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Annual Energy Outlook 2014

Release Dates: April 7 - 30, 2014   |  Next Early Release Date: December 2014   |  See schedule

Market Trends — Transportation sector energy demand

 

Growth in transportation energy consumption flat across projection


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The transportation sector consumes 27.1 quadrillion Btu of energy in 2040, the same as the level of energy demand in 2011 (Figure 70). The projection of no growth in transportation energy demand differs markedly from the historical trend, which saw 1.1-percent average annual growth from 1975 to 2011 [126]. No growth in transportation energy demand is the result of declining energy use for LDVs, which offsets increased energy use for heavy-duty vehicles (HDVs), aircraft, marine, rail, and pipelines.

Energy demand for LDVs declines from 16.1 quadrillion Btu in 2011 to 13.0 quadrillion Btu in 2040, in contrast to 0.9-percent average annual growth from 1975 to 2011. Higher fuel economy for LDVs more than offsets modest growth in vehicle miles traveled (VMT)per driver.

Energy demand for HDVs (including tractor trailers, buses, vocational vehicles, and heavy-duty pickups and vans) increases the fastest among transportation modes, from 5.2 quadrillion Btu in 2011 to 7.6 quadrillion Btu in 2040, as a result of increased travel as economic output grows. The increase in energy demand for HDVs is tempered by standards for HDV fuel efficiency and greenhouse gas (GHG) emissions starting in 2014.

Energy demand for aircraft increases from 2.5 quadrillion Btu in 2011 to 2.9 quadrillion Btu in 2040. Increases in personal air travel are offset by gains in aircraft fuel efficiency, while air freight movement grows with higher exports. Energy consumption for marine and rail travel increases as industrial output rises, and pipeline energy use rises moderately as increasing volumes of natural gas are produced closer to end-use markets.

CAFE and greenhouse gas emissions standards boost light-duty vehicle fuel economy


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The 1978 introduction of corporate average fuel economy (CAFE) standards for LDVs increased their average fuel economy from 19.9 mpg in 1978 to 26.2 mpg in 1987. Despite technological improvement, fuel economy fell to between 24 and 27 mpg over the next two decades, as sales of light trucks increased from 18 percent of new LDV sales in 1980 to 55 percent in 2004 [127]. The subsequent rise in fuel prices, reduction in sales of light trucks, and more stringent CAFE standards for light-duty trucks starting in model year (MY) 2008 and for passenger cars in MY 2011, resulted in a rise in estimated LDV fuel economy to 29.0 mpg in 2011 [128].

The National Highway Traffic Safety Administration (NHTSA) and the U.S. Environmental Protection Agency have jointly announced new GHG emissions and CAFE standards for MY 2012 through MY 2025 [129], [130]], which are included in AEO2013. As a result, the fuel economy of new LDVs, measured in terms of their compliance values in CAFE testing [131], rises from 32.5 mpg in 2012 to 47.3 mpg in 2025 (Figure 71). The GHG emissions and CAFE standards are held roughly constant after 2025, but fuel economy continues to rise, to 49.0 mpg in 2040, as new fuel-saving technologies are adopted. In 2040, passenger car fuel economy averages 56.1 mpg and light-duty truck fuel economy averages 40.5 mpg.

Travel demand for personal vehicles continues to grow, but more slowly than in the past


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Personal vehicle travel demand, measured as annual vehicle miles traveled (VMT) per licensed driver, grew at an average annual rate of 1 percent from 1970 to 2007, from about 8,700 miles per driver in 1970 to 12,800 miles in 2007. Since peaking in 2007, travel per licensed driver has declined because of rapidly increasing fuel prices and the economic recession.

Demographic changes moderate projected growth in VMT per licensed driver, which grows by an average of 0.3 percent per year, remaining below the 2007 level until 2029 and then growing to 13,300 miles in 2040 (Figure 72). Although vehicle sales rise through 2040, the number of vehicles per licensed driver declines from the all-time peak of 1.12 in 2007 to 1.01 in 2040. Further, unemployment remains above prerecession levels until around 2020, tempering the growth in demand for personal travel.

From 2011 to 2040, the price of motor gasoline increases by 26 percent (on a Btu basis), while real disposable personal income grows by 95 percent. Faster growth in income than fuel price lowers the percentage of income spent on fuel, boosting travel demand. In addition, the increase in fuel costs is more than offset by a 50-percent improvement in new vehicle fuel economy. Implementation of the new GHG and CAFE standards for LDVs lowers the cost of driving per mile and leads to growth in personal travel demand. Personal vehicle travel demand could vary, however, depending on several uncertainties, including the impact of changing demographics on travel behavior, the intensity of mass transit use, and other factors discussed above, such as fuel prices. The implications of a possible long-term decline in VMT per licensed driver are considered in the "Issues in focus" section of this report (see "Petroleum import dependence in a range of cases").

Sales of alternative fuel, fuel flexible, and hybrid vehicles sales rise


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LDVs that use diesel, other alternative fuels, hybrid-electric, or all-electric systems play a significant role in meeting more stringent GHG emissions and CAFE standards over the projection period. Sales of such vehicles increase from 20 percent of all new LDV sales in 2011 to 49 percent in 2040 in the AEO2013 Reference case.

Micro hybrid vehicles, defined here as conventional gasoline vehicles with micro hybrid systems that manage engine operation at idle, represent 28 percent of new LDV sales in 2040, the largest share among vehicles using diesel, alternative fuels, hybrid-electric, or all-electric systems.

Flex-fuel vehicles (FFVs), which can use blends of ethanol up to 85 percent, represent the second largest share of these vehicle types in 2040, at 7 percent of all new LDV sales. Current incentives for manufacturers selling FFVs, which are available in the form of fuel economy credits earned for CAFE compliance, expire in 2019. As a result, the FFV share of LDV sales rises over the next decade and then declines.

Sales of hybrid electric and all-electric vehicles that use stored electric energy for motive power grow considerably in the Reference case (Figure 73). Gasoline- and diesel-electric hybrid vehicles account for 6 percent of total LDV sales in 2040; and plug-in hybrid and all-electric vehicles account for 3 percent of total LDV sales, or 6 percent of sales of vehicles using diesel, alternative fuels, hybrid, or all-electric systems.

The diesel vehicle share of total sales remains constant over the projection period at about 4 percent of total LDV sales. Light-duty gaseous and fuel cell vehicles account for less than 1 percent of new vehicle sales throughout the projection period because of limited fueling infrastructure and high incremental vehicle costs.

Heavy-duty vehicles dominate natural gas consumption in the transportation sector


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Natural gas, as compressed natural gas (CNG) and liquefied natural gas (LNG), is the fastest-growing fuel in the transportation sector, with an average annual growth rate of 11.9 percent from 2011 to 2040 (Figure 74). HDVs—which include tractor trailers, vocational vehicles, buses, and heavy-duty pickups and vans with a gross vehicle weight rating (GVWR) of 10,001 pounds or more—lead the growth in natural gas demand throughout the projection period. Natural gas fuel consumption by HDVs increases from almost zero in 2011 to more than 1 quadrillion Btu in 2040, at an average annual growth rate of 14.6 percent.

Although HDVs fueled by natural gas have significant incremental costs in comparison with their diesel-powered counterparts, the increase in natural gas consumption for HDVs is spurred by low prices of natural gas compared with diesel fuel, as well as purchases of natural gas vehicles for relatively high-VMT applications, such as tractor trailers.

The total number of miles traveled annually by HDVs grows by 82 percent in the Reference case, from 240 billion miles in 2011 to 438 billion miles in 2040, for an average annual increase of 2.1 percent. HDVs, those with a GVWR greater than 26,000 pounds (primarily tractor trailers), account for about three-fourths of truck VMT and 91 percent of natural gas consumption by all HDVs in 2040. The rise in VMT is supported by rising economic output over the projection period and an increase in the number of trucks on the road, from 9.0 million in 2011 to 13.7 million in 2040.

Endnotes for Market Trends: Transportation

126. S.C. Davis, S.W. Diegel, and R.G. Boundy, Transportation Energy Databook: Edition 31, ORNL-6987 (Oak Ridge, TN: July 2012), Chapter 2, Table 2.1, “U.S. Consumption of Total Energy by End-Use Sector, 1973-2011.�
127. S.C. Davis, S.W. Diegel, and R.G. Boundy, Transportation Energy Databook: Edition 31, ORNL-6987 (Oak Ridge, TN: July 2012), Chapter 4, Table 4.6, “New Retail Sales of Trucks 10,000 Pounds GVWR and Less in the United States, 1970-2011.�
128. U.S. Department of Transportation, National Highway Safety Administration, "Summary of Fuel Economy Performance" (Washington, DC: October 2012), http://www.nhtsa.gov/staticfiles/rulemaking/pdf/cafe/Oct2012_Summary_Report.pdf.
129. U.S. Environmental Protection Agency and National Highway Traffic Safety Administration, "Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final Rule," Federal Register, Vol. 75, No. 88 (Washington, DC: May 7, 2010), https://www.federalregister.gov/articles/2010/05/07/2010-8159/light-duty-vehicle-greenhouse-gas-emission-standards-and-corporate-average-fuel-economy-standards.
130. U.S. Environmental Protection Agency and National Highway Traffic Safety Administration, 2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards; Final Rule, Federal Register, Vol. 77, No. 199 (Washington, DC: October 15, 2012), https://www.federalregister.gov/articles/2012/10/15/2012-21972/2017-and-later-model-year-light-duty-vehicle-greenhouse-gas-emissions-and-corporate-average-fuel.
131. Light-duty vehicle fuel economy includes alternative-fuel vehicles and banked credits towards compliance.

Reference Case Tables
Table 2. Energy Consumption by Sector and Source - United States XLS
Table 2.1. Energy Consumption by Sector and Source - New England XLS
Table 2.2. Energy Consumption by Sector and Source - Middle Atlantic XLS
Table 2.3. Energy Consumption by Sector and Source - East North Central XLS
Table 2.4. Energy Consumption by Sector and Source - West North Central XLS
Table 2.5. Energy Consumption by Sector and Source - South Atlantic XLS
Table 2.6. Energy Consumption by Sector and Source - East South Central XLS
Table 2.7. Energy Consumption by Sector and Source - West South Central XLS
Table 2.8. Energy Consumption by Sector and Source - Mountain XLS
Table 2.9. Energy Consumption by Sector and Source - Pacific XLS
Table 7. Transportation Sector Key Indicators and Delivered Energy Consumption 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 18.1. Energy-Related Carbon Dioxide Emissions by Sector and Source - New England XLS
Table 18.2. Energy-Related Carbon Dioxide Emissions by Sector and Source - Middle Atlantic XLS
Table 18.3. Energy-Related Carbon Dioxide Emissions by Sector and Source - East North Central XLS
Table 18.4. Energy-Related Carbon Dioxide Emissions by Sector and Source - West North Central XLS
Table 18.5. Energy-Related Carbon Dioxide Emissions by Sector and Source - South Atlantic XLS
Table 18.6. Energy-Related Carbon Dioxide Emissions by Sector and Source - East South Central XLS
Table 18.7. Energy-Related Carbon Dioxide Emissions by Sector and Source - West South Central XLS
Table 18.8. Energy-Related Carbon Dioxide Emissions by Sector and Source - Mountain XLS
Table 18.9. Energy-Related Carbon Dioxide Emissions by Sector and Source - Pacific XLS
Table 19. Energy-Related Carbon Dioxide Emissions by End Use XLS
Table 36. Transportation Sector Energy Use by Mode and Type XLS
Table 37. Transportation Sector Energy Use by Fuel Type Within a Mode XLS
Table 38. Light-Duty Vehicle Energy Consumption by Technology Type and Fuel Type XLS
Table 39. Light-Duty Vehicle Sales by Technology Type - United States XLS
Table 39.1. Light-Duty Vehicle Sales by Technology Type - New England XLS
Table 39.2. Light-Duty Vehicle Sales by Technology Type - Middle Atlantic XLS
Table 39.3. Light-Duty Vehicle Sales by Technology Type - East North Central XLS
Table 39.4. Light-Duty Vehicle Sales by Technology Type - West North Central XLS
Table 39.5. Light-Duty Vehicle Sales by Technology Type - South Atlantic XLS
Table 39.6. Light-Duty Vehicle Sales by Technology Type - East South Central XLS
Table 39.7. Light-Duty Vehicle Sales by Technology Type - West South Central XLS
Table 39.8. Light-Duty Vehicle Sales by Technology Type - Mountain XLS
Table 39.9. Light-Duty Vehicle Sales by Technology Type - Pacific XLS
Table 40. Light-Duty Vehicle Stock by Technology Type XLS
Table 41. Light-Duty Vehicle Miles per Gallon by Technology Type XLS
Table 42. Light-Duty Vehicle Miles Traveled by Technology Type XLS
Table 43. Summary of New Light-Duty Vehicle Size Class Attributes XLS
Table 44. Transportation Fleet Car and Truck Fuel Consumption by Type and Technology XLS
Table 45. Transportation Fleet Car and Truck Sales by Type and Technology XLS
Table 46. Transportation Fleet Car and Truck Stock by Type and Technology XLS
Table 47. Transportation Fleet Car and Truck Vehicle Miles Traveled by Type and Technology XLS
Table 48. Air Travel Energy Use XLS
Table 49. Freight Transportation Energy Use XLS
Table 51. Technology Market Penetration in Light-Duty Vehicles XLS
Table 52. New Light-Duty Vehicle Fuel Economy XLS
Table 53. New Light-Duty Vehicle Prices XLS
Table 54. New Light-Duty Vehicle Range XLS