouse Gas Emissions Standards for Light-Duty Vehicles (released in AEO2005)

Released: February 1, 2005

In July 2002, California Assembly Bill 1493 (A.B. 1493) was signed into law. The law requires that the California Air Resources Board (CARB) develop and adopt, by January 1, 2005, greenhouse gas emission standards for light-duty vehicles that provide the maximum feasible reduction in emissions. In estimating the feasibility of the standard, CARB is required to consider cost-effectiveness, technological capability, economic impacts, and flexibility for manufacturers in meeting the standard.

Clean Air Nonroad Diesel Rule (released in AEO2005)

Released: February 1, 2005

On June 29, 2004, the Environmental Protection Agency issued a comprehensive final rule regulating emissions from nonroad diesel engines and sulfur content in nonroad diesel fuel. The nonroad fuel market makes up more than 18% of the total distillate pool. The rule applies to new equipment covering a broad range of engine sizes, power ratings, and equipment types. There are currently about 6 million pieces of nonroad equipment operating in the United States, and more than 650,000 new units are sold each year.

Multi-Pollutant Legislation and Regulations (released in AEO2005)

Released: February 1, 2005

The 108th Congress proposed and debated a variety of bills addressing pollution control at electric power plants but did not pass any of them into law. In addition, the Environmental Protection Agency (EPA) currently is preparing two regulations-a proposed Clean Air Interstate Rule (pCAIR) and a Clean Air Mercury Rule (CAMR)-to address emissions from coal-fired power plants. Several states also have taken legislative actions to limit pollutants from power plants in their jurisdictions. This section discusses three Congressional air pollution bills and the EPA's pCAIR and CAMR regulations.

Update on State Air Emission Regulations That Affect Electric Power Producers (released in AEO2005)

Released: February 1, 2005

Several states have recently enacted air emission regulations that will affect the electricity generation sector. The regulations are intended to improve air quality in the states and assist them in complying with the revised 1997 National Ambient Air Quality Standards (NAAQS) for ground-level ozone and fine particulates. The affected states include Connecticut, Massachusetts, Maine, Missouri, New Hampshire, New Jersey, New York, North Carolina, Oregon, Texas, and Washington. The regulations govern emissions of NOx, SO2, CO2, and mercury from power plants.

Climate Stewardship Act of 2004 (released in AEO2005)

Released: February 1, 2005

The Climate Stewardship Act of 2004 would establish a system of tradable allowances to reduce greenhouse gas emissions. The bill includes requirements for mandatory emissions reporting by covered entities and for voluntary reporting of emissions reduction activities by noncovered entities; a national greenhouse gas database and registry of reductions; and a research program on climate change and related activities.

Motor Gasoline Outlook and State MTBE Bans

Released: April 1, 2003

The U.S. is beginning the summer 2003 driving season with lower gasoline inventories and higher prices than last year. Recovery from this tight gasoline market could be made more difficult by impending state bans on the blending of methyl tertiary butyl ether (MTBE) into gasoline that are scheduled to begin later this year.

Areas Participating in the Oxygenated Gasoline Program (Released in the STEO July 1999)

Released: July 1, 1999

Section 211(m) of the Clean Air Act (42 U.S.C. 7401-7671q) requires that gasoline containing at least 2.7% oxygen by weight is to be used in the wintertime in those areas of the county that exceed the carbon monoxide National Ambient Air Quality Standards (NAAQS). The winter oxygenated gasoline program applies to all gasoline sold in the larger of the Consolidated Metropolitan Statistical Area (CMSA) or Metropolitan Statistical Area (MSA) in which the nonattainment area is located.

Areas Participating in the Reformulated Gasoline Program (Released in the STEO June 1999)

Released: June 1, 1999

Section 107(d) of the Clean Air Act, as amended in 1990 (the Act), required states to identify all areas that do not meet the national ambient air quality standards (NAAQS) for ozone, and directed the Environmental Protection Agency (EPA) to designate these areas as ozone nonattainment areas. Section 181 of the Act required EPA to classify each area as a marginal, moderate, serious, severe or extreme ozone nonattainment area. EPA classified all areas that were designated as in nonattainment for ozone at the time of the enactment of the 1990 Amendments, except for certain "nonclassifiable" areas (56 FR 56694, November 6, 1991).

Environmental Regulations and Changes in Petroleum Refining Operations (Released in the STEO June 1998)

Released: June 1, 1998

Changes in domestic refining operations are identified and related to the summer Reid vapor pressure (RVP) restrictions and oxygenate blending requirements. This analysis uses published Energy Information Administration survey data and linear regression equations from the Short-Term Integrated Forecasting System (STIFS). The STIFS model is used for producing forecasts appearing in the Short-Term Energy Outlook.

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