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Annual Energy Outlook 2014

Release Date: May 7, 2014   |  Next Early Release Date: January 15, 2015   |  See schedule  |  full report

Comparison with other projections

IHS Global Insight (IHSGI) is the only organization available to the U.S. Energy Information Administration (EIA) that produces an energy projection with detail and a time horizon that are comparable to those in the Annual Energy Outlook 2014 (AEO2014). Other organizations, however, address one or more aspects of the U.S. energy market. The most recent projection from IHSGI, as well as others that concentrate on economic growth, international oil prices, energy consumption, electricity, natural gas, petroleum, and coal, are compared here with the AEO2014 Reference case.

CP1. Economic growth

The range of projected economic growth in the outlooks included in the comparison tends to be wider over the first three years of the projection than over a longer period, because the group of variables—such as population, productivity, and labor force growth—that influence long-run economic growth is smaller than the group of variables that affect projections of short-run growth. The average annual rate of growth of real gross domestic product (GDP) from 2012 to 2015 ranges from 2.4% to 3.0% (Table CP1); while the 13-year annual average growth, from 2012 to 2025, ranges from 2.5% to 2.8%.

From 2012 to 2015, real GDP grows at a 2.6% average annual rate in the AEO2014 Reference case, lower than projected by the Office of Management and Budget (OMB), the Social Security Administration (SSA) (in The 2013 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds), and Oxford Economic Group (OEG), but higher than that projected by Interindustry Forecasting Project at the University of Maryland (INFORUM). The AEO2014 projection of GDP growth is similar to the average annual rate of 2.6% over the same period projected by IHSGI and the Congressional Budget Office (CBO) and by the International Energy Agency (IEA) in its November 2013 World Energy Outlook Current Policies Scenario.

The average annual GDP growth of 2.5% in the AEO2014 Reference case from 2012 to 2025 is in the low range of the outlooks, with IHSGI and ExxonMobil projecting similar growth, while OMB and INFORUM project slightly higher mid-term growth, at 2.6%/year. SSA and OEG project annual average growth of 2.7% from 2012 to 2025. IEA projects the highest midterm growth, at 2.8%/year from 2012 to 2025. The CBO projects the lowest annual GDP growth, averaging 2.4% from 2012 to 2025.

There are few public or private projections of GDP growth for the United States that extend to 2040. The AEO2014 Reference case projects 2.4% average annual GDP growth from 2012 to 2040, consistent with trends in labor force and productivity growth. SSA, IEA, ExxonMobil, and INFORUM also project GDP growth averaging 2.4%/year from 2012 to 2040, while IHSGI and OEG project higher rates of 2.5% and 2.6%/year, respectively, from 2012 to 2040.

Table CP1. Comparisons of average annual economic growth projections, 2012-40
  Average annual percentage growth rates
Projection 2012-2015 2012-2025 2025-2040 2012-2040
AEO2014 (Reference case) 2.6 2.5 2.4 2.4
AEO2013 (Reference case) 2.6 2.6 2.4 2.5
IHSGI (May 2013)  2.6 2.5 2.4 2.5
OMB (January 2014)a 2.7 2.6 -- --
CBO (February 2014)a 2.6 2.5 -- --
INFORUM (November 2013) 2.4 2.6 2.3 2.4
Social Security Administration (August 2013) 3.0 2.7 2.2 2.4
IEA (2013)b 2.6 2.8 -- 2.4
ExxonMobil -- 2.5 2.2 2.4
OEG (January 2013) 2.7 2.7 2.5 2.6
-- = not reported or not applicable.
a OMB and CBO projections end in 2024, and growth rates cited are for 2012-24. AEO projections end in 2040.
b IEA publishes U.S. growth rates for certain intervals: 2011-15 growth is 2.6%, 2011-20 growth is 2.8%, and 2011-35 growth is 2.4%.
Sources: Comparisons of average annual economic growth projections, 2012-40: AEO2014 (Reference case): AEO2014 National Energy Modeling System, run REF2014.D102413A. AEO2013 (Reference case): AEO2013 National Energy Modeling System, run REF2013.D102312A. IHSGI: IHS Global Insight, 30-year U.S. Economic Forecast (Lexington, MA, October 2013), http://www.ihs.com/products/global-insight/index.aspx (subscription site). OMB: Office of Management and Budget, Budget of the United States Government, Fiscal Year 2015 (Washington, DC, January 2014), http://www.whitehouse.gov/sites/default/ files/omb/budget/fy2015/assets/budget.pdf. CBO: Congressional Budget Office, The Budget and Economic Outlook: 2014 to 2024 (Washington, DC, February 2014), http://www.cbo.gov/publication/45010. INFORUM: INFORUM AEO2012 Reference Case, Lift (Long-term Interindustry Forecasting Tool) Model (College Park, MD, January 2014), http://inforumweb.umd.edu/services/models/ lift.html. SSA: Social Security Administration, OASDI Trustees Report, The Long-Range Economic Assumptions for the 2013 Trustees Report (U.S. Government Printing Office, Washington, DC, May 2013), http://www.ssa.gov/oact/tr/2013/2013_Long-Range_ Economic_Assumptions.pdf. IEA (2013): International Energy Agency, World Energy Outlook 2013 (Paris, France, November 2013), http://www.iea.org/Textbase/nppdf/stud/13/weo2013.pdf. ExxonMobil: ExxonMobil 2014 The Outlook for Energy: A View to 2040 (Irving, TX, 2013), http://www.exxonmobil.com/Corporate/energy_outlook.aspx. OEG: Oxford Economics, Ltd., 2014 Long Term Forecast (Oxford, United Kingdom, January 2014), http://www.OxfordEconomics.com (subscription site).

CP2. Oil prices

In the AEO2014 Reference case, oil prices are represented by spot prices for North Sea Brent crude. Prices decline in the Reference case from $112/barrel in 2012 to about $109/barrel in 2025 and then rise slowly to $130/barrel in 2035 and $141/barrel in 2040 (Table CP2). In AEO2014, the North Sea Brent crude oil price is tracked as the main benchmark for world oil prices, because it reflects the marginal price paid by refineries for imported light, sweet crude oil (used to produce petroleum products for consumers) better than does the West Texas Intermediate (WTI) crude oil price. The WTI price continued to trade at a discount relative to other world oil prices in 2013. The discount narrowed through the end of the summer, as a result of new U.S. oil transportation infrastructure out of the market center for WTI prices in Cushing, Oklahoma, and refineries running at record levels. In 2012, the WTI and North Sea Brent prices differed by $18/barrel. In the AEO2014 Reference case, the gap closes to $2/barrel in 2020 and remains at that level throughout the projection period, following resolution of most of the transportation system constraints in the United States. In each of the other outlooks in the comparison, oil spot prices are based on either North Sea Brent or WTI prices, with the exception of IEA spot prices, which are based on the international average of crude oil import prices within the member countries of the Organization for Economic Cooperation and Development (OECD).

The range of oil price projections for both the near term and the long term reflects market volatility caused by persistent political instability in major producing countries in the developing world, as well as different assumptions about the future of the world economy. However, with the exception of Strategic Energy & Economic Research (SEER), the projections show oil prices rising over the entire projection period. The projections for 2025 range from $60/barrel to $117/barrel for WTI and from $64/barrel to $127/ barrel for North Sea Brent. The projections for 2040 range from $52/barrel to $164/barrel for WTI and from $54/barrel to $171/ barrel for North Sea Brent. The wide range underscores the uncertainty inherent in the projections. Again, with the exception of SEER, the spread of the projections is encompassed in the AEO2014 Low and High Oil Price cases, which range from $70/barrel to $159/barrel for Brent in 2025 and from $75/barrel to $204/barrel in 2040.

Table CP2. Comparisons of oil price projections, 2025, 2035, and 2040
(2012 dollars per barrel)
  Projections
  2012 2025 2035 2040
  WTI Brent WTI Brent WTI Brent WTI Brent
AEO2014 (Reference case) 94.12 111.65 106.99 108.99 127.77 129.77 139.46 141.46
AEO2014 (Low Oil Price case) 94.12 111.65 68.40 70.40 71.40 73.40 72.90 74.90
AEO2014 (High Oil Price case) 94.12 111.65 156.62 158.62 185.92 187.92 202.24 204.24
AEO2013 (Reference case) 94.12 110.43 117.41 119.45 145.96 147.99 163.54 165.57
SEER 94.15 111.63 60.00 64.00 54.00 56.00 52.00 54.00
ArrowHead Economics 94.12 111.65 101.94 108.34 119.61 124.00 131.34 135.42
Energy Ventures Associates (EVA) 94.12 -- 85.64 -- 106.01 -- -- --
INFORUM -- 111.65 -- 123.86 -- 154.26 -- 171.16
Energy Security Analysis (ESAI) -- 111.50 -- 99.10 -- 125.30 -- 131.30
IEA (Current Policies Scenario)a 94.12 111.65 -- 127.00 -- 145.00 -- --
-- = not reported or not applicable.
a IEA mixed crude oil import prices are based on OECD member country reporting.
Sources: Comparisons of oil price projections, 2025, 2035, and 2040: AEO2014 (Reference case): AEO2014 National Energy Modeling System, run REF2014.D102413A. AEO2014 (Low Oil Price case): AEO2014 National Energy Modeling System, run LOWPRICE.D120613. AEO2014 (High Oil Price case): AEO2014 National Energy Modeling System, run HIGHPRICE.D120613A. AEO2013 (Reference case): AEO2013 National Energy Modeling System, run REF2013.D102312A. Energy SEER: Strategic Energy & Economic Research, Inc., e-mail from Michael Lynch (Amherst, MA, January 2014). ArrowHead Economics: ArrowHead Economics LLC, e-mail from Dale Nesbitt (Los Altos Hills, CA, January 2014), www.arrowheadeconomics.com. EVA: Energy Ventures Analysis, Inc., e-mail from Anthony Petruzzo, January 17, 2014. INFORUM: INFORUM AEO2012 Reference Case, Lift (Longterm Interindustry Forecasting Tool) Model (College Park, MD, January 2014), http://inforumweb.umd.edu/services/models/lift.html. ESAI: Energy Security Analysis, Inc., e-mail from Sarah Emerson (Wakefield, MA, March 2014), www.esai.com. IEA (Current Policies Scenario): International Energy Agency, World Energy Outlook 2013 (Paris, France, November 2013), http://www.iea.org/ Textbase/nppdf/stud/13/weo2013.pdf.

CP3. Total energy consumption

Four projections by other organizations—INFORUM, IHSGI, ExxonMobil, and IEA—include energy consumption by sector. To allow comparison with the IHSGI projection, the AEO2014 Reference case was adjusted to remove coal-to-liquids (CTL) heat and power, natural gas-to-liquids heat and power, biofuels heat and coproducts, and natural gas feedstock use. To allow comparison with the ExxonMobil projection, electricity consumption in each sector was removed from the AEO2014 Reference case. To allow comparison with the IEA projections, the AEO2014 Reference case projections for the residential and commercial sectors were combined to produce a buildings sector projection (Table CP3). The IEA projections have a base year of 2011 and extend only through 2035. ExxonMobil provided base year data for 2010.

Both IEA and ExxonMobil account for electricity generation with renewable energy at the electricity conversion rate of 3,412 Btu per kilowatthour rather than at a displaced fossil fuel heat rate used in the AEO and other projections, which lowers their estimates of total energy consumption. ExxonMobil also includes a cost for carbon dioxide (CO2) emissions, which helps to explain the lower level of consumption in their outlook. Although the IEA's central case also includes a cost for CO2 emissions, its Current Policies Scenario (which assumes that no new policies are added to those in place in mid-2013) is used for comparison in this analysis, because it corresponds better with the assumptions in the AEO2014 Reference case. In all years shown, ExxonMobil and IEA show lower total energy consumption in comparison with the AEO2014 Reference case. Total energy consumption is higher in all years of the IHSGI projection than in the AEO2014 Reference case but starts from a lower level.

The INFORUM projection of total energy consumption in 2040 is similar to the AEO2014 Reference case projection, but the INFORUM projection for the transportation sector is 1.5 quadrillion Btu higher than the AEO2014 projection, and the buildings sector is 0.6 quadrillion Btu higher. Those higher levels of energy consumption are offset by a 2.5 quadrillion Btu lower level of industrial sector consumption in the INFORUM projection. For the transportation sector, the INFORUM projection features strong growth in diesel fuel demand from 2011 to 2020 (more than 1.2 quadrillion Btu above the 2011 level). However, from 2020 to 2040, growth is less than one-half (0.6 quadrillion Btu) that in the earlier period. The INFORUM projection for motor gasoline is lower than the AEO2014 projection in 2020 but does not decline as quickly afterward. The INFORUM projection for the industrial sector is lower than the AEO2014 projection despite higher industrial output, implying greater efficiency improvement.

IHSGI projects significantly higher electricity consumption for all sectors than the AEO2014 Reference case, which helps to explain much of the difference in total energy consumption between the two projections. In the IHSGI projection, the electric power sector consumes 4.9 quadrillion Btu more energy in 2040 than in the AEO2014 Reference case. The greater use of electricity in the IHSGI projection, including 152 trillion Btu used in the transportation sector (more than double the amount in AEO2014), also results in higher electricity prices than in the AEO2014 Reference case.

Total energy consumption declines in the ExxonMobil projection, primarily as a result of the inclusion of a tax on CO2 emissions, which is not considered in the AEO2014 Reference case. Energy consumption in the transportation sector declines from 2010 levels in the ExxonMobil projection, based on expected policy changes, efficiency improvements, and the penetration of new technologies.

Total energy consumption in the IEA projection is higher in 2035 than in 2011 because of a 3.7 quadrillion Btu increase in buildings sector energy consumption, including a 3.1 quadrillion Btu increase in electricity consumption. IEA projects little change in energy use in the industrial sector from 2020 to 2035. Energy consumption in the transportation sector is projected to increase by 0.3 quadrillion Btu through 2020, decline by 0.3 quadrillion Btu from 2020 through 2030, and increase by 0.4 quadrillion Btu from 2030 to 2035. The increases from 2011 through 2020 and from 2030 through 2035 reflect growing biofuel use for transportation. The decline from 2020 through 2030 reflects a drop in petroleum use. The IEA projection for total energy consumption in 2035 is higher than the ExxonMobil projection but considerably lower than projected in the AEO2014 Reference case for both 2030 and 2035.

Table CP3. Comparisons of energy consumption projections by sector, 2025, 2035, and 2040
(quadrillion Btu)
Sector AEO2014
Reference
INFORUM IHSGI ExxonMobil IEA
  2012 (except where noted) a
Residential 10.4 10.6 10.0 11.0b --
Residential excluding electricity 5.7 5.9 5.4 5.0b --
Commercial 8.3 8.3 8.2 8.0b --
Commercial excluding electricity 3.8 3.8 3.7 4.0b --
Buildings sector 18.7 18.9 18.3 -- 19.0c
Industrial 23.6 23.9 -- 24.0b 23.5c
Industrial excluding electricity 20.3 20.5 -- 20.0b --
Lossesd 0.5 -- -- -- --
Natural gas feedstocks 0.9 -- -- -- --
Industrial removing losses and feedstocks 22.2 -- 21.8 -- --
Transportation 26.7 26.7 25.9 27.0b 23.4c
Electric power 38.5 38.2 39.4 37.0b 36.3c
Less: electricity demande 12.6 12.6 12.6 -- 14.9c
Electric power losses 26.0 -- -- -- --
Total primary energy 95.0 95.1 -- 94.0b 86.9c
Excluding lossesd and feedstocks 93.6 -- 92.7 -- --
      2025    
Residential 10.8 11.2 11.6 10.0 --
Residential excluding electricity 5.8 6.0 5.8 5.0 --
Commercial 9.1 9.2 9.4 9.0 --
Commercial excluding electricity 4.1 4.3 4.0 4.0 --
Buildings sector 19.9 20.4 21.0 -- --
Industrial 29.0 26.8 -- 26.0 --
Industrial excluding electricity 24.8 22.8 -- 21.0 --
Lossesd 0.8 -- -- -- --
Natural gas feedstocks 1.1 -- -- -- --
Industrial removing losses and feedstocks 27.2 -- 24.9 -- --
Transportation 25.6 26.7 27.6 26.0 --
Electric power 42.2 42.2 47.1 37.0 --
Less: electricity demande 14.3 14.2 15.7 -- --
Electric power losses 27.9 -- -- -- --
Total primary energy 102.5 101.9 -- 93.0 --
Excluding lossesd and feedstocks 100.6 -- 105.0 -- --
      2035    
Residential 10.9 11.5 12.2 10.0 --
Residential excluding electricity 5.5 5.7 5.7 5.0 --
Commercial 9.7 9.8 10.1 9.0 --
Commercial excluding electricity 4.3 4.4 4.0 3.0 --
Buildings sector 20.6 21.3 22.3 -- 22.7
Industrial 29.8 26.9 -- 26.0 25.5
Industrial excluding electricity 25.5 23.1 -- 20.0 --
Lossesd 0.8 -- -- -- --
Natural gas feedstocks 1.0 -- -- -- --
Industrial removing losses and feedstocks 28.0 -- 25.5 -- --
Transportation 25.1 26.4 27.6 25.0 23.7
Electric power 43.9 44.0 49.6 36.0 42.3
Less: electricity demande 15.2 15.1 17.3 -- 18.6
Electric power losses 28.7 -- -- -- --
Total primary energy 104.3 103.5 -- 90.0 95.3
Excluding lossesd and feedstocks 102.5 -- 107.8 -- --
      2040    
Residential 10.9 11.7 12.6 10.0 --
Residential excluding electricity 5.3 5.6 5.7 5.0 --
Commercial 10.2 10.1 10.3 9.0 --
Commercial excluding electricity 4.5 4.4 4.1 3.0 --
Buildings sector 21.2 21.8 22.9 -- --
Industrial 30.2 27.7 -- 25.0 --
Industrial excluding electricity 25.9 23.9 -- 20.0 --
Lossesd 0.8 -- -- -- --
Natural gas feedstocks 1.0 -- -- -- --
Industrial removing losses
and feedstocks
28.4 -- 26.1 -- --
Transportation 25.5 27.0 27.8 24.0 --
Electric power 45.2 45.1 50.1 36.0 --
Less: electricity demande 15.8 15.6 17.9 -- --
Electric power losses 29.4 -- -- -- --
Total primary energy 106.3 106.0 -- 88.0 --
Excluding lossesd and feedstocks 104.5 -- 108.9 -- --
-- = not reported.
aBase year varies by projection or data for 2012 may differ based on coverage.
bExxonMobil data are for 2010.
cIEA data are for 2011.
dLosses in CTL and biofuel production.
eEnergy consumption in the sectors includes electricity demand purchases from the electric power sector, which are subtracted to avoid double counting in deriving total primary energy consumption.
Sources: Comparisons of energy consumption projections by sector, 2025, 2035, and 2040: AEO2014 (Reference case): AEO2014 National Energy Modeling System, run REF2014.D102413A. INFORUM: INFORUM AEO2012 Reference Case, Lift (Longterm Interindustry Forecasting Tool) Model (College Park, MD, January 2014), http://inforumweb.umd.edu/services/models/lift.html. IHSGI: IHS Global Insight, 30-year U.S. Economic Forecast (Lexington, MA, October 2013), http://www.ihs.com/products/ global-insight/index.aspx (subscription site). ExxonMobil: ExxonMobil 2014 The Outlook for Energy: A View to 2040 (Irving, TX, 2013), http://www.exxonmobil.com/Corporate/energy_outlook.aspx. IEA (Current Policies Scenario): International Energy Agency, World Energy Outlook 2013 (Paris, France, November 2013), http://www.iea.org/Textbase/nppdf/stud/13/weo2013.pdf.

CP4. Electricity

Table CP4 compares summary results for electricity from the AEO2014 Reference case with projections from EVA, IHSGI, INFORUM, and ICF International, Incorporated (ICF). The AEO2014 Reference case, EVA, and INFORUM project modest growth in total electricity sales over the coming decades. The AEO2014 Reference case projects 4,178 billion kilowatthours (kWh) of total electricity sales in 2025. By comparison, IHSGI projects 4,600 billion kWh of total electricity sales in 2025, which is 10% higher than the AEO2014 Reference case projection, and higher than the EVA and INFORUM projections. The IHSGI projection for total electricity sales is also the highest among the projections in 2035 and 2040. Similarly, IHSGI's individual sector level sales projections are the highest among the projections in 2025, 2035 and 2040.

The AEO2014 Reference case, IHSGI, and INFORUM provide projections for average electricity prices by sector for 2025, 2035, and 2040. On average, the lowest electricity price projections are in the AEO2014 Reference case, and the highest are in the INFORUM projection. The lowest prices by sector in 2025 are in the AEO2014 Reference case (12.3 cents/kWh for the residential sector, 10.4 cents/kWh for the commercial/other sector, and 7.2 cents/kWh for the industrial sector). The highest average electricity prices by sector in 2025 are in the INFORUM projection (15.0 cents/kWh for the residential sector, 12.7 cents/kWh for the commercial sector, and 8.4 cents/kWh for the industrial sector). The AEO2014 Reference case, IHSGI, and INFORUM reflect similar relative price patterns for 2035 and 2040.

The AEO2014 Reference case projects total U.S. generation plus imports of 4,658 billion kWh for 2025. By comparison, IHSGI projects 5,108 billion kWh of total U.S. generation plus imports for 2025, which is the highest among the projections reported. IHSGI's projections for total U.S. electricity generation plus imports continue to be the highest among the projections considered for 2035 and 2040.

In the AEO2014 Reference case, generation from coal-fired plants is projected to exceed generation from natural-gas fired plants by 270 billion kWh in 2025. By comparison, in the IHSGI projection for 2025, total natural gas-fired generation is projected to exceed coal-fired generation by 394 billion kWh. IHSGI has previously projected that the total generation from natural gas-fired plants would exceed that for coal-fired plants in 2024 as a result of the assumed implementation of a carbon tax. In the AEO2014 Reference case, which is based on current laws and regulations and does not include a carbon tax, generation from natural gasfired plants does not surpass generation from coal-fired plants until 2035.

There are varying outlooks for generation from U.S. nuclear power plants. Nuclear generation projections for the year 2025 range from a low of 779 billion kWh in the AEO2014 Reference case to a high of 875 billion kWh in the IHSGI projection. The AEO2014 Reference case reflects increasing U.S. nuclear generation, with increases to 786 billion kWh in 2035 and 811 billion kWh in 2040. In the IHSGI projection, nuclear generation increases to 898 billion kWh in 2035, and remains at 898 billion kWh in 2040. Both ICF and EVA project declines in nuclear generation through 2040.

Generation from nonhydroelectric renewable resources constitutes a significant portion of generation growth. However, the share of total generation from nonhydroelectric renewables varies across the projections. For instance, in 2035 the AEO2014 Reference case and EVA, respectively, show 5.8% and 5.8% shares of total generation from wind and solar, and IHSGI and ICF, respectively, show 9.2% and 8.5% shares from wind and solar. Part of this variation may be due to the adoption of different assumptions regarding the extension or enhancement of federal and state policies.

Total generating capacity by fuel in 2025 (including combined heat and power [CHP]) is fairly similar across the projections, ranging from 1,109 gigawatts (GW) in the EVA projection (the AEO2014 Reference case projects 1,110 gigawatts) to 1,225 GW in the IHSGI projection. IHSGI projects slightly more growth in total generating capacity, corresponding to their higher projections for both sales and generation.

Projections for capacity retirements vary widely over the 2012-40 period. Cumulative capacity retirements from 2013 through 2025 are closely aligned, ranging from a high of 104 GW in the ICF projection to 87 GW in the AEO2014 Reference case and 98 GW in the IHSGI projection. The majority of the retirements in the ICF, AEO2014 Reference case, and IHSGI projections from 2013 to 2025 are attributed to reductions in coal-fired capacity. Coal-fired capacity also represents the largest portion of cumulative retirements from 2013 to 2040. However, there is substantial variation in the projected timing of coal retirements. In the AEO2014 Reference case there are no incremental coal-fired capacity retirements from 2025 to 2035, but ICF and IHSGI project incremental coal-fired capacity retirements of 3 GW and 41 GW, respectively, over the same period. In general, the projected coal-fired capacity retirements are balanced by increases in natural gas- and oil-fired capacity (dominated by natural gas) and hydroelectric/other capacity (dominated by wind and solar).

Table CP4. Comparisons of electricity projections, 2025, 2035, and 2040
(billion kilowatthours, except where noted)
      Other projections
Projection 2012 AEO2014
Reference
EVA IHSGI INFORUM ICF
        2025    
Average end-use price
(2012 cents per kilowatthour)a
9.8 10.1 -- 11.3 12.3 --
Residential 11.9 12.3 -- 13.6 15.0 --
Commercial 10.1 10.4 -- 11.7 12.7 --
Industrial 6.7 7.2 -- 7.6 8.4 --
Total generation plus net imports 4,102 4,658 4,324 5,108 -- 4,772
Coal 1,512 1,689 1,753 1,454 -- 1,684
Petroleum 23 19 -- 23 -- 15
Natural gasb 1,239 1,419 1,150 1,848 -- 1,505
Nuclear 769 779 846 875 -- 811
Hydroelectric/otherc 511 717 575 842 -- 756
Solar 11 42 26 -- -- 43
Wind 142 219 217 364 -- 268
Net imports 47 35 -- 66 -- --
Electricity salesd 3,686 4,178 4,067 4,600 4,141 --
Residential 1,375 1,467 1,428 1,703 1,508 --
Commercial/othere 1,331 1,459 1,420 1,621 1,460 --
Industrial 981 1,253 1,220 1,277 1,174 --
Capacity, including CHP (gigawatts)f 1,066 1,110 1,109 1,225 -- 1,123
Coal 310 262 254 263 -- 245
Oil and natural gas 471 527 539 567 -- 541
Nuclear 102 98 104 110 -- 103
Hydroelectric/otherg 182 223 211 285 -- 234
Solar 8 25 19 -- -- 27
Wind 59 76 80 124 -- 94
Cumulative capacity retirements from 2011 (gigawatts)h -- 87 -- 98 -- 104
Coal -- 51 -- 51 -- 66
Oil and natural gas -- 31 -- 45 -- 30
Nuclear -- 5 -- 2 -- 8
Hydroelectric/otherg -- 1 -- -- -- 1
      2035      
Average end-use price
(2012 cents per kilowatthour)a
9.8 10.7 -- 11.9 16.1 --
Residential 11.9 12.9 -- 14.4 19.3 --
Commercial 10.1 10.9 -- 12.3 16.4 --
Industrial 6.7 7.8 -- 8.0 10.9 --
Total generation plus net imports 4,102 5,034 4,765 5,606 --  5,242
Coal 1,512 1,679 1,661 1,203 -- 1,609
Petroleum 23 19 -- 22 -- 4
Natural gasb 1,239 1,726 1,828 2,362 -- 2,122
Nuclear 769 786 665 898 -- 593
Hydroelectric/otherc 511 793 611 1,066 -- 913
Solar 11 61 34 -- -- 49
Wind 142 227 241 513 -- 397
Net imports 47 31 -- 55 -- --
Electricity salesd 3,686 4,454 4,510 5,057 4,398 --
Residential 1,375 1,585 1,605 1,910 1,685 --
Commercial/othere 1,331 1,604 1,624 1,801 1,596 --
Industrial 981 1,265 1,281 1,347 1,117 --
Capacity, including CHP (gigawatts)f 1,066 1,237 1,215 1,385 -- 1,266
Coal 310 262 231 227 -- 244
Oil and natural gas 471 633 674 685 -- 660
Nuclear 102 99 84 114 -- 77
Hydroelectric/otherg 182 243 227 360 -- 286
Solar 8 36 25 -- -- 32
Wind 59 80 89 169 -- 138
Cumulative capacity retirements from 2011 (gigawatts)h -- 96 -- 172 -- 129
Coal -- 51 -- 92 -- 69
Oil and natural gas -- 40 -- 70 -- 30
Nuclear -- 5 -- 11 -- 29
Hydroelectric/otherg -- 1 -- -- -- 1
      2040      
Average end-use price
(2012 cents per kilowatthour)a
9.8 11.1 -- 12.1 19.1 --
Residential 11.9 13.3 -- 14.5 22.8 --
Commercial 10.1 11.3 -- 12.4 19.3 --
Industrial 6.7 8.2 -- 8.1 12.8 --
Total generation plus net imports 4,102 5,254 5,020 5,825 --  5,478
Coal 1,512 1,675 1,477 944 -- 1,483
Petroleum 23 19 -- 20 -- 4
Natural gasb 1,239 1,857 2,303 2,743 -- 2,497
Nuclear 769 811 611 898 -- 473
Hydroelectric/otherc 511 857 628 1,165 -- 1,021
Solar 11 86 35 -- -- 50
Wind 142 250 254 573 -- 491
Net imports 47 35 -- 55 -- --
Electricity salesd 3,686 4,623 4,757 5,256 4,539 --
Residential 1,375 1,657 1,704 2,004 1,783 --
Commercial/othere 1,331 1,693 1,742 1,869 1,651 --
Industrial 981 1,273 1,310 1,384 1,105 --
Capacity, including CHP (gigawatts)f 1,066 1,316 1,273 1,448 -- 1,344
Coal 310 262 202 176 -- 243
Oil and natural gas 471 687 764 763 -- 719
Nuclear 102 102 76 114 -- 62
Hydroelectric/otherg 182 265 231 395 -- 319
Solar 8 48 25 -- -- 32
Wind 59 87 93 189 -- 169
Cumulative capacity retirements from 2011 (gigawatts)h -- 97 -- 259 -- 152
Coal -- 51 -- 146 -- 70
Oil and natural gas -- 40 -- 102 -- 30
Nuclear -- 5 -- 11 -- 50
Hydroelectric/otherg -- 1 -- -- -- 1
-- = not reported.
aAverage end-use price includes the transportation sector.
bIncludes supplemental gaseous fuels. For EVA, represents total oil and natural gas.
cOther includes conventional hydroelectric, pumped storage, geothermal, wood, wood waste, municipal waste, other biomass, solar and wind power, batteries, chemicals, hydrogen, pitch, purchased steam, sulfur, petroleum coke, and miscellaneous technologies.
dElectricity sales for EVA and INFORUM reflect the sum of the individual sector level sales.
eOther includes sales of electricity to government and other transportation services.
fEIA capacity is net summer capability, including CHP plants and end-use generators.
gOther includes conventional hydroelectric, geothermal, wood, wood waste, all municipal waste, landfill gas, other biomass, solar, wind, pumped storage, and fuel cells.
hRetirements for AEO2014 reflect the electric power sector only.
Sources: Comparisons of electricity projections, 2025, 2035, and 2040: AEO2014 (Reference case): AEO2014 National Energy Modeling System, run REF2014.D102413A. EVA: Energy Ventures Analysis, Inc., e-mail from Anthony Petruzzo, January 17, 2014. IHSGI: IHS Global Insight, 30-year U.S. Economic Forecast (Lexington, MA, October 2013), http://www.ihs.com/products/globalinsight/ index.aspx (subscription site). INFORUM: INFORUM AEO2012 Reference Case, Lift (Long-term Interindustry Forecasting Tool) Model (College Park, MD, January 2014), http://inforumweb.umd.edu/services/models/lift.html. ICF: ICF International Integrated Energy Outlook Q1 2014, ICF Integrated Planning Model (IPM) and Gas Market Model (GMM) (Fairfax, VA, 1st Quarter 2014.

CP5. Natural gas

The projections for natural gas consumption, production, imports, and prices differ significantly among the outlooks (Table CP5). The variations result, in large part, from differences in underlying assumptions. For example, the AEO2014 Reference case assumes that current laws and regulations remain unchanged through the projection period, whereas some of the other projections include assumptions about anticipated policy developments over the period. In particular, the AEO2014 Reference case does not incorporate any future changes in policy directed at carbon emissions or other environmental issues, while some of the other outlooks include explicit assumptions about policies aimed at reducing carbon emissions.

Production

All of the outlooks shown in Table CP5 (with the exception of ExxonMobil, which did not provide production data) project increases in natural gas production from 2012, when production totaled 24.1 trillion cubic feet (Tcf). EVA projects the largest production increase, to 38.3 Tcf in 2035, or 59% more than the 2012 level. EVA is followed closely by IHSGI, which projects 38.1 Tcf of natural gas production in 2035, a 58% increase over 2012 levels. ICF projects the third-highest production growth after EVA and IHSGI, at 37.4 Tcf in 2035. ICF, EVA, and IHSGI all project significantly larger increases in natural gas production before 2025 than in the later years.

The AEO2014 Reference case and BP, p.l.c. (BP) project relatively modest growth in natural gas production, particularly in the near term. The two projections show natural gas production increasing more rapidly, on average, from 2012 to 2025 than from 2025 to 2035. In the AEO2014 Reference case, natural gas production rises by 50% from 2012 to 2035, when total production is 36.1 Tcf. BP projects a production increase of 46% from 2012 to 35.1 Tcf in 2035.

INFORUM shows by far the lowest growth in natural gas production from 2012 through 2035, at 15%, with total production of 27.7 Tcf in 2035. INFORUM also projects relatively higher production growth from 2012 to 2025 than from 2025 to 2035.

Net imports/exports

The AEO2014 Reference case projects the strongest export growth over the 2012-35 period, attributable to exports via pipeline and as liquefied natural gas (LNG). The United States becomes a net LNG exporter by 2016 and an overall net exporter of natural gas by 2018. In 2035, the United States has net exports of 5.5 Tcf of natural gas, as a result of further growth in both LNG exports and net pipeline exports. U.S. exports of LNG from new liquefaction capacity surpass 2.0 Tcf in 2020 and increase to 3.5 Tcf in 2029. In addition, net pipeline exports increase to 2.2 Tcf in the AEO2014 Reference case, buoyed by higher net pipeline exports to Mexico and lower net pipeline imports from Canada.

All of the other projections show the United States becoming a net natural gas exporter by 2020, but they differ from AEO2014 in terms of export levels. Both EVA and IHSGI show net exports peaking early in the projection period but declining through 2035, with net exports in 2035 that are less than one-quarter of those in the AEO2014 Reference case. Both EVA and IHSGI show the domestic sector consuming a greater portion of U.S. natural gas production than in the AEO2014 Reference case. In the EVA and IHSGI projections, U.S. net natural gas exports in 2035 total 1.0 and 1.3 Tcf, respectively. Unlike IHSGI, the EVA projection of 3.2 Tcf of net LNG exports in 2035 is fairly close to the 3.4 Tcf in the AEO2014 Reference case in 2035. EVA differs from the Reference case in that it projects net pipeline imports of natural gas into the United States after 2020, rather than net pipeline exports, with gross natural gas pipeline imports into the United States more than tripling between 2025 and 2035.

In the ICF projection, the United States becomes a net exporter of both pipeline gas and LNG by 2025, and remains so through 2035. The increase in net exports in the ICF projection, to 3.7 Tcf in 2035, is significantly larger than projected by EVA and IHSGI but significantly smaller than projected in the AEO2014 Reference case. The AEO2014 and ICF production and price projections are similar to each other, but the ICF projection shows less natural gas going to other countries and more consumed at home.

Consumption

In the AEO2014 Reference case, total domestic natural gas consumption increases by 19% from 2012 to 2035 when it totals 30.4 Tcf, which is the lowest projected increase in total consumption among the comparable projections. Although the INFORUM projection shows lower volumes, they are not comparable since they are missing natural gas consumed for lease and plant operations and as a pipeline fuel. The 4.8 Tcf increase in total domestic consumption in the AEO2014 Reference case is also 32% less than the projected 7.0 Tcf increase in natural gas net exports, whereas IHSGI, EVA, and ICF all show domestic consumption growth exceeding net export growth through 2035. The AEO2014 Reference case projects more rapid growth in industrial consumption from 2012 to 2035 (20%, to a total of 8.6 Tcf in 2035) than in power sector consumption (15%, to 10.7 Tcf in 2035). Some of the variation in electric sector consumption may be the result of different assumptions about potential fees on carbon emissions, which are not included in the AEO2014 Reference case.

IHSGI, EVA, and ICF show higher projections for total natural gas consumption in 2035 than in the AEO2014 Reference case, with consumption in the electric power sector accounting for a larger share of total U.S. consumption than other sectors. IHSGI shows the largest increase in electric power sector consumption through 2035, at 75%, with 2035 consumption totaling 16.2 Tcf. EVA shows a 70% increase, to 15.8 Tcf in 2035.

EVA differs from IHSGI in that it shows industrial consumption growing to 10.6 Tcf in 2035 (the highest level among the projections), whereas IHSGI shows relatively flat consumption in the industrial sector. EVA also differs from IHSGI in its projection for the electric power sector, which shows most growth occurring after 2025, whereas the IHSGI projection shows most of the growth in electric power sector natural gas use occurring before 2025. Like EVA and the AEO2014 Reference case, ICF projects most growth in electric power sector natural gas consumption occurring after 2025. ICF projects 54% growth in power sector natural gas use, to 14.3 Tcf in 2035, which is less than projected by IHSGI and EVA but significantly more than in the AEO2014 Reference case. The AEO2014 projection for natural gas consumption in the electric power sector is lower than the others, but its projection for industrial sector natural gas consumption in 2035 is exceeded only by EVA and ExxonMobil.

ExxonMobil projects electric power sector natural gas consumption growth of 62% to 15.0 Tcf in 2035. Like EVA and ICF, ExxonMobil shows most of the growth occurring after 2025. ExxonMobil also projects strong growth for natural gas consumption in the industrial sector, to 9.0 Tcf in 2035. Although the BP projection shows lower production growth than AEO2014 through 2035, it shows higher growth in domestic natural gas consumption, presumably as a result of lower net exports. Only INFORUM projects lower consumption growth than the AEO2014 Reference case through 2035. In the INFORUM projection, delivered (excluding lease, plant, and pipeline fuel) U.S. natural gas consumption totals 25.2 Tcf in 2035—less than the 2012 total.

Prices

Only four of the outlooks included in Table CP5 provide projections for Henry Hub natural gas spot prices. Prices from IHSGI are significantly lower than those in the AEO2014 Reference case, EVA, and ICF projections, particularly in the later years. IHSGI projects a Henry Hub price of $4.42 in 2035, in 2012 dollars/million Btu (MMBtu). All the other projections are well over $6/ MMBtu, even though the IHSGI production level is one of the highest. Through 2025, the AEO2014 Reference case has the second lowest projected Henry Hub prices after IHSGI; however, it has the highest projected 2035 spot price, at $6.92/MMBtu in real 2012 dollars, followed by EVA and ICF, at $6.46 and $6.89/MMBtu, respectively.

In the AEO2014 Reference case, commercial, residential, electric power, and industrial natural gas prices all rise from 2012 to 2035 by between $3.93 and $4.24/thousand cubic feet (Mcf) in real 2012 dollars. IHSGI is the only other outlook that projects natural gas prices by sector, and like the IHSGI Henry Hub price projection, they are far lower than those in the AEO2014 Reference case. IHSGI projects price increases from 2012 to 2035 ranging from $1.19/Mcf in the residential sector to $2.84/Mcf in the industrial sector, with the commercial and electric power sectors increasing by $1.50 and $1.61/Mcf, respectively.

Table CP5. Comparisons of natural gas projections, 2025, 2035, and 2040
(trillion cubic feet, except where noted)
      Other projections
Projection 2012 AEO2014
Reference
IHSGI EVA ICF BPa ExxonMobil INFORUM
          2025      
Dry gas productionb 24.06 31.86 34.26 33.14 33.15 31.96 -- 26.20
Net imports 1.51 -3.41 -1.81 -2.34 -3.02 --  --  -- 
Pipeline 1.37 -0.84 -- 0.64 -0.80 -- -- --
LNG 0.15 -2.57 -- -2.99 -2.22 -- -- --
Consumption 25.64 28.35 32.52 32.15 29.64 28.28 29.30c 24.84c
Residential 4.17 4.40 4.60 5.09 5.04 -- 8.00d 4.71
Commercial 2.90 3.22 3.24 3.55 3.11 -- -- 3.38
Industriale 7.14 8.41 7.96 9.56 7.96 -- 9.00 7.82
Electricity generatorsf 9.25 9.49 13.28 10.61 10.90 -- 12.00 8.92
Othersg 2.18 2.84 3.45 3.35 2.64 -- 0.30 --
Henry Hub spot market price (2012 dollars per million Btu) 2.75 5.23 3.92 5.69 5.44h -- -- --
End-use prices (2012 dollars per thousand cubic feet)
Residential 10.69 12.75 11.37 -- -- -- -- --
Commercial 8.29 10.51 9.26 -- -- -- -- --
Industriali 3.85 6.46 6.18 -- -- -- -- --
Electricity generation 3.51 5.88 4.60 -- -- -- -- --
          2035      
Dry gas productionb 24.06 36.09 38.07 38.32 37.45 35.14 -- 27.72
Net imports 1.51 -5.53 -1.33 -1.04 -3.66 --  --  -- 
Pipeline 1.37 -2.16 -- 2.15 -1.47 -- -- --
LNG 0.15 -3.37 -- -3.19 -2.19 -- -- --
Consumption 25.64 30.44 36.66 39.13 33.39 31.13 31.70c 25.19c
Residential 4.17 4.23 4.56 5.07 5.00 -- 7.00d 4.53
Commercial 2.90 3.40 3.33 3.62 2.93 -- -- 3.51
Industriale 7.14 8.59 7.55 10.56 8.19 -- 9.00 7.80
Electricity generatorsf 9.25 10.67 16.17 15.76 14.28 -- 15.00 9.36
Othersg 2.18 3.54 5.06 4.14 3.00 -- 0.70 --
Henry Hub spot market price (2012 dollars per million Btu) 2.75 6.92 4.42 6.46 6.89h  -- -- --
End-use prices (2012 dollars per thousand cubic feet)
Residential 10.69 14.93 11.88 -- -- -- -- --
Commercial 8.29 12.22 9.79 -- -- -- -- --
Industriali 3.85 7.93 6.69 -- -- -- -- --
Electricity generation 3.51 7.45 5.13 -- -- -- -- --
          2040      
Dry gas productionb 24.06 37.54 40.80 -- -- -- -- 31.58
Net imports 1.51 -5.80 -0.90 -1.13 --  --  --  -- 
Pipeline 1.37 -2.43 -- 2.06 -- -- -- --
LNG 0.15 -3.37 -- -3.19 -- -- -- --
Consumption 25.64 31.63 39.83 40.99 --  --  31.00c 24.86c
Residential 4.17 4.12 4.56 5.06 -- -- 7.00d 4.43
Commercial 2.90 3.57 3.38 3.63 -- -- -- 3.58
Industriale 7.14 8.68 7.39 11.09 -- -- 8.00 7.84
Electricity generatorsf 9.25 11.23 18.43 16.90 -- -- 15.00 9.01
Othersg 2.18 4.03 6.07 4.30 -- -- 1.00 --
Henry Hub spot market price (2012 dollars per million Btu) 2.75 7.65 4.54 -- -- -- -- --
End-use prices (2012 dollars per thousand cubic feet)
Residential 10.69 16.33 12.00 -- -- -- -- --
Commercial 8.29 13.37 9.91 -- -- -- -- --
Industriali 3.85 8.78 6.81 -- -- -- -- --
Electricity generation 3.51 8.34 5.26 -- -- -- -- --
-- = not reported.
aProjections for total consumption and production are for all of North America. Consumption by type provided only on a worldwide level. The conversion factor used is 1 million metric tons of oil equivalent = 39.2 billion cubic feet of natural gas.
bDoes not include supplemental fuels.
cDoes not include lease, plant, and pipeline fuel.
dNatural gas consumed in the residential and commercial sectors.
eIncludes consumption for industrial CHP plants and a small number of industrial electricity-only plants, and natural gas-to-liquids heat/power and production; excludes consumption by nonutility generators.
f Includes consumption of energy by electricity-only and CHP plants whose primary business is to sell electricity, or electricity and heat, to the public. Includes electric utilities, small power producers, and exempt wholesale generators.
gIncludes lease, plant, and pipeline fuel and fuel consumed in natural gas vehicles.
hConverted to 2012 dollars using EIA's GDP deflator.
iThe IHSGI 2012 industrial natural gas price is $4.84 per million Btu.
Sources: Comparisons of natural gas projections, 2025, 2035, and 2040: AEO2014 (Reference case): AEO2014 National Energy Modeling System, run REF2014.D102413A. IHSGI: IHS Global Insight, 30-year U.S. Economic Forecast (Lexington, MA, October 2013), http://www.ihs.com/products/global-insight/index.aspx (subscription site). EVA: Energy Ventures Analysis, Inc., e-mail from Anthony Petruzzo, January 17, 2014. ICF: ICF International Integrated Energy Outlook Q1 2014, ICF Integrated Planning Model (IPM) and Gas Market Model (GMM) (Fairfax, VA, 1st Quarter 2014. BP: BP, p.l.c., e-mail from Mark J. Finley, January 17, 2014. ExxonMobil: ExxonMobil 2014 The Outlook for Energy: A View to 2040 (Irving, TX, 2013), http://www.exxonmobil.com/Corporate/ energy_outlook.aspx. INFORUM: INFORUM AEO2012 Reference Case, Lift (Long-term Interindustry Forecasting Tool) Model (College Park, MD, January 2014), http://inforumweb.umd.edu/services/models/lift.html.

CP6. Petroleum and other liquid fuels

In the AEO2014 Reference case, the North Sea Brent crude oil spot price (in 2012 dollars) declines from about $112/barrel in 2012 to $109/barrel in 2025 before rising to $130/barrel in 2035 and $141/barrel in 2040 (Table CP6). North Sea Brent crude oil spot prices increase steadily in the INFORUM projection, rising from $124/barrel in 2025 to $154/barrel in 2035. In the AEO2014 Reference case, the U.S. imported refiner acquisition cost (IRAC) for crude oil (in 2012 dollars) declines to about $100/barrel in 2025, then increases to $120/barrel in 2035 and $131/barrel in 2040. IRAC prices in the IEA projection are higher, ranging from $112/barrel in 2025 to $140/barrel in 2035. BP, EVA, ExxonMobil, and IHSGI did not report projections of North Sea Brent or IRAC crude oil prices.

In the AEO2014 Reference Case, domestic crude oil production increases from about 6.5 million barrels/day (MMbbl/d) in 2012 to a peak of 9.6 MMbbl/d in 2019 before falling to 9.0 MMbbl/d in 2025, about 7.9 MMbbl/d in 2035, and 7.5 MMbbl/d in 2040. Overall, the production level in 2035 is more than 21% higher than in 2012. The INFORUM projection shows a considerable increase in production, to 8.8 MMbbl/d in 2035. The EVA projection shows an even steeper increase, with crude oil production reaching 11.8 MMbbl/d in 2025 before falling slightly to 11.5 MMbbl/d in 2035. Both the IHSGI and ExxonMobil projections are considerably below the AEO2014 Reference case, with domestic crude oil production in 2035 at 7.2 MMbbl/d and 4.6 MMbbl/d, respectively.

With rapid growth in U.S. crude oil production, net imports fall in the AEO2014 Reference case and in the other projections. In the AEO2014 Reference case, total net imports of crude oil and products fall from 7.5 MMbbl/d in 2012 to a low of 5.0 MMbbl/d in 2025 before increasing to 5.9 MMbbl/d in 2040. In the IHSGI projection, total net imports are slightly higher in 2025 at 6.0 MMbbl/d and rise slightly to 6.2 MMbbl/d in 2040 as a result of growing net exports of products. The BP projection shows total net imports falling to 3.7 MMbbl/d in 2025, whereas the INFORUM projection shows total net imports increasing from 6.9 MMbbl/d in 2025 to 7.0 MMbbl/d in 2035.

Biofuel production increases to about 1.0 MMbbl/d in 2025 and then remains at roughly that level through 2040 in the AEO2014 Reference case. In the BP projection, biofuel production, on an energy-equivalent basis, increases to 1.1 MMbbl/d in 2025. The IHSGI projection is slightly higher, at 1.2 MMbbl/d in 2025. BP does not show biofuel production in 2035. IHSGI shows biofuel production falling slightly to 1.1 MMbbl/d in 2035 and remaining near that level in 2040. Biofuels production is not explicitly included in the projections by EVA, INFORUM, IEA, and ExxonMobil.

Prices for diesel fuel increase through 2040 in the AEO2014 projection, while gasoline prices are lower in both 2025 and 2035 compared to 2012. INFORUM projects increases in both gasoline and diesel prices through 2035, with the gasoline price nearly equaling the diesel price in 2035. IHSGI projects falling gasoline and diesel fuel prices, with gasoline prices nearly $0.70/gallon lower and diesel fuel prices more than $1.16/gallon lower in 2040 than projected in the AEO2014 Reference case. The BP, EVA, IEA, and ExxonMobil projections do not include delivered fuel prices.

Table CP6. Comparisons of petroleum and other liquids projections, 2025, 2035, and 2040
(million barrels per day, except where noted)
Projection 2012 AEO2014
Reference
BPa,b EVA INFORUMc IEAb ExxonMobilc IHSGI
          2025      
U.S. refiner imported acquisition cost of crude oil (2012 dollars per barrel) 101.10 100.01 -- -- 112.14 -- -- --
Brent spot price (2012 dollars per barrel) 111.65 108.99 -- -- 123.86 127.00 -- --
U.S. WTI crude oil price (2012 dollars per barrel) 94.12 106.99 -- -- -- -- -- 94.35
Domestic production 8.89 11.88 12.57 15.30 -- -- -- 11.12
Crude oil 6.49 9.00 -- 11.79 8.28 -- 4.60 7.54
Alaska 0.53 0.33 -- 0.34 -- -- -- --
Natural gas liquids 2.40 2.87 -- 3.51 -- -- -- 3.58
Total net imports 7.52 5.05 3.74 -- 6.95 -- -- 5.99
Crude oil 8.43 6.05 -- -- 6.92 -- -- 7.77
Products -0.92 -1.01 -- -- 0.03 -- -- -1.78
Petroleum and other liquids consumption 18.49 19.27 17.69 -- 18.64 -- 19.04 19.82
Net petroleum import share of liquids supplied (percent) 40 26 21 -- -- -- -- 30
Biofuel production 0.91 0.97 1.14 -- -- -- -- 1.16
Transportation product prices (2012 dollars per gallon)
Gasoline 3.69 3.29 -- -- 4.04 -- -- 3.27
Diesel 3.95 3.98 -- -- 4.30 -- -- 3.60
          2035      
U.S. refiner imported acquisition cost of crude oil (2012 dollars per barrel) 101.10 119.80 -- -- 139.67 -- -- --
Brent spot price (2012 dollars per barrel) 111.65 129.77 -- -- 154.26 145.00 -- --
U.S. WTI crude oil price (2012 dollars per barrel) 94.12 127.77 -- -- -- -- -- 95.66
Domestic production 8.89 10.92 11.99 15.24 -- -- -- 10.84
Crude oil 6.49 7.87 -- 11.46 8.76 -- 4.60 7.16
Alaska 0.53 0.38 -- 0.00 -- -- -- --
Natural gas liquids 2.40 3.05 -- 3.78 -- -- -- 3.68
Total net imports 7.52 5.54 -- -- 7.00 -- -- 6.13
Crude oil 8.43 7.15 -- -- 7.26 -- -- 7.39
Products -0.92 -1.61 -- -- -0.26 -- -- -1.26
Petroleum and other liquids consumption 18.49 18.76 -- -- 18.06 16.33 18.53 19.55
Net petroleum import share of liquids supplied (percent) 40 30 -- -- -- -- -- 31
Biofuel production 0.91 0.97 -- -- -- -- -- 1.09
Transportation product prices (2012 dollars per gallon)
Gasoline 3.69 3.65 -- -- 4.70 -- -- 3.22
Diesel 3.95 4.47 -- -- 4.77 -- -- 3.59
          2040      
U.S. refiner imported acquisition cost of crude oil (2012 dollars per barrel) 101.10 130.80 -- -- 154.97 -- -- --
Brent spot price (2012 dollars per barrel) 111.65 141.46 -- -- 171.16 -- -- --
U.S. WTI crude oil price (2012 dollars per barrel) 94.12 139.46 -- -- -- -- -- 95.63
Domestic production 8.89 10.46 -- -- -- -- -- 10.88
Crude oil 6.49 7.48 -- -- 10.35 -- 4.30 7.16
Alaska 0.53 0.26 -- -- -- -- -- --
Natural gas liquids 2.40 2.98 -- -- -- -- -- 3.72
Total net imports 7.52 5.93 -- -- 6.80 -- -- 6.16
Crude oil 8.43 7.74 -- -- 7.47 -- -- 7.02
Products -0.92 -1.82 -- -- -0.66 -- -- -0.86
Petroleum and other liquids consumption 18.49 18.73 -- -- 18.16 -- 17.96 19.56
Net petroleum import share of liquids supplied (percent) 40 32 -- -- -- -- -- 32
Biofuel production 0.91 0.97 -- -- -- -- -- 1.05
Transportation product prices (2012 dollars per gallon)
Gasoline 3.69 3.90 -- -- 5.14 -- -- 3.20
Diesel 3.95 4.73 -- -- 5.08 -- -- 3.57
-- = not reported.
aBP production data converted from million tonnes of oil equivalent at 8.067817 bbl/MTOE.
bBP and IEA demand data converted from million tonnes of oil equivalent at 8.162674 bbl/MTOE.
cINFORUM and ExxonMobil liquids demand data converted from quadrillion Btu to barrels at 187.84572 million barrels per quadrillion Btu.
Sources: Comparisons of petroleum and other liquids projections, 2025, 2035, and 2040: AEO2014 (Reference case): AEO2014 National Energy Modeling System, run REF2014.D102413A. BP: BP, p.l.c., e-mail from Mark J. Finley, January 17, 2014. EVA: Energy Ventures Analysis, Inc., e-mail from Anthony Petruzzo, January 17, 2014. INFORUM: INFORUM AEO2012 Reference Case, Lift (Longterm Interindustry Forecasting Tool) Model (College Park, MD, January 2014), http://inforumweb.umd.edu/services/models/lift. html. IEA (Current Policies Scenario): International Energy Agency, World Energy Outlook 2013 (Paris, France, November 2013), http://www.iea.org/Textbase/nppdf/stud/13/weo2013.pdf. ExxonMobil: ExxonMobil 2014 The Outlook for Energy: A View to 2040 (Irving, TX, 2013), http://www.exxonmobil.com/Corporate/energy_outlook.aspx. IHSGI: IHS Global Insight, 30-year U.S. Economic Forecast (Lexington, MA, October 2013), http://www.ihs.com/products/global-insight/index.aspx (subscription site).

CP7. Coal

The AEO2014 Reference case generally projects the highest levels of total coal production, consumption, exports, and prices in comparison with the coal outlooks available from EVA, ICF, IHSGI, and BP (Table CP7). One key exception is INFORUM, whose projections of coal production, consumption, and exports are consistently higher than the AEO2014 projections. The IEA's World Energy Outlook 2013 Current Policies case projections for coal consumption also are slightly higher than the AEO2014 projections, but only one year of the projection, 2035, is available for comparison.

The detailed assumptions that underlie the various projections are not generally available to EIA, although there are some important known differences that contribute to the range of outlooks. For example, the AEO2014 Reference case assumes current laws and regulations, whereas other projections reflect alternative policy outcomes affecting the coal sector, particularly with respect to the price of carbon emissions. Although not shown in Table CP7, ExxonMobil projects a larger decline in U.S. coal consumption than any other group. The ExxonMobil outlook, which features a fee on CO2 emissions that rises to $80/metric ton (2013 dollars) in 2040, shows U.S. coal consumption declining from 17 quadrillion Btu in 2012 to 6 quadrillion Btu in 2040, an amount that is approximately 70% below the AEO2014 Reference case outlook for 2040 [1]. IHSGI, which has the second-lowest projection for coal consumption, assumes a CO2 cap-and-trade program for the electricity sector that begins in 2021 and features a CO2 allowance price that increases to $20/metric ton (2012 dollars) in 2040 [2]. EVA and ICF include a carbon pollution standard for new plants. ICF also includes a carbon cap-and-trade program beginning in 2023. EVA, ICF, and IHSGI assume the implementation of new regulations for cooling water intake and coal combustion residuals. Because those policies are not current law, the AEO2014 Reference case excludes them, which contributes to the lower coal consumption projections in many of the other outlooks relative to AEO2014. Variation among the assumptions about growth in energy demand and other fuel prices, particularly for natural gas, also contribute to the differences.

Although the AEO2014 Reference case projection for total coal consumption is somewhat lower than the INFORUM and IEA projections, the other outlooks offer more pessimistic projections. IHSGI is the most pessimistic, with coal consumption 30% and 44% lower in 2035 and 2040, respectively, than in the AEO2014 Reference case. Lower natural gas prices (37% lower in 2040 than in the AEO2014 Reference case) and a CO2 allowance price assumption for the power sector are key reasons for lower coal consumption in the IHSGI projection. In the EVA outlook, coal consumption in 2035 is only 2% less than in the AEO2014 Reference case; in the ICF outlook it is 14% lower. From 2035 to 2040, the differences between the EVA and ICF projections and the AEO2014 Reference case widen: in the EVA outlook, coal consumption in 2040 is 16% below the AEO2014 Reference case projection, and in the ICF outlook it is 21% lower than in the AEO2014 Reference case. The BP outlook for total coal consumption is 9% lower than the AEO2014 Reference case in 2025 and 19% lower in 2035, whereas the INFORUM outlook is 25% (247 million tons) higher in 2035 and 32% (315 million tons) higher in 2040 than projected in the AEO2014 Reference case.

The electricity sector is the predominant consumer of coal and the primary source of differences among the projections, due to differing assumptions about regulations and the economics of coal versus other fuels over time. Because the power sector accounts for more than 90% of total U.S. coal consumption, the variations in the projections for electricity sector coal consumption across the different groups primarily mirror those for total coal consumption. In 2025, the projected levels of electricity sector coal consumption for the three groups that supplied projections for all three comparison years (EVA, ICF, and IHSGI) range from 16% less to 2% more than in AEO2014. The range widens to between 30% below and 0% difference in 2035 and 44% below to 16% below in 2040, with IHGSI representing the lower end of the range and EVA the upper end. Electricity sector coal use in the EVA projection aligns most closely with the AEO2014 projection, although the two diverge after 2035, with EVA projecting a decline in coal use for electricity generation during this period and EIA projecting a stable outlook. IEA's projection for power sector coal consumption is available only for 2035 and is 7% higher than the AEO2014 Reference case. BP's projections are available only for 2025 and 2035; the 2035 projection is 17% lower than the AEO2014 Reference case projection. INFORUM, which has the highest projections for total coal consumption, did not supply projections for electricity sector coal use.

Projections of coal-fired generating capacity in Table CP4 underlie the projections for electricity sector coal consumption. For the most part, coal-fired generating capacity in the AEO2014, EVA, ICF, and IHSGI projections align with their respective levels of projected electricity sector coal consumption. The AEO2014 Reference case shows the highest level of coal-fired generating capacity in 2040 and IHSGI the lowest. In the AEO2014 Reference case, coal-fired generating capacity in the electric power sector declines from 307 GW in 2012 to 258 GW in 2040. ICF, EVA, and IHSGI project 243 GW, 202 GW, and 176 GW of coal-fired generating capacity, respectively, in 2040. In the AEO2014 Reference case, the 48-GW decline in coal-fired generating capacity from 2012 to 2040 is the net result of 51 GW of cumulative retirements and 3 GW of additions. IHSGI projects 146 GW of cumulative coal-fired generating capacity retirements from 2012 to 2040 and 10 GW of coal-fired capacity additions.

In all the projections, coal consumption in the end-use sectors is low in comparison with the electric power sector; however, there are some significant differences. The largest variations occur in the projections for the other industrial/buildings sector, where the AEO2014 projection is generally higher than the projections from the other groups, with the exception of INFORUM. While the AEO2014 Reference case shows a relatively flat outlook for coal consumption in the other industrial/buildings sector after rebounding from a low of 45 million tons in 2012, the other projections generally show significant declines from 2012 to 2025, with steady consumption levels thereafter. In 2040, the projections for coal consumption in the other industrial/buildings sector provided by EVA, ICF, and IHSGI range from a low of 7 million tons (ICF) to a high of 33 million tons (EVA), and all are considerably lower than the AEO2014 projection of 52 million tons.

The projections for coal consumption at coke plants are similar to AEO2014, which shows a slight decline in coking coal consumption, from 21 million tons in 2012 to 18 million tons in 2040. The largest deviation from AEO2014 is in the ICF projection, which shows coal consumption at coke plants declining to 10 million tons in 2040. INFORUM, which provided projections only for total end-use sector coal consumption, shows slightly higher levels of coal use in these sectors than AEO2014 for all comparison years. ICF is the only group projecting any production of coal-based synthetic liquids, with coal consumption at coal-to-liquids plants increasing to 6 million tons in 2025 and 14 million tons in 2040.

For coal production, differences in the projections are primarily the result of differences in the outlooks for coal consumption and net exports (which basically equal total coal production when added together) [3]. Because the AEO2014 projections for net coal exports are generally similar to those from other groups, the percent differences in the projected levels of coal production between the AEO2014 Reference case and those from other groups generally align with the percent differences in the projections for coal consumption. The most substantial deviation is in the ICF outlook for 2040, where the ICF projection for coal production is 12% less than the AEO2014 Reference case, and the outlook for coal consumption is 21% less. ICF's projection for coal production in 2040 is supported by a relatively strong outlook for net coal exports at 205 million tons, which is 28% higher than in AEO2014.

Coal production by region is available in the AEO2014, EVA, and ICF projections. For the most part, the EVA and ICF projections of regional coal production are less than in AEO2014. This is consistent with the generally lower projections for total coal production in the EVA and ICF outlooks. Although the shares of coal production by region remain relatively constant in AEO2014, with coal production east of the Mississippi River accounting for between 40% and 42% of total coal production in all years, the EVA projection shows the region's share of total U.S. coal production fall from 42% in 2012 to 35% in 2040, and ICF projects an increase to 49% in 2040.

In the AEO2014 Reference case, exports increase gradually from 126 million tons in 2012 to 160 million tons in 2035 and remain flat through 2040, maintaining 12% to 14% shares of total U.S. coal production over time. The EVA projection shows exports growing modestly, to 135 million tons in 2025, then remaining flat through 2040 and maintaining a share of total U.S. production similar to that in the AEO2014 projection. Exports in the IHSGI outlook are similar to those in the AEO2014 Reference case, but the share of total U.S. production in 2040 is much higher, at 22%, because of a projected significant reduction in total U.S. production. After a modest decrease from 2012 to 2025, the ICF projection shows exports recover more than in the other projections—to 206 million tons, or 21% of total U.S. coal production. Exports in the INFORUM outlook are similar to those in the ICF projection for 2040, although they represent only 13% of their stronger expected total U.S. coal production.

In the AEO2014, ICF, and IHSGI projections, coal imports decline from 8 million tons in 2012 to 2 million tons or less in 2025 and remain at that level through 2040. INFORUM projects an initial decline in coal imports, to 4 million tons in 2025, followed by an increase to 34 million tons in 2040. EVA, IEA, and BP did not provide projections for coal imports.

Only AEO2014, ICF, and INFORUM provide projections of minemouth coal prices. All three show prices increasing from 2025 through 2040. The AEO2014 Reference case projects the highest mine prices in every comparison year, with the average price rising from about $40/ton in 2012 to $59/ton in 2040. The ICF outlook has the lowest projections, with prices declining initially to about $32/ton in 2025 and increasing thereafter to $37/ton in 2040. In the INFORUM projection, average minemouth coal prices increase to $52/ton in 2040.

Projections for the average delivered price of coal to the electricity sector are available only from AEO2014, ICF, and IHSGI. Similarly to the projections for minemouth coal prices, AEO2014 projects the highest delivered coal prices in every comparison year. In the AEO2014 Reference case, the delivered price of coal to the power sector increases from about $46/ton in 2012 to $61/ton in 2040. By comparison, the ICF price projections are the lowest in each year, with a 2040 projection of $44/ton, or 27% less than in the AEO2014 Reference case. In the IHSGI projection, the delivered price of coal to the power sector increases to $52/ton in 2040, or 15% below the AEO2014 Reference case projection.

Table CP7. Comparisons of coal projections, 2025, 2035, and 2040 (million short tons, except where noted)
    AEO2014 Reference case   Other projections
    (million short tons) (quadrillion Btu)   EVAa ICFb IHSGIc INFORUM   IEAd BPd
Projection 2012 (million short tons) (quadrillion Btu)
            2025          
Production 1,016 1,114 22.36   1,111 1,005 970 1,253   --  18.9
East of the Mississippi 423 446 --    435 377 --  --    --  -- 
West of the Mississippi 593 668 --    676 628 --  --    --  -- 
Consumption
Electric power 825 919 17.41   937 867 771 --    --  16.4
Coke plants 21 22 0.58   21 12 19 --    --  -- 
Coal-to-liquids --  --  --    --  6 --  --    --  -- 
Other industrial/buildings 45 51 1.63e   36 8 38 1.69e   --  -- 
Total consumption (quadrillion Btu) 17.34 -- 19.03   --   16.41 --   -- 17.3
Total consumption (million short tons) 891 993 --   994 893 828 1,117f   -- --
Net coal exports 118 135 3.27   --  110 142 136   --  1.6g
Exports 126 136 --   135 111 144 140   --  -- 
Imports 8 2 --   --  1 2 4   --  -- 
Minemouth price
2012 dollars per ton 39.94 49.67 --    --  31.94 --  44.93   --  -- 
2012 dollars per Btu 1.98 2.49 --    --  1.60 --  2.26   --  -- 
Average delivered price
to electricity generators
2012 dollars per ton 46.13 52.56 --    --  42.33 50.77 --    --  -- 
2012 dollars per Btu 2.39 2.77 --    --  2.17 2.59 --    --  -- 
            2035          
Production 1,016 1,126 22.68   1,084 1,004 837 1,386   -- 16.3
East of the Mississippi 423 471 --   414 427 -- --   -- --
West of the Mississippi 593 655 --   670 577 -- --   -- --
Consumption
Electric power 825 915 17.32   910 820 637 --   18.57 14.4
Coke plants 21 19 0.50   21 11 18 --   -- --
Coal-to-liquids -- -- --   -- 11 -- --   -- --
Other industrial/buildings 45 51 1.54e   34 7 33 1.61e   -- --
Total consumption (quadrillion Btu) 17.34 -- 18.82   --   13.56 --   20.87 15.2
Total consumption (million short tons) 891 985 --   965 849 688 1,232f   -- --
Net coal exports 118 158 3.76   -- 153 151 154   -- 1.1g
Exports 126 160 --   137 154 153 173   -- --
Imports 8 2 --   -- 1 2 20   -- --
Minemouth price
2012 dollars per ton 39.94 56.37 --   -- 33.55 -- 50.10   -- --
2012 dollars per Btu 1.98 2.82 --   -- 1.66 -- 2.52   -- --
Average delivered price
to electricity generators
2012 dollars per ton 46.13 57.76 --   -- 42.92 52.93 --   -- --
2012 dollars per Btu 2.39 3.05 --   -- 2.19 2.72 --   -- --
            2040          
Production 1,016 1,121 22.61   938 981 703 1,451   -- --
East of the Mississippi 423 475 --   331 481 -- --   -- --
West of the Mississippi 593 645 --   607 500 -- --   -- --
Consumption
Electric power 825 909 17.27   764 742 506 --   -- --
Coke plants 21 18 0.47   22 10 17 --   -- --
Coal-to-liquids --   --   -- 14 -- --   -- --
Other industrial/buildings 45 52 1.53e   33 7 30 1.66e   -- --
Total consumption (quadrillion Btu) 17.34 -- 18.75   -- -- 10.75 --   -- --
Total consumption (million short tons) 891 979 --   819 773 553 1,294f   -- --
Net coal exports (million short tons) 118 160 3.76   -- 205 154 157   -- --
Exports 126 161 --   137 206 156 191   -- --
Imports 8 1 --   -- 1 2 34   -- --
Minemouth price
2012 dollars per ton 39.94 59.16 --   -- 36.58 -- 52.20   -- --
2012 dollars per Btu 1.98 2.96 --   -- 1.76 -- 2.63   -- --
Average delivered price
to electricity generators
2012 dollars per ton 46.13 60.61 --   -- 43.96 51.76 --   -- --
2012 dollars per Btu 2.39 3.19 --   -- 2.22 2.71 --   -- --
-- = not reported or not applicable.
aRegulations known to be accounted for in the EVA projections include MATS, carbon pollution standard for new plants, regulations for coolingwater intake structures under Section 316(b) of the Clean Water Act, and regulations for coal combustion residuals under authority of the Resource Conservation and Recovery Act.
bRegulations known to be accounted for in the ICF projections include MATS for mercury (Hg), hydrochloric acid (HCl), and filterable particulate matter (fPM) requirements starting in 2016, Phase I and II for CAIR followed by a more stringent CAIR replacement in 2018 to address 2012 National Ambient Air Quality Standards (NAAQS) for PM2.5, carbon pollution standard for new plants, entrainments requirements for cooling water intake structures beginning in 2025, coal combustion residual requirements under subtitle D starting in 2018, and a federal carbon capand- trade program starting in 2023.
cThe IHSGI projections include a CO2 cap-and-trade program for the electricity sector that begins in 2021 and a CO2 allowance price that increases to $20 per metric ton (2012 dollars) in 2040.
dFor IEA and BP, data were converted to quadrillion Btu from million metric tons of oil equivalent using a conversion factor of 39.683 million Btu per metric ton of oil equivalent.
eReported in quadrillion Btu and represents coal consumed in both the other industrial/buildings sector and at coke plants. This was done to facilitate comparison between the AEO2014 and INFORUM projections, because INFORUM provided projections only for total end-use coal consumption.
fTotal coal consumption for the INFORUM projection equals (production - exports + imports).
gNet coal exports for the BP projection equals (production - consumption).
Sources: Comparisons of coal projections, 2025, 2035, and 2040: AEO2014 (Reference case): AEO2014 National Energy Modeling System, run REF2014.D102413A. EVA: Energy Ventures Analysis, Inc., e-mail from Anthony Petruzzo, January 17, 2014. ICF: ICF International Integrated Energy Outlook Q1 2014, ICF Integrated Planning Model (IPM) and Gas Market Model (GMM) (Fairfax, VA, 1st Quarter 2014. IHSGI: IHS Global Insight, 30-year U.S. Economic Forecast (Lexington, MA, October 2013), http:// www.ihs.com/products/global-insight/index.aspx (subscription site). INFORUM: INFORUM AEO2012 Reference Case, Lift (Longterm Interindustry Forecasting Tool) Model (College Park, MD, January 2014), http://inforumweb.umd.edu/services/models/lift.html. IEA (Current Policies Scenario): International Energy Agency, World Energy Outlook 2013 (Paris, France, November 2013), http://www.iea.org/Textbase/nppdf/stud/13/weo2013.pdf. BP: BP, p.l.c., e-mail from Mark J. Finley, January 17, 2014.

 

Endnotes

  1. ExxonMobil Corporation, "The Outlook for Energy: A View to 2040" (Irving, TX, 2013), http://cdn.exxonmobil.com/~/media/ Reports/Outlook%20For%20Energy/2014/2014-Outlook-for-Energy.pdf; and W. Colton, "The Outlook for Energy: A View to 2040" (Irving, TX, December 12, 2013), http://cdn.exxonmobil.com/~/media/Reports/Outlook%20For%20Energy/2014/ ExxonMobil_2014_Outlook-for-Energy_Rollout_Presentation.pdf.
  2. E-mail on February 10, 2014 from Margaret Rhodes of IHS Global Insight.
  3. For the AEO2014 Reference case, waste coal is counted as part of overall coal consumption but is not counted as part of coal production. Rather, waste coal is considered to be a separate source of coal supply. As a result, the AEO2014 Reference case projection of coal production in tons equals coal consumption plus net exports minus waste coal.