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AEO2011 Early Release Overview

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

Executive Summary

Projections in the Annual Energy Outlook 2011 (AEO2011) Reference case focus on the factors that shape U.S. energy markets in the long term. Under the assumption that current laws and regulations will remain generally unchanged throughout the projections, the AEO2011 Reference case provides the basis for examination and discussion of energy market trends and the direction they may take in the future. It also serves as a starting point for analysis of potential changes in energy policies, rules, or regulations. Some of the highlights in the AEO2011 Reference case are summarized in this Executive Summary.

A higher updated estimate of domestic shale gas resources supports increased natural gas production at prices below those in last year's Outlook


Figure Data
The technically recoverable unproved shale gas resource is 827 trillion cubic feet (as of January 1, 2009) in the AEO2011 Reference case, 480 trillion cubic feet larger than in the Annual Energy Outlook 2010 (AEO2010) Reference case, refl ecting additional information that has become available with more drilling activity in new and existing shale plays. The larger resource leads to about double the shale gas production and over 20 percent higher total lower 48 natural gas production in 2035, with lower natural gas prices than was projected in the AEO2010 Reference case (Figure 1).

Imports meet a major but declining share of total U.S. energy demand

Projected demand for energy imports is moderated by increased use of domestically produced biofuels, demand reductions resulting from the adoption of new effi ciency standards, and rising energy prices. Rising fuel prices also spur domestic energy production across all fuels, which moderates growth in energy imports. The net import share of total U.S. energy consumption in 2035 is 18 percent, compared with 24 percent in 2009.

Non-hydro renewables and natural gas are the fastest growing fuels used to generate electricity, but coal remains the dominant fuel because of the large amount of existing capacity


Figure Data
Coal remains the dominant energy source for electricity generation (Figure 2) because of continued reliance on existing coal-fi red plants. The U.S. Energy Information Administration (EIA) is not projecting any new central station coal-fi red plants, however, beyond those already under construction or supported by clean coal incentives. The generation share from renewable resources increases from 11 percent in 2009 to 14 percent in 2035 in response to Federal tax credits in the near term and State requirements in the long term. Natural gas also plays a growing role due to lower natural gas prices and relatively low capital construction costs that make it more attractive than coal. The share of generation from natural gas increases from 23 percent in 2009 to 25 percent in 2035.

Industrial natural gas demand recovers, reversing recent trend

Industrial natural gas demand grows sharply in the near term, from 7.3 trillion cubic feet in 2009 to 9.4 trillion cubic feet in 2020. This growth reverses the recent downward trend, as a result of a strong recovery in near-term industrial production, growth in combined heat and power, and relatively low natural gas prices.

Assuming no changes in policy related to greenhouse gases, carbon dioxide emissions grow slowly, but do not again reach 2005 levels until 2027


Figure Data
After falling 3 percent in 2008 and nearly 7 percent in 2009, largely driven by the economic downturn, energy-related CO2 emissions do not return to 2005 levels (5,980 million metric tons) until 2027. Assuming no new policies reducing greenhouse gases, CO2 emissions then rise by an additional 5 percent from 2027 to 2035, reaching 6,315 million metric tons in 2035 (Figure 3).