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AEO2011 Early Release Overview

Release Date: December 16, 2011   |  Next Release Date: January 2012  |   Report Number: DOE/EIA-0383ER(2011)

Energy Consumption by Sector


The AEO2011 Reference case does not include the proposed fuel economy standards for heavy-duty vehicles provided in The Proposed Rule for Greenhouse Gas Emissions Standards and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles, published by the EPA and the National Highway Traffic Safety Administration (NHTSA) in November 2010, nor does it include increases in fuel economy standards for light-duty vehicles, as outlined in the September 2010 EPA/NHTSA Notice of Upcoming Joint Rulemaking to Establish 2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy (CAFE) Standards because the specifi cs of the new standards are not yet available.

Figure Data
AEO2011 assumes the adoption of CAFE standards for light-duty vehicles for model year 2011, as well as joint CAFE and greenhouse gas emissions standards set forth by the EPA and NHTSA for model years 2012 through 2016. The fuel economy standards are increased through model year 2020 to meet the statutory requirements of EISA2007. Beyond 2020, CAFE standards for both passenger cars and light-duty trucks are held constant. To attain the mandated fuel economy levels, the AEO2011 Reference case includes a rapid increase in sales of unconventional vehicle technologies,3 such as flex-fuel, hybrid electric, micro hybrid, plug-in, and diesel vehicles, as well as a lower ratio of light-duty truck sales to passenger car sales. Delivered energy consumption in the transportation sector grows from 27.2 quadrillion Btu in 2009 to 31.8 quadrillion Btu in 2035 in the AEO2011 Reference case (Figure 6), slightly lower than the 32.5 quadrillion Btu projected for 2035 in the AEO2010 Reference case.

Energy consumption for light-duty vehicles grows from 16.7 quadrillion Btu in 2009 to 18.4 quadrillion Btu in 2035 in the AEO2011, about the same as projected in the AEO2010 Reference case, as lower projections for vehicle-miles traveled are off set by relatively lower fuel economy improvements after CAFE standards applicable for model year 2020 are achieved.

Lower projected growth in light-duty vehicle travel demand (1.6 percent annually) is a result of the rate of economic recovery and prolonged high unemployment rates in the early part of the projection.

Energy demand for heavy trucks increases from 4.5 quadrillion Btu in 2009 to 6.7 quadrillion Btu in 2035, compared with 6.8 quadrillion Btu in the AEO2010 Reference case. Relatively lower projected industrial output leads to lower vehicle-miles traveled by freight trucks, more than off setting the relatively lower projected fuel economy of heavy vehicles.

Energy consumption for aircraft increases from 2.7 quadrillion Btu in 2009 to 3.1 quadrillion Btu in 2035 in the AEO2011 Reference case, lower than the 3.3 quadrillion Btu projected in the AEO2010 Reference case, due to relatively lower disposable personal income.


Approximately one-third of delivered energy consumption in the United States occurs in the industrial sector (21.8 quadrillion Btu in 2009), and consumption in the AEO2011 Reference case in 2035 is 2.2 quadrillion Btu higher than in the AEO2010 Reference case, with most of the increase accounted for by natural gas. The largest users of energy in the industrial sector are the bulk chemical, refining, paper, mining, and construction industries. Those five industries together account for more than 61 percent of total industrial delivered energy consumption. Although the largest current user of energy is the bulk chemicals industry, the refining industry, which includes energy use at petroleum, biofuel, and coal-to-liquids (CTL) facilities, becomes the largest energy-consuming industry starting in 2027 in the AEO2011 Reference case.

Collectively, the energy-intensive manufacturing industries—bulk chemicals, refi ning, paper products, iron and steel, aluminum, food, glass, and cement—produce about one-quarter of the total dollar value of industrial shipments while accounting for two-thirds of industrial delivered energy consumption. Although energy-intensive industries are expected to recover rapidly from the recent recession, long-term growth is slowed by increased competition from overseas manufacturers and a shift in U.S. manufacturing toward higher value consumer goods, which are less energy-intensive.

Total industrial shipments increase by 55 percent from 2009 to 2035 in the AEO2011 Reference case, while growth in the energy-intensive manufacturing industries, which drive total industrial energy consumption, is much slower (30 percent). As a result, industrial delivered energy consumption increases by only 19 percent. Most significant is the increase of nearly 79 percent in shipments from the iron and steel industry from 2009 to 2035, which requires a 15-percent increase in the industry's energy consumption. The steep increase in shipments and energy consumption in the iron and steel industry results from relatively low levels of shipments and energy consumption in 2009, during the economic downturn. Because this industry is an energy-intensive, trade-exposed industry, it is sensitive to market and price fluctuations and, therefore, returns quickly to pre-recession production levels.

The higher level of industrial natural gas consumption in the AEO2011 Reference case relative to AEO2010 is the result of a revised projection for industrial production, which includes a shift in the U.S. product slate, a more rapid economic recovery in the near term, lower natural gas prices, and faster growth in combined heat and power (CHP) production. In 2035, natural gas consumption for use in CHP is approximately 0.9 quadrillion Btu higher in the AEO2011 Reference case than was projected in AEO2010, while total natural gas use in the industrial sector in 2035 is just over 1.2 quadrillion Btu higher in AEO2011. The increase in natural gas use for CHP corresponds to faster growth of industrial production in small, non-energy-intensive industries (such as metal-based durable goods manufacturing), which are heavy users of CHP.

Energy consumption in the refi ning industry also drives growth in total industrial delivered energy consumption. In 2009, energy consumption for refi ning represents 16 percent of the industrial sector total, and it grows to 27 percent in 2035, very similar to the AEO2010 projection. Although total shipments from the refining industry are largely unchanged from those in the AEO2010 Reference case, the industry becomes slightly less energy-intensive as a result of the use of more natural gas liquids (NGL) for refinery inputs and less use of heavy inputs, such as unfinished oils.


Residential delivered energy consumption in the AEO2011 Reference case grows from 11.1 quadrillion Btu in 2009 to 11.7 quadrillion Btu in 2035, 0.4 quadrillion Btu less than in the AEO2010 Reference case.

The recent consensus agreement among efficiency advocates and manufacturers4 leads to lower projected energy use for residential refrigerators and freezers, clothes washers, clothes dryers, dishwashers, and room air conditioners.

The latest efficiency rulemaking for residential water heaters includes a provision for higher standards on electric and natural gas heaters above 55 gallons capacity. The new standard, combined with water consumption standards in the consensus agreement for dishwashers and clothes washers, reduces the need for residential water heating.

Limits on the availability of interconnection services for customers who have distributed generation and other market barriers leads to slow growth of distributed generation in the residential sector than would have otherwise occurred.

Residential solar photovoltaic and wind capacity is 10.5 gigawatts in 2035 in the AEO2011 Reference case, down from 11.2 gigawatts in the AEO2010 Reference case in 2035.


Despite efficiency gains, lower real electricity and natural gas prices lead to growth in commercial energy consumption in the AEO2011 Reference case similar to that in the AEO2010 Reference case. Delivered commercial energy consumption grows from 8.5 quadrillion Btu in 2009 to 11.0 quadrillion Btu in 2035, about the same as in the AEO2010 Reference case.

Growth in commercial electricity use averages 1.4 percent per year from 2009 to 2035. Equipment standards, more efficient computing equipment, and improved handling of the impact of building shell improvements help to offset increases in demand for electricity to power other electronic equipment and the impact of lower electricity prices relative to AEO2010.

Distributed generation and combined heat and power systems in the commercial sector generate 38 billion kilowatthours of electricity in 2035, 19 percent less than in the AEO2010 Reference case. Lower electricity prices and consideration of regional interconnection limits, however, slow the adoption of these technologies in the AEO2011 Reference case relative to the AEO2010 Reference case.



3 Vehicles that can use alternative fuels or employ electric motors and advanced electricity storage, advanced engine controls, or other new technologies.

4 Association of Home Appliance Manufacturers and the American Council for an Energy Effi cient Economy, "Agreement on Minimum Federal Efficiency Standards, Smart Appliances, Federal Incentives, and Related Matters for Specified Appliances" (July 30, 2010), at www.aham.org/ht/a/