# Presentation: 710089

## The Long-Term U.S. Energy Outlook

**California Clean Energy Roundtable**
**January 19-21, 2005**

**Guy Caruso**
**Administrator, Energy Information Administration**

**Notes:**
Thank you for inviting me to participate in this roundtable discussion on clean energy and to provide.
My presentation focuses on highlights from our Annual Energy Outlook, which is our long-term U.S. energy forecast. 
Parts of the Annual Energy Outlook are currently available our website.  We will be releasing the full report later this month. 
Because EIA analyses are required to be policy-neutral, our long-term outlook is generally based on existing Federal, State, and local laws and regulations.  
The potential impacts of pending or proposed legislation, regulations, and standards (and sections of existing legislation requiring funds that have not been appropriated) are not reflected in the projections.  
But before I get to the outlook, I’d like to spend a little time reviewing how California fits into the overall national energy picture.

## California’s Energy Picture

**Petroleum****46%**

**Petroleum****40%**

**Natural Gas****32%**

**Natural Gas****24%**

**Nuclear 4%**

**Nuclear ****8%**

** ****Renewables **** 9%**

**Coal****  23%**

**Coal        1%**

- * Primarily, net interstate flow of electricity.
- Source: Energy Information  Administration, State Energy Data System, 2001 data.

| California |  | U. S. |
| --- | --- | --- |
| 8 quadrillion Btu | Total energy consumption | 96 quadrillion Btu |
| 227 million Btu | Consumption per capita | 338 million Btu |
| $73 billion | Total energy expenditures | $694 billion |
| $2,112 | Expenditures per capita | $2,433 |
|  |  |  |

**California’s Energy Picture**

** ****Other * ****8%**

** ****Renewables **** 5%**

**Energy Consumption CA and US**

**Notes:**
Overall, California ranks second (to Texas) in total energy consumption and ranks 49th in terms of consumption per capita. 
California also ranks 2nd in terms of petroleum, natural gas and electricity consumption.
However, compared with the rest of the nation, California’s average per capita energy consumption is 2/3 thirds of the U.S. average.
Petroleum and natural gas represents 78% of California’s energy consumption compared with 63% for the United States.  

## U.S. Energy Production, Consumption, and Net Imports, 1960-2025 (quadrillion Btu)

**27%**

**38%**

**Net imports**

**Consumption**

**Production**

**Notes:**
Total primary energy consumption is projected to grow from 98 quadrillion British thermal units in 2003 to 133 quadrillion Btu by 2025. 
Domestic energy production is expected to grow from 71.4 quadrillion Btu in 2003 to 82.7 quadrillion Btu in 2025.
Because consumption is expected to increase more rapidly than production, net imports of energy, primarily petroleum, but also natural gas, are projected to meet a growing share of energy demand.
By 2015, total net imports are projected to constitute 34 percent of total U.S. energy consumption up from 27 percent today.  The net import share reaches 38 percent by 2025.

## U.S. Delivered Energy Consumption by Sector,

**0**

**5**

**10**

**15**

**20**

**25**

**30**

**35**

**40**

**Residential**

**Commercial**

**Industrial**

**Transportation**

**2003**

**Projected, 2025**

**U.S. Delivered Energy Consumption by Sector,**
**2003 and 2025 (quadrillion Btu)**

**Notes:**
 In the U.S. energy market, the transportation sector consumes about two-thirds of all petroleum products and the industrial sector about one-quarter. The remaining 10 percent is divided among the residential, commercial, and electric power sectors. 
With limited opportunities for fuel switching in the transportation and industrial sectors in the near term, large price-induced changes in U.S. petroleum consumption are unlikely, unless:
Changes in petroleum prices are much larger than we expect; 
There are significant change in the efficiencies for petroleum-using equipment;
Or new processes or technologies are developed that allow replacement of petroleum products in the transportation or industrial sectors.  

## U.S. Petroleum Production, Consumption, and Imports, 1960-2025 (million barrels per day)

**56%**

**66%**

**Net Imports**

**Consumption**

**Production**

**68%**

**Reference Case**

**October Oil**
**Futures Case**

**October Oil**
**Futures Case**

**Reference Case**

**Notes:**
Total U.S. domestic petroleum supply is projected to decrease from 9.1 million barrels per day in 2003 to 8.8 million barrels per day in 2025 after rising in 2009 as a result of increased offshore production. 
Petroleum demand is projected to grow from 20 to 27.9 million barrels per day by 2025, led by demand growth in transportation fuels.
Due to rising demand, the share of petroleum demand met by net imports is projected to increase from 56 percent in 2003 to 68 percent by 2025.
The figure illustrates that even with the higher oil prices in the October oil futures case, the import share of total U.S. petroleum demand continues to rise to 66 percent in 2025. 
To evaluate the effects of a somewhat higher price path on, EIA completed an alternative case, the October Oil Futures case, which is based extrapolating NYMEX futures market oil prices.  In the October Oil Futures case, crude oil prices reach $44 per barrel in 2005 before falling to about $31 per barrel in 2010—about $6 per barrel higher than the reference case projection. Beyond 2010, the gap between the prices in this scenario and the reference case narrows slowly.  The 2025 price of $35 per barrel is about $5 per barrel higher than in our reference case.

## U.S. Natural Gas Production, Consumption, and Net Imports,

**1960-2025 (trillion cubic feet)**

**15%**

**28%**

**Net Imports**

**Consumption**

**Production**

**Natural Gas Net Imports, 2003 and 2025**
**(trillion cubic feet)**

**2.8**

**0.4**

**2.3**

**6.4**

**0**

**1**

**2**

**3**

**4**

**5**

**6**

**7**

**Pipeline**

**Liquefied Natural Gas**

**2003**

** ****Projected, 2025**

**Notes:**
Total natural gas demand is expected to increase from 21.9 trillion cubic feet (Tcf) in 2003 to 30.7 Tcf in 2025. Growth in demand for electricity generation and industrial applications accounts for about 75 percent of the projected growth.
Domestic gas production is expected to increase more slowly than consumption over the forecast, rising from 19.1 trillion cubic feet (Tcf) in 2003 to 21.8 Tcf in 2025. 
Growing production is supported by rising wellhead gas prices, relatively abundant gas resources, and improvements in technologies, particularly for unconventional gas.  
Economic conditions allow an Alaskan pipeline to begin moving gas to the lower 48 States in 2016. 
The difference between consumption and production is made up by increasing use of imports. Net imports grow from 3.2 Tcf in 2003 to 8.7 Tcf in 2025.  

## U.S. Electricity Generation by Fuel, 2003 and 2025

**(billion kilowatthours)**

**3**

**9**

**16**

**20**

**51**

**3**

**8**

**24**

**14**

**50**

**0**

**1,000**

**2,000**

**3,000**

**Coal**

**Nuclear**

**Natural Gas**

**Renewable**

**Petroleum**

**2003**

**Projected, 2025**

**  ****(% of total)**
** **

**Notes:**
The natural gas share of electricity generation is projected to increase from 16 percent in 2003 to 24 percent in 2025. Coal remains the primary fuel for electricity generation through 2025. 
Nuclear generating capacity is projected to increase from 99.2 gigawatts in 2003 to 102.7 gigawatts in 2025 as a result of uprates of existing plants.  All existing nuclear plants are projected to continue to operate, but new plants are not expected to be economical. 
Renewable technologies grow slowly because of the relatively low costs of fossil-fired generation and because competitive electricity markets favor less capital-intensive technologies.
Between 2004 and 2025, over 281 gigawatts of new generating capacity is added.  Much of the new capacity is added in the South due in part, to population migration.  Most new additions will be gas-fired units.
California is projected to increase its capacity by almost 50% by adding 32 gigawatts of capacity.

## U.S. Energy Use per Capita and per Dollar of Gross Domestic  Product, 1970-2025 (index, 1970 = 1)

**Notes:**
Between 2003 and 2025, energy intensity is projected to decline at an average annual rate of 1.6 percent as efficiency gains and structural shifts in the economy offset growth in the demand for energy services.  
Energy use per person is projected to increase, with growth in demand for energy services only partially offset by efficiency gains.  
Per capita energy use increases by 0.5 percent per year between 2003 and 2025.

## Total Carbon Dioxide Emissions, 1980-2025

**9,000**

**1980**

**1990**

**2000**

**2010**

**2025**

**History**

**Projected, 2025**

**Total Carbon Dioxide Emissions, 1980-2025**
**(million metric tons)**

**6,627 in 2010**

**8,062 in 2025**

**Carbon Dioxide Emissions Intensity, 1980-2025**
**(metric tons per million 2000 dollars of GDP)**

**506 in 2010**

**397 in 2025**

**Notes:**
Carbon dioxide emissions from energy use are projected to increase from 5,789 million metric tons in 2003 to 7,052 million metric tons in 2015 in AEO2005.  By 2025, they reach 8,062 million metric tons.  Emissions increase at an average annual rate of 1.5 percent from 2003 to 2025. AEO2004 had projected emissions of 8,142 million metric tons in 2025.
Projected residential, commercial and electric power sector carbon dioxide emissions in 2015 and 2025 are higher in AEO2005 when compared with AEO2004.  However, the higher levels of emissions in these three sectors are offset by lower total carbon dioxide emissions in the industrial and transportation sectors, particularly in 2025.
With the projection of declining energy intensity in the economy, carbon dioxide emissions per dollar of GDP are also expected to decline. The carbon dioxide intensity of the economy is expected to decline at an average annual rate of 1.5 percent through 2015—and through 2025.

## EIA Annual Energy Outlook: Highlights

- U.S. energy consumption is projected to increase 36% between  2003 and 2025.  Domestic energy production is expected to grow 16%.
- U.S. oil import reliance will grow from 56% to 68%.
- Transportation will continue to dominate consumption of petroleum products.
- Coal will remain the primary fuel for electricity generation through 2025, but the natural gas share of electricity generation will increase, but.
- The energy efficiency of the economy will increase at an average annual rate of 1.6 %.
- Carbon dioxide emissions will grow at an average annual rate of 1.5%.