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Annual Energy Outlook 2011

Release Date: April 26, 2011   |  Next Early Release Date: January 23, 2012  |   Report Number: DOE/EIA-0383(2011)

Legislation and regulations

Introduction

The Annual Energy Outlook 2011 (AEO2011) Reference case generally assumes that current laws and regulations affecting the energy sector remain unchanged throughout the projection (including the implication that laws which include sunset dates do, in fact, become ineffective at the time of those sunset dates). Currently, there are many pieces of legislation and regulation that appear to have some probability of being enacted in the not-too-distant future, and some laws include sunset provisions that may be extended. However, it is difficult to discern the exact forms that the final provisions of pending legislation or regulations will take, and sunset provisions may or may not be extended. Even in situations where existing legislation contains provisions to allow revision of implementing regulations, those provisions may not be exercised consistently. In certain situations, however, where it is clear that a law or regulation will take effect shortly after the Annual Energy Outlook (AEO) modeling work is completed, it may be considered in the projection. Sensitivity cases that incorporate alternative assumptions about proposed policies or existing policies subject to periodic updates are also included among the many alternative cases completed as part of the AEO. The Federal and State laws and regulations included in AEO2011 are based on those in effect as of the end of January 2011. In addition, at the request of the Administration and Congress, the U.S. Energy Information Administration (EIA) has regularly examined the potential implications of proposed legislation in Service Reports. Those reports, and others that were completed before 2010, can be found on the EIA website at www.eia.gov/oiaf/service_rpts.htm.

Examples of recently enacted State and Federal legislation incorporated in AEO2011 include:

  • State provisions passed in 2010 in Connecticut [1], Maine [2], New Jersey [3], and New York [4] that reduced the maximum allowable sulfur content of heating oil sold, as well as some plans to include mandated percentages of biodiesel content.
  • Final regulations promulgated by the California Air Resources Board (CARB) in January 2010 to implement a Low Carbon Fuel Standard (LCFS) [5]. The LCFS program aims to reduce the carbon intensity of motor gasoline and diesel fuel sold in California by 10 percent over the years 2012 through 2020 by increasing the volumes of alternative low-carbon fuels being introduced into the marketplace.
  • The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, enacted in December 2010 [6]. This law includes an extension of the Volumetric Ethanol Excise Tax Credit at $0.45 per gallon through 2011, a retroactive extension of the $1.00 per gallon biodiesel excise tax credit through 2011, and an extension of the $0.54 per gallon tariff on imported ethanol through 2011.
  • Updates to State renewable portfolio standard (RPS) programs, representing laws and regulations of 30 States and the District of Columbia that require renewable electricity generation.

Examples of recent Federal and State regulations, as well as provisions considered in earlier AEOs that have been affected by subsequent court decisions, include the following:

  • Approval of a waiver allowing the use of motor gasoline blends containing up to 15 percent ethanol for vehicles of model year (MY) 2001 and newer by the U.S. Environmental Protection Agency (EPA) in January 2011 [7].
  • Issuance of new guidelines by the EPA in April 2010 regarding the compliance of surface coal mining operations in Appalachia with the provisions of the Clean Water Act, the National Environmental Policy Act, and the environmental justice Executive Order (E.O. 12898) [8]. The guidance explains the approach that the EPA will be following in permit reviews and instructs Regional offices to use clear, consistent, and science-based standards in reviewing the permits.

Detailed information on several Federal and State legislative and regulatory developments considered in AEO2011 is provided below.