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AEO2014 Early Release Overview

Release Date: December 16, 2013   |  Full Report Release Date: Early Spring 2014   |  correction   |   Report Number: DOE/EIA-0383ER(2014)

Energy Consumption by Primary Fuel

Total primary energy consumption grows by 12% in the AEO2014 Reference case, from 95 quadrillion Btu in 2012 to 106 quadrillion Btu in 2040—1.3 quadrillion Btu less than in AEO2013 (Figure 8). The fossil fuel share of energy consumption falls from 82% in 2012 to 80% in 2040, as consumption of petroleum-based liquid fuels declines, largely as a result of slower growth in VMT and increased vehicle efficiency.

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Total U.S. consumption of petroleum and other liquids, which was 35.9 quadrillion Btu (18.5 MMbbl/d) in 2012, increases to 36.9 quadrillion Btu (19.5 MMbbl/d) in 2018, then declines to 35.4 quadrillion Btu (18.7 MMbbl/d) in 2034 and remains at that level through 2040. Total consumption of domestically produced biofuels increases slightly through 2022 and then remains relatively flat. Production of cellulosic biofuels is currently well under 1% of the EISA2007 targets.29 With the PTC for cellulosic biofuels scheduled to expire at the end of 2013, production of cellulosic biofuels remains below the EISA2007 target through the projection period. Within the transportation sector, which dominates demand for petroleum and other liquids, there is a shift from motor gasoline (losing more than 10% of its share of total transportation petroleum and other liquids demand over the projection) to distillate (gaining slightly less than 10% of the total). The increased use of compressed natural gas and LNG in vehicles also offsets about 3% of petroleum and other liquids consumption in the transportation sector in 2040.

Domestic natural gas consumption in the AEO2014 Reference case rises from 25.6 Tcf in 2012 to 31.6 Tcf in 2040 (about 2.1 Tcf higher than in the AEO2013 Reference case). The largest share of the growth is for electricity generation. Demand for natural gas in the electric power sector increases from 9.3 Tcf in 2012 to 11.2 Tcf in 2040, with a portion of the growth attributable to the retirement of 50 gigawatts of coal-fired capacity by 2021. Natural gas consumption in the industrial sector is also higher in AEO2014 than was projected in AEO2013, as a result of the rejuvenation of the industrial sector as it benefits from surging shale gas production that is accompanied by slower growth of natural gas prices. Industries such as bulk chemicals, which use natural gas as a feedstock, are more strongly affected than others. In the residential sector, natural gas consumption declines throughout the projection.

Total coal consumption increases from 17.3 quadrillion Btu (891 MMst) in 2012 to 18.7 quadrillion Btu (979 MMst) in 2040 in the AEO2014 Reference case. Coal consumption, mostly for electric power generation, falls off in 2016, the first year of the MATS. After 2016, coal-fired electricity generation increases slowly over the next 10 years as the remaining coal-fired capacity is used more intensively, but little capacity is added. Coal consumption in the electric power sector in 2040 is 17.3 quadrillion Btu (909 MMst) in the AEO2014 Reference case. This level is about 1.4 quadrillion Btu (75 MMst) lower than in the AEO2013 Reference case. No coal is consumed for CTL technology in the AEO2014 Reference case.

With the implementation of the federal RFS for transportation fuels and state renewable portfolio standards for electricity generation, consumption of marketed renewable fuels grows by 1.4% per year in the AEO2014 Reference case. Marketed renewable energy includes wood, municipal waste, other biomass, and hydroelectricity in the end-use sectors; hydroelectricity, geothermal, municipal solid waste, biomass, solar, and wind power in the electric power sector; and ethanol for gasoline blending and biomass-based diesel in the transportation sector, of which 1.5 quadrillion Btu is included with petroleum and other liquid fuels consumption in 2040. Excluding hydroelectricity, renewable energy consumption in the electric power sector grows from 1.9 quadrillion Btu in 2012 to 4.5 quadrillion Btu in 2040, with biomass accounting for 27% of the growth and wind 39%. Generation of electricity from solar photovoltaic energy shows the fastest growth, starting from a small base and accounting for 7.5% of total electricity generation from all nonhydropower renewable energy sources in 2040.


29Based on 2010, 2011, 2012, and 2013 evaluations of the volumes of cellulosic biofuels available, EPA substantially reduced the cellulosic biofuels obligation under the RFS for those years, with the 2013 obligation set at 6 million ethanol-equivalent gallons, less than 1% of the legislated target of 1 billion gallons.