‹ Analysis & Projections

Annual Energy Outlook 2011

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

U.S. Energy Demand

U.S. average energy use per person and per dollar of GDP declines through 2035

Growth in energy use is linked to population growth through increases in housing, commercial floorspace, transportation, and goods and services. These changes affect not only the level of energy use, but also the mix of fuels used. Energy consumption per capita declined from 337 million Btu in 2007 to 308 million Btu in 2009, the lowest level since 1967. In the AEO2011 Reference case, energy use per capita increases slightly through 2013, as the economy recovers from the 2008-2009 economic downturn. After 2013, energy use per capita declines by 0.3 percent per year on average, to 293 million Btu in 2035, as higher efficiency standards for vehicles and appliances take effect (Figure 55).

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Energy intensity (Btu of energy use per dollar of real GDP) falls as a result of structural changes and efficiency improvements. Since 1990, a growing share of U.S. output has come from less energy-intensive services. In 1990, 68 percent of the total value of output came from services, 8 percent from energy-intensive manufacturing industries, and the balance from non-energy-intensive manufacturing and the nonmanufacturing industries (e.g., agriculture, mining, and construction). In 2009, services accounted for 76 percent of total output and energy-intensive industries only 6 percent. Services continue to play a growing role in the AEO2011 Reference case, accounting for 79 percent of total output in 2035, with energy-intensive manufacturing accounting for less than 5 percent. In combination with improvements in energy efficiency in all sectors, the shift away from energy-intensive industries pushes overall energy intensity down by an average of 1.9 percent per year from 2009 to 2035.

Industrial and commercial sectors lead growth in primary energy use

Total primary energy consumption, including fuels used for electricity generation, grows by 0.7 percent per year from 2009 to 2035, to 114.2 quadrillion Btu in 2035 in the AEO2011 Reference case (Figure 56). The largest increase, 7.2 quadrillion Btu from 2009 to 2035, is in the industrial sector, which was the end-use sector most severely affected by the economic downturn in 2009. When 2008 is used as the base year, the total increase in industrial energy consumption is only about one-half the increase from 2009 to 2035, at 3.3 quadrillion Btu from 2008 to 2035. Factors contributing to the growth in industrial energy consumption include increased use of natural gas for combined heat and power (CHP) generation and increased production of biofuels to meet the renewable fuels standard (RFS) standard required by EISA2007.

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The second-largest increase in total primary energy consumption from 2009 to 2035 (5.8 quadrillion Btu) is in the commercial sector, which currently accounts for the smallest sectoral share of primary energy use. Even as standards for building shells and energy efficiency are being tightened in the commercial sector, the growth rate for commercial energy use, at 1.1 percent per year, is the fastest rate among the end-use sectors, propelled by 1.2-percent average annual projected growth in commercial floorspace.

Primary energy use in the transportation sector grows by 4.7 quadrillion Btu from 2009 to 2035. Light-duty vehicles (LDVs) have accounted for more than 16 percent of total U.S. energy consumption since 2002, and their share declines slightly to 15.5 percent in 2020 as fuel economy standards increase to meet the statutory requirements of EISA2007. Growth in energy consumption by LDVs averages 0.3 percent per year from 2009 to 2035.

Renewable sources lead rise in primary energy consumption

Consumption of all fuels increases in the AEO2011 Reference case, but the aggregate fossil fuel share of total energy use falls from 83 percent in 2009 to 78 percent in 2035 as renewable fuel use grows rapidly (Figure 57). The renewable share of total energy use increases from 8 percent in 2009 to 13 percent in 2035, in response to the Energy Independence and Security Act of 2007 (EISA2007) RFS, availability of Federal tax credits for renewable electricity generation and capacity early in the projection period, and State renewable portfolio standard (RPS) programs.

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Consumption of all liquid fuels increases by 0.5 percent per year from 2009 to 2035, with most of the increase accounted for by biofuels. The petroleum share of liquid fuel use declines as consumption of alternative fuels increases and petroleum use is roughly flat. Nearly all use of liquid biofuels occurs in the transportation sector. Biodiesel blended into diesel, motor fuel containing up to 85 percent ethanol (E85) fuel, and ethanol blended into motor gasoline account for 54 percent of the growth in liquids fuel consumption from 2009 to 2035.

Natural gas consumption grows by about 0.6 percent per year from 2009 to 2035, as the large amount of shale gas resources that can be produced at prices under $7 per thousand cubic feet keeps natural gas prices from 2009 through 2035 below the levels seen from 2005 to 2008.

Coal consumption increases by 0.8 percent per year in the Reference case from 2009 to 2035, or by 0.2 percent per year starting from the 2007 consumption level. Several coal-fired power plants currently under construction, with combined capacity totaling 11.5 gigawatts, come on line by 2012. Nuclear power capacity expands by 9.5 gigawatts, but the nuclear share of primary energy falls from 8.8 percent in 2009 to 8.0 percent in 2035.

Transportation uses lead growth in liquid fuels consumption

U.S. consumption of liquid fuels—including fuels from petroleum-based sources and, increasingly, those derived from non-petroleum primary fuels such as biomass and natural gas—totals 21.9 million barrels per day in 2035 in the AEO2011 Reference case, an increase of 2.9 million barrels per day over the 2009 total (Figure 93). In all sectors except transportation, where consumption grows by about 2.5 million barrels per day, liquid fuel consumption remains at about the same level from 2009 to 2035. The transportation sector accounts for 73 percent of total liquid fuels consumption in 2035, up slightly from 71 percent in 2009.

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Motor gasoline, ultra-low sulfur diesel, and jet fuel are the primary transportation fuels, supplemented by biofuels such as ethanol and biodiesel. The increase in demand for transportation fuels is met primarily by diesel and biofuels. Motor gasoline consumption increases by approximately 0.3 million barrels per day from 2009 to 2035 in the Reference case, while diesel fuel and E85 consumption increase by 1.3 and 0.8 million barrels per day, respectively, over the period.

Biodiesel and a number of next-generation biofuels account for about 0.6 million barrels per day of the increase in liquid fuels consumption for transportation in 2035. The growth in biofuel use is primarily a result of the RFS mandates in EISA2007, although there is moderate production of corn ethanol beyond that which qualifies for RFS credits. The growth in diesel fuel consumption results from both an expansion of light-duty diesel vehicle sales to meet more stringent CAFE standards and an increase in industrial output that leads to more fuel use by heavy trucks.