Transcript Schaal - Projections for Energy Markets 2008

Projections for Energy Markets
2008-18 and Beyond
Rising Food and Energy Prices
October 2nd, 2008
Corvallis, Oregon
A. Michael Schaal
Director, Oil and Gas Division
Office of Integrated Analysis and Forecasting
Energy Information Administration
Outline
• EIA’s Annual Energy Outlook 2008 Reference Case
• Impacts of Revised CAFE and Renewable Fuel
Standard
• Alternative Scenarios For AEO 2008
Rising Food and Energy Prices
Energy use per capita and
per dollar of GDP
1.2
(index, 1970=1.0)
per capita
1.0
0.8
0.6
per dollar real GDP
0.4
0.2
History
0.0
1970
1980
1990
Rising Food and Energy Prices
Projection
2000
2010
2020
2030
U.S. Primary Energy Consumption by Fuel, 1960-2030
(quadrillion Btu)
120
History
Projections
Coal
100
80
Natural Gas
60
40
Liquid Fuels & Other Petroleum
20
Nuclear
Renewables
0
1960
1970
1980
Rising Food and Energy Prices
1990
2000
2010
2020
2030
U.S. Primary Energy Consumption by Fuel, 1960-2030
(quadrillion Btu)
quadrillion Btu
50
History
Projections
Liquid Fuels
40
Coal
30
Natural Gas
20
Renewables
10
Nuclear
0
1960
1970
1980
Rising Food and Energy Prices
1990
2000
2010
2020
2030
Natural Gas Consumption by End-Use Sector
trillion cubic feet
10
History
Projections
Industrial*
8
Electric Power
6
Residential
4
Commercial
2
Transportation**
0
1990
* Includes lease and plant fuel
** Includes pipeline fuel
2000
Rising Food and Energy Prices
2005
2010
2020
2030
U.S. Electricity Demand Growth Trends
12%
Annual
Growth
History
10%
8%
6%
1950s
9.0%
1960s
7.3%
1970s
4.2%
1980s
3.1%
1990s
2.4%
2000-2005
1.2%
2005-2030
1.1%
Projections
4%
2%
0%
1950
1960
1970
Rising Food and Energy Prices
1980
1990
2000 2005 2010
2020
2030
U.S. Electricity Consumption Growth by Sector
billion kilowatthours
History
2,000
Projections
Commercial
1,500
Residential
Industrial
1,000
500
0
1980
1990
Rising Food and Energy Prices
2000
2005
2010
2020
2030
Electricity Generation by Fuel Type
billion kilowatthours
3,000
History
Projections
Coal
2,000
Natural Gas
1,000
Nuclear
Renewables
Petroleum
0
1980
1990
Rising Food and Energy Prices
2000
2005
2010
2020
2030
AEO 2008 Outlook Affected By The Energy
Independence and Security Act of 2007
• Increased Corporate Average Fuel Economy (CAFE).
– Light Duty Vehicle fuel economy standard of 35 miles per gallon
by 2020.
• Increased and Diversified the Renewable Fuels
Standard (RFS)
• Other End-Use Efficiency Standards.
Rising Food and Energy Prices
New Light-Duty Vehicle Fuel Efficiency
(miles per gallon)
40
30
20
10
0
1978 1983 1988 1993 1998 2003 2008 2013 2018 2023 2028
Rising Food and Energy Prices
AEO2008
AEO2007
The Transportation Sector Dominates
Liquid Fuels Consumption.
million barrels per day
18
History
Projections
15
Transportation
12
9
6
Industrial
3
Residential and Commercial
Electric Power
0
1970
1980
1990
Rising Food and Energy Prices
2000
2010
2020
2030
U.S. Sales of Unconventional Light-Duty Vehicles,
2015 and 2030 (thousand vehicles sold)
3,500
Hybrids
Flex Fuel
3,000
2,500
Turbo Direct Injection Diesel
Gaseous
Electric
Fuel Cell
2,000
1,500
1,000
500
0
2015
Rising Food and Energy Prices
2030
Motor Fuels Demand
(million barrels per day)
12
10
8
6
4
2
0
1995
2000
2005
2010
2015
Motor Gasoline*
* Motor Gasoline includes E85
Rising Food and Energy Prices
2020
Diesel
2025
2030
Bringing Liquid Fuels to Market
Bio-Refinery
Rising Food and Energy Prices
Tanker,
Barge or Rail
EISA 2007 Expands the Renewable Fuel
Standard (RFS) Mandate
(billion credits, ethanol equivalent gallons)
40
Total
30
Advanced Biofuels
20
10
20
06
20
08
20
10
20
12
20
14
20
16
20
18
20
20
20
22
0
Rising Food and Energy Prices
Cellulosic Biofuels
Biomass-Based
Diesel
Advanced Biofuels Mandate
40
billion credits
30
Legislated RFS
20
RFS with Paragraph 7 Adjustments
Liquids from Biomass (BTL)
Biodiesel
10
Net Ethanol
Imports
Cellulosic
Ethanol
0
2006
Rising Food and Energy Prices
2010
2020
Ethanol
2030
from Other
Feedstocks
Meeting the Renewable Fuels Standard
40
billion credits
Legislated RFS
RFS with Paragraph 7 Adjustments
30
Liquids from Biomass (BTL)
Biodiesel
Net Ethanol Imports
20
Cellulose Based Ethanol
Corn
Based
Ethanol
10
Ethanol
from Other
Feedstocks
0
2006
Rising Food and Energy Prices
2010
2020
2030
Distribution of Ethanol Volumes Requires
E85 Sales (billion gallons)
16
12
Ethanol in E10
8
Ethanol in E85
4
0
2006
Reference
High Price
2030
Rising Food and Energy Prices
Low Price
Motor Fuels by Source
(billion gallons)
250
200
Biofuel Content of
Diesel
150
Fossil Fuel Content
of Diesel
100
Biofuel Content of
Gasoline
50
0
1995 2000 2005 2010 2015 2020 2025 2030
Rising Food and Energy Prices
Fossil Fuel Content
of Gasoline
Gas-to-Liquids, Coal-to-Liquids, Biomass-to-Liquids, and Oil
Shale Production in the Price Cases, 1990-2030
(million barrels per day)
1.4
History
Projections
Coal to Liquids/
High price
1.2
1.0
0.8
0.6
Biomass to Liquids/
Reference
0.4
0.2
0.0
1990
1995
2000
2005
Rising Food and Energy Prices
2010
2015
2020
2025
Coal to Liquids/
Reference
Oil Shale/High price
Gas to Liquids/
High price
2030
Liquid Fuels Consumption and Domestic Supply
30
million barrels per day
AEO2008
AEO2007
20
Consumption
Net Imports
61%
54%
60%
10
Domestic supply
Projection
History
0
1970
1980
1990
Rising Food and Energy Prices
2000
2010
2020
2030
Carbon Dioxide Emissions
million metric tons
3,500
8,000
Total Carbon Dioxide Emissions
Electricity
7,500
3,000
AEO2007
7,000
6,500
Coal
Natural Gas
Petroleum
AEO2008
2030
AEO2008
2,500
6,000
2,000
AEO2007
2030
2006
5,500
2006
2010
2015
2020
2025
2030
1,500
1,000
500
0
Residential
Commercial
Industrial
Delivered, including losses
Rising Food and Energy Prices
Transportation
Electric Power
AEO 2008 Scenarios
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Reference
Early Release Reference
Low Economic Growth
High Economic Growth
Low Price
High Price
Residential: 2008 Technology
Residential: High Technology
Residential: Best Available Technology
Commercial: 2008 Technology
Commercial: High Technology
Commercial: Best Available Technology
Industrial: 2008 Technology
Industrial: High Technology
Transportation: High Technology
Electricity: Low Nuclear Cost
Electricity: High Nuclear Cost
Electricity: Low Fossil Cost
Electricity: High Fossil Cost
Rising Food and Energy Prices
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Renewable Fuels: High Renewable Cost
Renewable Fuels: Low Renewable Cost
Oil and Gas: Rapid Technology
Oil and Gas: Slow Technology
Oil and Gas: High LNG Supply
Oil and Gas: Low LNG Supply
Oil and Gas: ANWR
Coal: Low Coal Cost
Coal: High Coal Cost
Integrated 2008 Technology
Integrated High Technology
Integrated Alternative Weather Case
High Commodity Cost
Low Commodity Cost
Restricted Non-Natural Gas Electricity
Generation
• Restricted Natural Gas Supply
• Combined High Demand/Low Natural
Gas Supply Case
Policy Change Possibilities
Greenhouse Gas
Legislation
25
Rising Food and Energy Prices
Recent EIA Policy Analysis
• Energy and Economic Analysis of S. 2191, America’s
Climate Security Act of 2007 – April 2008
• Energy and Economic Analysis of S. 1766, the Low
Carbon Economy Act of 2007
• Proposal requiring 25 percent renewable fuels in the
motor vehicle transportation and electricity markets by
2025
26
Rising Food and Energy Prices
Recent EIA Policy Analysis (Continued)
• Analysis of S. 280, the Climate Stewardship and
Innovation Act of 2007
• Impacts of a 15-Percent Renewable Portfolio Standard,
June 2007
• All available at:
– http://www.eia.doe.gov/oiaf/service_rpts.htm
– http://www.eia.doe.gov/oiaf/analysis.htm
27
Rising Food and Energy Prices
Key GHG Policy Analysis Factors
• Stringency of emission limits
• Coverage
– What gases? What sectors?
• Timing / Banking
• Treatment of offsets
– Foreign and domestic -- Agricultural and forestry
• Safety Valve / Technology Accelerator Payment
• Allowance allocation methodology
• Use of allowance revenue and other supporting programs
28
Rising Food and Energy Prices
Climate Stewardship and Innovation Act of
2007 (S. 280)
• Caps GHG emissions on covered entities in the electric
generation, commercial, and industrial sectors, together
with producers and importers of hydrofluorocarbons,
perfluorocarbons, and sulfur hexafluoride, and petroleum
refiners and product importers.
• Covered entities include all entities in covered sectors
that own or control a single facility with emissions of
10,000 metric tons or more.
– Emissions of covered entities accounted for an estimated 78
percent of total U.S. GHG emissions in 2004.
– As emissions by covered entities are subject to limits that tighten
over time under S.280, their share in total U.S. GHG emissions
falls.
29
Rising Food and Energy Prices
Climate Stewardship and Innovation Act of
2007 (S. 280)
• Covered Entity Emission Limits
Time Period
2012 through 2019
2020 through 2029
2030 through 2049
2050 and beyond
Limit Description
2004 level
1990 level
18 percent below 1990 level
60 percent below 1990 level
• Offsets (domestic or international) can be used
in an amount equivalent to up to 30 percent of
the allowance obligation
30
Rising Food and Energy Prices
Energy-Related CO2 Emissions: S.280
(million metric tons)
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Electric Power
Residential
2005
2005 Actual
Transportation
Commercial
2020
Reference
Industrial
2030
S.280
Reference
S.280
31
Rising Food and Energy Prices
Electricity Generation by Fuel : S.280
(billion kilowatthours)
Reference Case
S. 280 Core Case
6000
6000
5000
5000
4000
4000
3000
3000
2000
2000
1000
1000
0
0
2005
2010
2015
Coal w/o CCS
2020
2025
Nuclear
2030
2005
Renewables
2010
2015
Natural Gas
2020
2025
2030
Oil/Other
• Nuclear and renewable generation grows , displacing coal-fired generation. Nuclear and renewables
are generally less expensive than coal with carbon capture and sequestration (CCS) without any
special incentives.
• S.280 is also projected to reduce electricity demand growth, reflecting both higher electricity prices
and targeted support of high-efficiency equipment
32
Rising Food and Energy Prices
Summary
•
•
•
In the AEO 2008 Reference Case traditional fossil fuels are
expected to continue to meet the bulk of energy requirements
over the projection period
U.S. energy demand is projected to grow at an average annual
rate of 0.7 percent
The energy efficiency of the economy is projected to increase
at an average annual rate of 1.7 percent
• EISA 2007 will have a significant impact on liquid fuels
production and use.
– Lower petroleum imports
– Lower CO2 Emissions
– Shift towards diesel
Rising Food and Energy Prices
Summary
•
The RFS, made up of four mandates, met by a combination of ethanol, diesel
production and imports.
–
–
•
Achieves 32 billion gallons by 2022
RFS implementation is in its early phases and significant uncertainties remain.
The impacts of GHG policies depend on the specifics of the proposal
but the likely impacts include:
–
–
–
–
•
(continued)
Lower coal generation
Greater nuclear, renewable, and natural gas (under some circumstances) generation
Reduced energy demand
Higher energy prices
Key uncertainties include:
–
–
–
Cost, performance and feasibility of rapidly commercializing and deploying key lowcarbon generating technologies
Cost and availability of domestic and foreign offsets
If these technologies can not be deployed in a timeframe consistent with the emission
reduction requirements, allowance prices, energy prices and the use of other lowcarbon fuels, particularly natural gas, will be higher
Rising Food and Energy Prices
Annual Energy Outlook 2008, June 2008
Short Term Energy Outlook, Monthly
AEO 2008 Assumptions, June 2008
A. Michael Schaal
Energy Information Administration
[email protected]
www.eia.doe.gov
Rising Food and Energy Prices