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Annual Energy Outlook 2014

Release Date: May 7, 2014   |  Next Early Release Date: December 2014   |  See schedule  |  full report

Market Trends: U.S. energy demand

In the United States, average energy use per person declines from 2012 to 2040

Population growth affects energy use through increases in housing, commercial floorspace, transportation, and economic activity. However, the structure and efficiency of the U.S. economy are changing in ways that can lower energy use. Changes in consumer behavior can also have an impact, such as changes in the rate of vehicle miles traveled (VMT) per licensed driver. U.S. population increases by 0.7%/year from 2012 to 2040; the economy, as measured by gross domestic product (GDP), increases at an average annual rate of 2.4%; and total energy consumption increases by 0.4%/year. As a result, energy intensity, measured both as energy use per person and as energy use per dollar of GDP, declines over the projection period (Figure MT-7).


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The projected decline in energy use per capita is brought about largely by gains in appliance efficiency, a shift in production from cooler to warmer regions, and an increase in vehicle efficiency standards, combined with modest growth in travel per licensed driver. From 1970 through 2008, energy use dipped below 320 million British thermal units (Btu) per person for only a few years in the 1980s. In 2012, energy use per capita was about 302 million Btu. In the Reference case, energy use
per capita declines to 279 million Btu per person in 2040—a level not seen since 1965.

Continual changes in the structure of the economy reduce energy use per dollar of GDP. Although the service industries’ share of total shipments remains below the 2012 level of 78%, the manufacturing sector shifts about 1% of the output from energy-intensive industries to non-energy-intensive industries. Efficiency gains in the electric power sector also reduce overall energy intensity, as older, less-efficient generators are retired as a result of slower growth in electricity demand, changing dispatch economics related to rising fuel prices, and stricter environmental regulations.

Industrial and commercial sectors lead U.S. growth in primary energy use

Total primary energy consumption, including fuels for electricity generation, grows by 0.4%/year in the Reference case, to 106.3 quadrillion Btu in 2040 (Figure MT-8). The largest increase, 7.8 quadrillion Btu, is in the industrial sector, with increased use of natural gas in some industries (bulk chemicals, for example) as a result of low natural gas prices coinciding with rising shipments in those industries. In the industrial sector, which was more severely affected than the other end-use sectors by the 2007-09 economic downturn, energy consumption increases by 7.0 quadrillion Btu from 2008 to 2040.


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The second-largest increase in total primary energy use, 3.3 quadrillion Btu from 2012 to 2040, is in the commercial sector. Even as standards for building shells and energy efficiency are tightened and commercial energy intensity (energy use per square foot) decreases by 0.4%/year from 2012 through 2040, energy use grows by 0.6%/year as annual growth in commercial floorspace averages 1.0%.

Primary energy use in the residential sector grows by 0.2%/year, or about 1.4 quadrillion Btu from 2012 to 2040. Energy use for space heating was down by almost 1 quadrillion Btu in 2012 because of an unusually warm heating season. In 2040, residential energy use is at 2011 levels, despite reduced energy use for space heating, lighting, and clothes washers, among other uses.

In the transportation sector, light-duty vehicle (LDV) energy use declines with the implementation of fuel economy standards. VMT remain flat (about 12,200 per licensed driver) in the near term, then begin to increase after 2025. From 2012 to 2040, total transportation sector energy use falls by more than 1 quadrillion Btu.

Renewables and natural gas lead rise in primary energy consumption

The fossil fuel share of total energy use declines from 82% in 2012 to 80% in 2040 in the Reference case, while renewable energy use grows (Figure MT-9). The renewable share of total energy use (including biofuels) increases from 9% in 2012 to 12% in 2040 in response to the availability of federal tax credits for renewable electricity generation and capacity during the early years of the projection and in response to state renewable portfolio standard (RPS) programs. Biofuel use mandated by the Renewable Fuels Standard (RFS) accounts for a small part of the increase.


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Natural gas consumption grows by about 0.8%/year from 2012 to 2040, led by increases in natural gas use for electricity generation and in the industrial sector. Growing production from tight shale keeps the price of natural gas to end users below 2005-08 levels through 2038.

Increases in vehicle fuel economy offset growth in transportation activity, resulting in a decline in the petroleum and other liquids share of fuel use while consumption of liquid biofuels increases. Biofuels, including E85, biodiesel blended into diesel, and ethanol blended into motor gasoline (up to 15%), account for 4% of all petroleum and other liquids consumption by energy content in 2040.

Coal consumption increases by an average of 0.3%/year from 2012 to 2040, remaining between the 2011 and 2012 levels through 2040. A small amount of coal-fired power plant capacity is added: a total of 2.2 gigawatts (GW) currently under construction and another 0.5 GW added after 2016 (including 0.3 GW with carbon sequestration capability). Coal-fired capacity retirements total 51 GW between 2012 and 2040, but the remaining coal-fired plants continue to be used extensively.


Reference Case Tables
Table 1. Total Energy Supply, Disposition, and Price Summary XLS
Table 2. Energy Consumption by Sector and Source - United States XLS
Table 3. Energy Prices by Sector and Source - United States XLS
Table 4. Residential Sector Key Indicators and Consumption XLS
Table 5. Commercial Sector Key Indicators and Consumption XLS
Table 6. Industrial Sector Key Indicators and Consumption XLS
Table 7. Transportation Sector Key Indicators and Delivered Energy Consumption XLS
Table 8. Electricity Supply, Disposition, Prices, and Emissions XLS
Table 9. Electricity Generating Capacity XLS
Table 10. Electricity Trade XLS
Table 11. Petroleum and Other Liquids Supply and Disposition XLS
Table 12. Petroleum and Other Liquids Prices XLS
Table 13. Natural Gas Supply, Disposition, and Prices XLS
Table 14. Oil and Gas Supply XLS
Table 15. Coal Supply, Disposition, and Prices XLS
Table 16. Renewable Energy Generating Capacity and Generation XLS
Table 17. Renewable Energy Consumption by Sector and Source XLS
Table 18. Energy-Related Carbon Dioxide Emissions by Sector and Source - United States XLS
Table 19. Energy-Related Carbon Dioxide Emissions by End Use XLS
Table 20. Macroeconomic Indicators XLS
Table 21. International Petroleum and Other Liquids Supply, Disposition, and Prices XLS