EIA issued its Annual Energy Outlook 2013 (AEO2013) Reference case, which highlights a growth in total U.S. energy production that exceeds growth in total U.S. energy consumption through 2040.
“EIA’s updated Reference case shows how evolving consumer preferences, improved technology, and economic changes are pushing the nation toward more domestic energy production, greater vehicle efficiency, greater use of clean energy, and reduced energy imports,” said EIA Administrator Adam Sieminski.
“This combination has markedly reduced projected energy-related carbon dioxide emissions,” said Mr. Sieminski.
AEO2013 offers a number of key findings, including:
Crude oil production, especially from tight oil plays, rises sharply over the next decade. Domestic oil production will rise to 7.5 million barrels per day (bpd) in 2019, up from less than 6 million bpd in 2011.
Motor gasoline consumption will be less than previously estimated. Compared with the last AEO, the AEO2013 shows lower gasoline use, reflecting the introduction of more stringent corporate average fuel economy (CAFE) standards. Growth in diesel fuel consumption will be moderated by the increased use of natural gas in heavy-duty vehicles.
The United States becomes a net exporter of natural gas earlier than estimated a year ago. Because quickly rising natural gas production outpaces domestic consumption, the United States will become a net exporter of liquefied natural gas (LNG) in 2016 and a net exporter of total natural gas (including via pipelines) in 2020.
Renewable fuel use grows at a much faster rate than fossil fuel use. The share of electricity generation from renewables grows to 16 percent in 2040 from 13 percent in 2011.
Net imports of energy decline. The decline reflects increased domestic production of both petroleum and natural gas, increased use of biofuels, and lower demand resulting from the adoption of new vehicle fuel efficiency standards and rising energy prices. The net import share of total U.S. energy consumption falls to 9 percent in 2040 from 19 percent in 2011.
The AEO2013 Reference case focuses on the drivers that shape U.S. energy markets under the assumption that current laws and regulations remain generally unchanged throughout the projection period. The complete AEO2013, to be released in early 2013, will include many alternative cases in recognition of the uncertainty inherent in making projections about energy markets, which in part arises from assumptions about policies and other market drivers such as trends in prices and economic growth.
- Key updates made for the AEO2013 Reference case include the following:
- Extension of the projection period through 2040, an additional 5 years beyond AEO2012.
- A revised outlook for industrial production to reflect the impacts of increased shale gas production and lower natural gas prices, which result in faster growth for industrial production and energy consumption. The industries affected include, in particular, bulk chemicals and primary metals.
- Adoption of final model year 2017 to 2025 greenhouse gas emissions and CAFE standards for light-duty vehicles (LDVs), which increases the projected combined fuel economy of new LDVs to 47.3 mpg in 2025.
- Updated modeling of LNG export potential.
- Updated power generation unit costs that capture recent cost declines for some renewable technologies, which tend to lead to greater use of renewable generation, particularly solar technologies.
- The Future Of US Energy In 4 Charts (businessinsider.com)
- EIA: Here’s What Oil Prices Will Do For The Next 30 Years (businessinsider.com)
- US Energy Mix to 2040 per EIA (simplerna.com)
The Obama administration is undermining domestic fossil-fuel production, say Republican Party officials.
They point to comments by EPA Regional Administrator Al Armendariz, who resigned Sunday as agency administrator for the south-central region, suggesting that the agency’s “general philosophy” is to “crucify” oil and gas companies as being symbolic of the administration’s attitude.
The Washington Free Beacon reported in a March 13, 2012 article that Obama Interior Department officials have intentionally “slow walked” drilling permits, reducing the number of annual permits by two-thirds from 157 before the 2010 drilling moratorium to 51 after. The GOP argues that small- to medium-sized businesses are the ones getting hurt, not “Big Oil” as Democrats like to argue.
As a result, half of all Gulf of Mexico businesses have laid-off workers and a further 39 percent have cut salaries and/or hours. A further 46 percent of affected businesses have moved their operations out of the gulf.
EPA regulations could result in a 11 percent drop in gas production and a 37 percent drop in domestic oil production.
The same attitude carries over to coal, where the Washington Post reported that looming EPA regulations would end the construction of conventional coal-fired power plants nationwide. Thirteen percent of all coal-fired power plants are likely going to shut down because of EPA regulations.
This has hit too close to home for a traditional Democratic constituency – coal miners.
By John Rossomando /// April 30, 2012
- Obama officials rip into GOP gasoline bills (mb50.wordpress.com)
- EPA Official: EPAs “philosophy” is to “crucify” and “make examples” of US energy producers (mb50.wordpress.com)
- EPA Official on How To Deal With Non-Compliant Companies: ‘Hit Them as Hard as You Can’ & ‘Make Examples Out of Them’ (nicedeb.wordpress.com)
- EPA Official Quits Over Remark (myfoxchicago.com)
- EPA Is Sorry for the Analogy But Not the Context of Crucifying the Oil & Gas Industries (independentsentinel.com)
The documents, due to be presented to the G20 finance ministers in November, also suggest that countries redirect “climate aid” money already pledged, towards the propping up ailing carbon markets.
The Mobilizing Climate Finance paper, seen in draft form by the Guardian, has been prepared at the request of the world’s leading economies. It is likely to provide a template for action in the UN climate talks that resume in Panama next week, in preparation for a major meeting of 194 countries in Durban in November.
According to the confidential paper, there is little likelihood that in the current economic climate, public money will be available for raising the $30bn rich countries have pledged for the 2010-2012 period, and the $100bn a year that must be found by 2020. Instead, says the paper, “the large financial flows required for climate stabilization and adaptation will, in the long run, be mainly private in composition”.
It says: “A starting point should be the removal of subsidies on fossil fuel use. New OECD estimates indicate that reported fossil fuel production and consumption supports in Annex II countries [24 OECD countries] amounted to about $40-$60bn per year in 2005-2010 … if reforms resulted in 20% of the current level of support being redirected to public climate finance, this could yield $10bn per year.
“Reform of fossil fuel subsidies in developed countries is a promising near-term option because of its potential to improve economic efficiency and raise revenue in addition to environmental benefits.”
New analysis, says the paper, suggests that half the $50bn-a-year fossil fuel subsidies go to the oil industry, and around a quarter to coal and natural gas. It says: “About two-thirds of total fossil fuel support in 2010 was estimated to be for consumer support, with a little over 20% being producer support.”
Developing countries are increasingly frustrated by the refusal of rich countries to meet their climate finance pledges. But they are unlikely to approve of the bank’s innovative proposal that some of the money pledged to them should be used to prop up struggling carbon markets.
The report proposes: “Governments could make innovative uses of climate finance to sustain momentum in the market while new initiatives are being developed. They could, for example, dedicate a fraction of their international climate finance pledges to procure carbon credits for testing and showcasing new approaches, such as country programme concepts, new methodologies, CDM reforms and new mechanisms.
“This would be a cost-efficient use of climate finance as it would target least cost-options and would be performance-based. It would also help build up a supply pipeline for a future scaled-up market, preventing future supply shortages and price pressures.”
It also appears to back a levy on aviation and maritime fuels. “Increasing from zero a tax on an activity that causes environmental damage is likely to be a more efficient way to raise revenue than would be increasing a tax that already causes significant distortion.”
“A globally implemented carbon charge of $25/tonne CO2 on fuel used could raise around $13bn from international aviation and around $26bn from international maritime transport in 2020, while reducing CO2 emissions from each industry by around 5 to 10%. Compensating developing countries for the economic harm they might suffer from such charges … seems unlikely to require more than 40% of global revenues. This would leave about $24bn or more for climate finance or other uses,” says the paper.
Last month, the UK shipping industry’s trade body roundly rejected calls to be brought into the EU’s carbon trading scheme, saying that any solution to reducing the industry’s emissions must be global.
- Paper on climate financing targets fuel subsidies (seattletimes.nwsource.com)
- India Said to Consider Doubling ONGC’s Fuel Subsidy Bill (businessweek.com)
- China, India, Brazil Doing More to Cut Carbon Emissions Cuts Than USA, Canada, Australia (stephenleahy.net)
- James Hansen On the Easter Bunny Myth of Renewables and His Plan for a Carbon Tax (bigthink.com)