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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**

T he 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 Mode ling Sys tem (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 cho ice 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 mo deling platform to support State air quality attainment

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

categories that burn fuel. AEO2010 was publ ished in May, 2010 (EIA 2010). AEO2010 pro jections 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 inf ormation 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. T he difference in expected percent change in fuel usage between 2010 and 2011 was

calculated for a variety of fuels an d sectors . A negative value indicates that AEO 2010 predicted growth is higher than

AEO 2011.

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

between AEO2010 and AEO2011. Fuel types inc luding 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) , Mid

Atlantic (Includes: PA, MD, DE, DC, WV, and VA) and South Atlant ic (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 ProtectionPage 2 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 in crease 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.



### Se **ctor Fue**  **l South Atl**  **anti c**  **Mi d-**  **Atl an**  **ti c**  **Ne w Engl**  **and**

Re si de nti al Na tural Gas Mi nor i nc re as e Mi nor

i nc re as e Mi nor

i ncre ase

Re si de nti al Di sti lla te F ue l Oi l No ch an ge No change No ch ange

Comme rci al Na tural Gas No Change Mi nor i nc re as e Mi nor

i ncre ase

Comme rci al Di sti lla te F ue l Oi l No ch an ge No change No ch ange

Comme rci al Re si dual O il No ch an ge No change No ch ange

Industri al Na tural Gas No ch an ge Mi nor i nc re as e **Maj or i**  **ncre ase** 

Industri al Di sti lla te F ue l Oi l Mi nor d ec re as e No change No ch ange

Industri al Re si dual O il No ch an ge No change Mi nor de cre ase

El ec tri c P owe r Na tural Gas Mi nor d ec re as e **Maj or i**  **ncre as**  **e Maj**  **or i ncre**  **ase**

El ec tri c P owe r Coa l Mi nor d ec re as e Mi nor

d ec re as e **Maj or de**  **cre ase** 

El ec tri c P owe r Re ne wabl e En er gy Mi nor d ec re as e Mi nor

d ec re as e **Maj or de**  **cre ase** 

El ec tri c P owe r Di sti lla te F ue l Oi l No ch an ge No change No ch ange

El ec tri c P owe r Re si dual O il No ch an ge No change No ch ange

Tran spor tati on Di sti lla te F ue l Oi l No ch an ge Mi nor i nc re as e Mi nor

i ncre ase

Tran spor tati on Re si dual O il Mi nor d ec re as e Mi nor

i nc re as e No ch angePage 3 **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

– C omparison 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; howeve r 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.Page 4 Figure 2

– C ompari son of expected percent change in commercial u sage of natural gas

Figure 3

– C omparison of expected percent change in industrial usage of natural gas

-5 -3 -1 1 3 5 7 9 11 13 1520102011201220132014201520162017201820192020202120222023202420252026202720282029203020312032203320342035**D i** **f f** **e r** **e n** **c e** **i n** **P e** **r c** **e n** **t U** **s a** **g e** **2 0** **1 1** **- 2** **0 1** **0** 

### Indus **trial**

**Natur al Gas**  -5 -4 -3 -2 -1 0 1 2 3 4 520102011201220132014201520162017201820192020202120222023202420252026202720282029203020312032203320342035**D i** **f f** **e r** **e n** **c e** **i n** **P e** **r c** **e n** **t U** **s a** **g e** **2 0** **1 1** **- 2** **0 1** **0** 

### Commercial

**Na tur**  **al Gas**

South Atlantic Mid-Atlantic New EnglandPage 5 **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 sign ificantly 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 in creases 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 n atural 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.Page 6 Figure 4

– C omparison of expected percent change in electric power usage of coal

Figure 5

– C omparis on of expected percent change in electric power usage of natural gas.

-5 0 5 10 15 20 25 3020102011201220132014201520162017201820192020202120222023202420252026202720282029203020312032203320342035**D i** **f f** **e r** **e n** **c e** **i n** **P e** **r c** **e n** **t U** **s a** **g e** **2 0** **1 1** **- 2** **0 1** **0** 

### Electric Power

**Natur al Gas** 

South Atlantic Mid-Atlantic New England -15 -13 -11 -9 -7 -5 -3 -1 1 3 520102011201220132014201520162017201820192020202120222023202420252026202720282029203020312032203320342035**D i** **f f** **e r** **e n** **c e** **i n** **P e** **r c** **e n** **t U** **s a** **g e** **2 0** **1 1** **- 2** **0 1** **0** 

### Electric Power

**Coal**

South Atlantic Mid-Atlantic New EnglandPage 7 Figure 6

– C omparison 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 Mid

Atlantic 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 r egion 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 -25 -20 -15 -10 -5 0 520102011201220132014201520162017201820192020202120222023202420252026202720282029203020312032203320342035**D i** **f f** **e r** **e n** **c e** **i n** **P e** **r c** **e n** **t U** **s a** **g e** **2 0** **1 1** **- 2** **0 1** **0** 

### Electric Power

**Renew able Energy** 

South Atlantic Mid-Atlantic New EnglandPage 8 Figure 7

– Comparison of expected percent change in t ran sportation usage of distillate o il.

Figure 8

– Comparison of expected percent change in Transportation usage of residual o il.Page 9 **Distillate and Residual Fuel Oil**

Though there were no changes demonstrated in the distillate and residual oil g raphs, 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 sensitivit y 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 chan ge in the shift to natural gas in r esidential 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.Page 10 Figure 10

– C omparison of expected percent change in c ommercial usage of distillate o il

.

Figure 11

– C omparison of expected percent change in c ommercial usage of residual o il.Page 11 Figure 12

– C omparison of expected percent change in i ndustrial usage of distillate o il.

Figure 12

– C omparison of expected percent change in i ndustrial usage of residual o il.Page 12 Figure 14

– C omparison of expected percent change in electric p ower usage of distillate o il.

Figure 15

– C ompar ison of expected percent change in electric p ower usage of residual o il