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Comparison of Predicted Energy Futures: A comparison of AEO2010 with AEO2011

Abigail Vickers and Julie McDill*

Mid-Atlantic Regional Air Management Association

July 14, 2011

Draft

The U.S. Energy Information Agency (EIA) prepares an Annual Energy Outlook (AEO) predicting future energy usage by 

sector and fuel. The AEO presents long-term projections of energy supply, demand, and prices based on results from 

EIA’s National Energy Modeling System (NEMS). NEMS projects the production, imports, conversion, consumption, and 

prices of energy, subject to assumptions on macroeconomic and financial factors, world energy markets, resource 

availability and costs, behavioral and technological choice criteria, energy technology cost and performance 

characteristics, and demographics.

MARAMA is estimating future air pollutant emissions for the years 2017 and 2020. The emissions inventory will support 

a single integrated, one-atmosphere air quality modeling platform to support State air quality attainment 

demonstrations. For future projections MARAMA initially used the AEO2010 to estimate change in activity for source 

categories that burn fuel. AEO2010 was published in May, 2010 (EIA 2010). AEO2010 projections are based on Federal, 

State, and local laws and regulations in effect as of the end of October 2009. Since the inventory was finalized a new 

AEO has been released by EIA which relies on information through October 2010. Some important changes have

occurred in energy outlook between October 2009 and October 2010. It is important to determine if these changes will 

impact our future inventories. Though the primary focus lies on years 2017 and 2020, the overall change of the graph is 

of interest.

This work was undertaken to compare AEO2010 to the recently released AEO2011 to determine what differences exist

between the growth scenarios. The difference in expected percent change in fuel usage between 2010 and 2011 was 

calculated for a variety of fuels and sectors. A negative value indicates that AEO2010 predicted growth is higher than 

AEO2011. 

For this report, Residential, Commercial, Industrial, Transportation, and Electric Power were each reviewed for changes 

between AEO2010 and AEO2011. Fuel types including distillate fuel oil, residual fuel oil, coal, natural gas, and renewable 

resources were considered. The regions examined include New England (Includes: CT, ME, MA, NH, RI, and VT), MidAtlantic (Includes: PA, MD, DE, DC, WV, and VA) and South Atlantic (Includes: AL, FL, GA, KY, MI, NC, SC, and TN).

 

*

This work was supported by a grant to MARAMA from the Pennsylvania Department of Environmental Protection
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To facilitate the analysis, this report identifies thresholds for what constitutes a major change as follows:

 An increase or decrease of 1% or less is considered to be no change and is not discussed in this report, and is 

marked on the graphs by a blue color and ends in a “square dot” line

 An increase or decrease of between 1% and 5% is considered to be a minor change, and is marked on the graphs 

by a green color and ends in a “long dash dot” line;

 An increase or decrease above 5% is considered a major change, and is marked on the graphs by a red color. 

Table 1 summarizes the changes observed by fuel type and sector at the year 2020. The sector and fuel combinations 

with major changes include 

New England - Industrial/Natural gas – Major increase

New England – Electric Power/ Natural Gas – Major increase

New England – Electric Power/ Coal – Major decrease

New England – Electric Power/ Renewable energy – Major decrease

Mid-Atlantic – Electric Power/ Natural Gas – Major increase

Table 1. Change between AEO2010 and AEO 2011 at the year 2020.

Sector Fuel South Atlantic Mid-Atlantic New England

Residential Natural Gas Minor increase Minor increase Minor increase

Residential Distillate Fuel Oil No change No change No change

Commercial Natural Gas No Change Minor increase Minor increase

Commercial Distillate Fuel Oil No change No change No change

Commercial Residual Oil No change No change No change

Industrial Natural Gas No change Minor increase Major increase

Industrial Distillate Fuel Oil Minor decrease No change No change

Industrial Residual Oil No change No change Minor decrease

Electric Power Natural Gas Minor decrease Major increase Major increase

Electric Power Coal Minor decrease Minor decrease Major decrease

Electric Power Renewable Energy Minor decrease Minor decrease Major decrease

Electric Power Distillate Fuel Oil No change No change No change

Electric Power Residual Oil No change No change No change

Transportation Distillate Fuel Oil No change Minor increase Minor increase

Transportation Residual Oil Minor decrease Minor increase No change
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Residential

As shown in Figure 1, all three regions show a minor increase in the expected percent residential usage of natural gas. 

Residential distillate usage showed no important change in the comparison.

Figure 1 – Comparison of expected percent change in residential usage of natural gas

Commercial and Industrial

Overall, expected use of natural gas by commercial and industrial sources increased; however the change varied 

regionally as is shown in Figures 2 and 3. In the South Atlantic, there is no difference between AEO2010 and AEO2011. 

However, in the Mid-Atlantic region there is a minor increase of 1% to 2% for commercial and a minor to major change, 

from 1% to 6% increase for Industrial. In comparison, in New England the predicted future use of gas by the commercial 

and industrial sectors increased between AEO2010 and AEO2011. The commercial sector undergoes a minor increase of 

5% while the industrial sector obtains a major increase of 9% to 11% in the out years.

Minor to major changes in the forecast also occurred for the other fuel types. South Atlantic distillate fuel oil 

demonstrated a minor decrease, whereas New England and Mid-Atlantic showed no important changes. In comparison, 

a minor decrease was examined for residual fuel oil in the New England region while there was no important change 

found in the Mid-Atlantic and South Atlantic regions. For industrial coal, there was no change determined in the New 

England region. In the Mid-Atlantic region there was a minor to no increase in the estimated percent usage of coal. A 

solid 2% decrease was established in the South Atlantic region.
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Figure 2 –Comparison of expected percent change in commercial usage of natural gas

Figure 3 – Comparison of expected percent change in industrial usage of natural gas 

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Electric Power

Predicted future fuel use by the electric power sector changed significantly between AEO2010 and AEO2011 as is shown 

in Figures 4, 5, and 6. Across all three regions, predicted usage of coal dropped significantly while use of Natural gas 

increased significantly. In addition, expected usage of renewable energy dropped significantly. 

Predicted future coal usage in the Mid-Atlantic region presents a minor decrease up to 5%. In comparison, the South 

Atlantic’s estimated percent future usage decreases steadily from no change to a major change. New England is 

displaying a consistent decrease from minor, to major. New England begins with a 5% decrease, with a low of 11% 

decrease which then turns and steadily increases to no change in the out years. Overall, for the New England region 

AEO2010 was predicting higher coal usage than AEO2011 and the predicted usage of coal will be less than was expected 

by AEO2010. 

Predictions for natural gas usage by the electric power sector generally increased except the South Atlantic as is shown 

in Figure 5. While the predicted percent of natural gas usage in South Atlantic demonstrates a minor decrease, both the 

Mid-Atlantic and New England demonstrate major increases. The Mid-Atlantic demonstrated a 6% increase and New 

England displays up to 24% increase. These increased natural gas numbers are in contrast to the reduction of coal usage 

in the respective regions. Though there are minor changes in other fuels, it appears that natural gas is the choice to 

replace coal in coming years.

In general the predicted use of renewable fuels has decreased between AEO2010 and AEO2011 as is shown in Figure 6. 

In both the South Atlantic and the Mid-Atlantic regions, there is a minor decrease of about 5% in the out years. The most 

important region in this case is the New England region, with the highest decrease of 24%. Overall, this information 

demonstrates that the New England region is not expected to make as much headway towards renewable energy as 

originally estimated in 2010.

For residual oil, there was no important change in the forecast for all three regions.
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Figure 4 – Comparison of expected percent change in electric power usage of coal

Figure 5 – Comparison of expected percent change in electric power usage of natural gas.

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Figure 6 – Comparison of expected percent change in electric power usage of renewable fuels.

Transportation

There are no change or minor changes in the predicted use of fuels in the transportation sector. For the South Atlantic 

region, no changes are present in the percent usage of distillate fuel oil. A minor increase is expected for both the MidAtlantic and New England regions. While no change is demonstrated for residual fuel oil in the New England region, a 

minor decrease was present in the South Atlantic region and a minor increase was seen in the Mid-Atlantic region. All 

other fuel types demonstrated no important change for all regions. Charts of distillate and residual fuel oil changes are 

shown in figures 7 and 8

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Figure 7 – Comparison of expected percent change in transportation usage of distillate oil.

Figure 8 – Comparison of expected percent change in Transportation usage of residual oil.
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Distillate and Residual Fuel Oil

Though there were no changes demonstrated in the distillate and residual oil graphs, they have been included to 

prepare for the policy changes regarding fuel sulfur content. These are presented in Figures 9 through 15.

Recommendations

The differences between AEO 2010 and AEO2011 are most pronounced in the electric power sector. Fortunately, 

AEO2011 has already been implemented in electric power sources In the MARAMA inventory. However, the reduced 

expectation in the penetration of renewable energy for electric power, particularly in New England should be considered 

in sensitivity runs.

MARAMA recommends that AEO2011 be implemented in the future year modeling inventory for industrial sources. This 

is because of the rate of change in the expected in natural gas usage in industrial sources is considered to be major. The 

small change in the shift to natural gas in residential sources indicates that no adjustment is warranted in this category.

Because transportation fuel usage is predicted by MOVES no adjustment is needed to the MARAMA future year 

inventories for this source category.

Figure 9 – Comparison of expected percent change in residential usage of distillate fuel oil. 
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Figure 10 – Comparison of expected percent change in commercial usage of distillate oil.

Figure 11 – Comparison of expected percent change in commercial usage of residual oil.
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Figure 12 – Comparison of expected percent change in industrial usage of distillate oil.

Figure 12 – Comparison of expected percent change in industrial usage of residual oil.
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Figure 14 – Comparison of expected percent change in electric power usage of distillate oil.

Figure 15 – Comparison of expected percent change in electric power usage of residual oil