Annual Energy Outlook 2011

and an update on EIA activities

NGA Center for Best Practices

State Energy Working Group 

February 8, 2011

Richard Newell, Administrator
• Increased estimates for U.S. shale gas resources drive 

increased U.S. production, lower prices, and lower imports of 

natural gas

• Industrial natural gas demand recovers, reversing recent trend

• Non-hydro renewables and natural gas are the fastest growing 

electricity generation sources, but coal remains the dominant 

fuel because of the large amount of existing capacity

• Oil imports fall due to increased domestic production—

including biofuels—and greater fuel efficiency

• U.S. carbon dioxide emissions rise slowly, but do not pass 

2005 levels again until 2027

Key results from the AEO2011 Reference case,

which assumes current laws remain unchanged

Richard Newell, February 8, 2011 2
What is included (and excluded) in developing EIA’s 

“Reference Case” projections?

• Generally assumes current laws and regulations

– excludes potential future laws and regulations (e.g., proposed 

greenhouse gas legislation and proposed fuel economy 

standards are not included)

– provisions sunset as specified in law (e.g., renewable tax credits 

expire)

• Includes technologies that are commercial or reasonably 

expected to become commercial over next decade or so

– includes projected cost and efficiency improvements due to 

technology improvements, as well as cost reductions linked to 

cumulative deployment levels.

– does not assume revolutionary or breakthrough technologies

Richard Newell, February 8, 2011 3
• Natural gas and oil supply

– More than doubled the technically recoverable U.S. shale gas resources assumed 

in AEO2010 and added new shale oil resources

– Updated offshore data and assumptions, pushing out start dates for several 

projects as a result of the drilling moratoria and delaying Atlantic and Pacific 

offshore leasing beyond 2017

• Electricity

– Updated costs for new power plants

– Expanded number of electricity regions to 22 from 13, allowing better regional 

representation of market structure and power flow

• Transport

– Increased limit for ethanol blending into gasoline from E10 to E15 for approved 

vehicles, as a result of the EPA waiver granted in October 2010

– Includes California’s Low Carbon Fuel Standard, which reduces the carbon 

intensity of gasoline and diesel fuels in that state by 10% from 2012 through 2020 

– Revised light duty vehicle miles travelled downward

– Updated electric and plug-in hybrid electric battery cost and size

Key updates included in the AEO2011 Reference case

Richard Newell, February 8, 2011 4
Richard Newell, February 8, 2011

U.S. Energy Consumption

5
Current U.S. energy supply is 83% fossil fuels;

demand is broadly distributed among the major sectors

Energy supply Energy demand

Source: EIA Annual Energy Review 2009

Nuclear

9%

Renewable

8%

Coal

21%

Natural Gas

25%

Petroleum

37% Transportation

29%

Electricity –

Residential

15%

Industrial

(non-electric)

20%

Electricity –

Industrial

10%

Electricity –

Commercial

15% Residential &

Commercial

(non-electric)

11%

Residential & Commercial

42%

Industrial

30%

2009 total U.S. energy use = 94.6 quadrillion Btu

Richard Newell, February 8, 2011 6
0

25

50

75

100

125

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Renewables grow rapidly, but under current policies 

fossil fuels still provide 78% of U.S. energy use in 2035

U.S. primary energy consumption

quadrillion Btu per year

Coal

Oil and other liquid fuels

Natural gas

History Projections

Nuclear

Liquid biofuels

Renewables (excluding liquid biofuels)

Source: EIA, Annual Energy Outlook 2011

37%

25%

21%

9%

7%

1%

33%

24%

21%

10%

8%

3%

Shares of total U.S. energy

2009

Richard Newell, February 8, 2011 7
0

50

100

150

200

2005 2010 2015 2020 2025 2030 2035

Energy efficiency gains reduce consumption 13% from where 

it would otherwise be; structural change is even larger

quadrillion Btu

Source: EIA, Annual Energy Outlook 2011

Constant efficiency

Constant intensity

Efficiency 

change

Structural 

change

AEO2011 Reference case

-33%

-13%

Richard Newell, February 8, 2011 8
0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Energy and CO2 per dollar of GDP continue to decline;

per-capita energy use also declines

index, 2005=1

History Projections

Source: EIA, Annual Energy Outlook 2011

2009

Energy per capita

Energy per dollar GDP

CO2 per dollar GDP

Richard Newell, February 8, 2011 9
0

1

2

3

4

5

6

7

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

In the AEO2011 Reference case, energy-related CO2

emissions grow almost 6% over 2005 levels by 2035

billion metric tons carbon dioxide

Energy-related CO2 emissions

History Projections

Richard Newell, February 8, 2011 Source: EIA, Annual Energy Outlook 2011

2009

2005 2020 2035

Energy-related CO2

emissions 5.98 5.77 6.31

% change from 2005 - - -3.4% 5.6%

2005

10
Richard Newell, February 8, 2011

Electricity

11
In 2009, electricity generation was 70% fossil fuels, 20% 

nuclear, and 10% renewable

Nuclear

20.2%

Natural gas

23.3%

2009 Total net generation:

3,953 billion kWh

Coal

44.6%

2009 Non-hydro renewable

net generation:

141 billion kWh

Geothermal: 0.4%

Other biomass: 0.5%

Wood and woodderived fuels: 0.9%

Other 

renewable

3.6%

Conventional

hydroelectric

6.9%

Other

0.3%

Wind: 1.8%

Solar thermal 

and PV: <0.1%

Petroleum

1.0%

Other gases

0.3%

Richard Newell, February 8, 2011 Source: EIA Electric Power Monthly, October 2010 12
Richard Newell, February 8, 2011

-2

0

2

4

6

8

10

12

14

1950 1960 1970 1980 1990 2000 2015 2025 2035

While projected electricity consumption grows by 30%, 

the rate of growth has slowed

percent growth (3-year rolling average)

Projections

History

Period Annual Growth

1950s 9.8

1960s 7.3

1970s 4.7

1980s 2.9

1990s 2.4

2000-2009 0.5

2009-2035 1.0

Source: EIA, Annual Energy Outlook 2011

2009

13
0

1

2

3

4

5

6

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

electricity net generation

trillion kilowatthours per year

Natural gas

Renewable

History Projections

Nuclear

Oil and other

Coal

20%

23%

25%

1% 1%

45%

43%

14%

10%

17%

The projected electricity mix gradually shifts to lower-carbon options, 

with generation from natural gas rising 37% and renewables rising 73% 

Source: EIA, Annual Energy Outlook 2011

2009

Richard Newell, February 8, 2011 14
Richard Newell, February 8, 2011

0

50

100

150

200

250

300

350

400

450

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Non-hydro renewable sources grow nearly three-fold, 

meeting 23% of projected electricity generation growth

non-hydropower renewable generation

billion kilowatthours per year

Wind

History Projections

Solar

Biomass

Geothermal

Waste

Source: EIA, Annual Energy Outlook 2011

2009

15
Natural gas, wind and other renewables account for the vast 

majority of capacity additions from 2009 to 2035

Coal

313 (30%)

Natural gas

351 (34%)

Hydropower*

99 (10%)

Nuclear

101 (10%)

Other 

renewables

15 (1%)

Other fossil

118 (11%) * Includes pumped storage

Coal

14 (6%)

Natural gas

135 (62%)

Hydropower*

3 (1%)

Nuclear

6 (3%)

Other 

renewables

27 (12%)

Other 

fossil

1 (0.4%)

2009 capacity Capacity additions 

2009 to 2035

1,033

gigawatts

220

gigawatts

Richard Newell, February 8, 2011 Source: EIA, Annual Energy Outlook 2011

Wind

27 (12%)

Wind

32 (3%)

16

End-use coal

4 (0.3%)

End-use coal

7 (3%)
Richard Newell, February 8, 2011

Natural gas

17
Success in the Barnett prompted companies to look at other 

shale formations in the United States

Richard Newell, February 8, 2011 18
U.S. shale gas production increased 14-fold over the last 

decade; reserves tripled over the last few years

0

1

2

3

4

5

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Eagle Ford (TX)

Marcellus (PA and other Eastern states)

Haynesville (LA and TX)

Woodford (OK)

Fayetteville (AR)

Barnett (TX)

Antrim (MI, IN, and OH)

Source: Lippman Consulting (2010 estimated)

annual shale gas production 

trillion cubic feet per year

Richard Newell, February 8, 2011 19
20

Shale gas has been the primary source of recent growth in 

U.S. technically recoverable natural gas resources

0

500

1,000

1,500

2,000

2,500

3,000

2000 2005 2006 2007 2008 2009 2010 2011

AEO edition

U.S. dry gas resources

trillion cubic feet

Unproved 

shale gas

Unproved 

other gas

(including 

Alaska* and 

offshore)

Proved 

reserves

(all types & 

locations)

* Alaska resource estimates prior to AEO2009 reflect resources from the North Slope that were not included in previously published documentation.

Source: EIA, Annual Energy Outlook 2011

827

1,481

2,552

245

Richard Newell, February 8, 2011
0

5

10

15

20

25

30

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Four-fold increase in shale gas production offsets declines in other 

U.S. supply, meeting consumption growth and lowering import needs

U.S. dry gas

trillion cubic feet per year

Alaska

Non-associated offshore

History Projections

Associated with oil

Coalbed methane

Net imports

Non-associated onshore

Shale gas

Source: EIA, Annual Energy Outlook 2011

2009

11%

1%

9% 7%

9% 8%

20%

14%

8%

2%

8%

7%

46%

1%

28% Tight gas 22%

Richard Newell, February 8, 2011 21
Source: EIA, Annual Energy Outlook 2011

Natural gas consumption is quite dispersed; a number of key economic 

and market drivers underpin natural gas consumption growth

Sector

TCF gas 

consumption Growth

(2009-2035) Key drivers

2009 2035

Industrial, 

including 

combined heatand-power

7.3 9.3 26% +187% combined heat-and-power 

generation; +30% output of gasintensive industry; lower natural gas 

prices

Central 

electric power

6.9 7.8 13% +30% electricity consumption; lower 

natural gas prices; offset by +72% 

renewable generation and +24% coal 

generation

Commercial 3.1 3.8 22% +37% commercial floorspace; -3% 

energy intensity

Residential 4.7 4.8 <1% +30% number of households; +19% 

total square footage; -16% energy 

intensity 

Richard Newell, February 8, 2011 22
23

Natural gas price projections are significantly lower than 

past years due to an expanded shale gas resource base

natural gas spot price (Henry Hub)

2009 dollars per million Btu

History Projections

Source: EIA, Annual Energy Outlook 2011

2009

0

2

4

6

8

10

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

AEO2010

Updated AEO2009

AEO2011

Richard Newell, February 8, 2011
Richard Newell, February 8, 2011

Oil and other liquid fuels

24
0

5

10

15

20

25

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

U.S. liquid fuels consumption

million barrels per day

History Projections

Natural gas plant liquids

Biofuels including imports

Petroleum supply

Net petroleum imports

U.S. imports of liquid fuels fall due to increased domestic 

production—including biofuels—and greater fuel efficiency

2009

Source: EIA, Annual Energy Outlook 2011

13%

12%

42%

31%

10%

4%

52%

34% Liquids from coal

2%

Richard Newell, February 8, 2011 25
0 2 4 6 8 10 12 14 16 18 20 22

2009

2035

U.S. liquid fuels

million barrels per day

Net product imports

Net crude oil imports

Natural gas plant liquids

Liquids from coal

Biofuels, natural gas liquids, and crude oil production are key 

sources of increased domestic liquids supply

Source: EIA, Annual Energy Outlook 2011

Gulf of Mexico

Crude oil production

Biofuels (including net imports)

Refinery processing gain

Total consumption

Richard Newell, February 8, 2011 26
billions ethanol-equivalent gallons

0

5

10

15

20

25

30

35

40

45

2009 2022 2035

Biofuels fall short of the goal in 2022, but exceed the 

36 billion gallon RFS target by 2030

Legislated RFS in 2022

RFS with 

adjustments under 

CAA Sec.211(o)(7) 

Biodiesel

Other 

Advanced

Net imports

Cellulosic biofuels

Corn ethanol

Richard Newell, February 8, 2011 Source: EIA, Annual Energy Outlook 2011 27
Source: EIA, Annual Energy Outlook 2011

Efficiency improvements partially offset underlying drivers of 

growth in transportation services

2009 2035

Growth 

(2009-2035)

Light duty vehicles

Fuel consumption (million barrels per day oil equivalent) 8.9 10.2 15%

Number of licensed drivers (millions) 207 265 28%

Miles per licensed driver 13,100 15,300 17%

Efficiency of vehicle stock (mpg) 20.8 27.8 34%*

Heavy duty vehicles

Fuel consumption (million barrels per day oil equivalent) 2.2 3.2 47%

Manufacturing output (billion 2005 dollars) 4,197 6,761 61%

Number of freight trucks (millions) 8.7 16.6 90%

Miles per vehicle 23,700 20,200 -15%

Efficiency of vehicle stock (mpg) 6.1 6.6 9%**

Richard Newell, February 8, 2011

* Equal to a 25% reduction in fuel use per mile. ** Equal to an 8% reduction in fuel use per mile.

28
Unconventional vehicles meet over 40% of U.S. light-duty 

vehicle sales in 2035

0

5

10

15

20

2000 2009 2015 2020 2025 2030 2035

Conventional gasoline

Diesel

Gaseous and fuel cell

Mild hybrid electric

Hybrid electric

Plug-in hybrid and all-electric

E85 flex fuel

U.S. light car and truck sales

millions 

Source: EIA, Annual Energy Outlook 2011

History Projections

Richard Newell, February 8, 2011 29
Richard Newell, February 8, 2011

0

25

50

75

100

125

150

175

200

225

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Oil prices in the Reference case rise steadily;

the full AEO2011 will include a wide range of oil prices

History Projections

Source: EIA, Annual Energy Outlook 2011

2009

High oil price

Low oil price

AEO2011 Reference

annual average price of low sulfur crude oil

real 2009 dollars per barrel

30
Richard Newell, February 8, 2011

Other EIA activities

31
EIA’s Energy and Financial Markets Initiative

• Collection of critical energy information to improve 

market transparency

– improved petroleum storage capacity data

– other improvements to data quality and coverage

• Analysis of energy and financial market dynamics to 

improve understanding of what drives energy prices

– internal analysis and sponsorship of external research

• Outreach with other Federal agencies, experts, and the 

public

– expert workshops

– public sessions at EIA’s energy conferences

– solicitation of public comment on EIA’s data collections

Richard Newell, February 8, 2011 32
On Dec. 1, 2010, EIA started publishing much-improved data 

on petroleum products storage capacity 

• Analysis of inventory levels in the context of storage 

capacity is important for understanding petroleum market 

activity and price movements, especially at key market 

centers such as Cushing, OK 

• EIA’s new storage capacity data will be a major 

improvement over previous data

– greater coverage: EIA is collecting the new data from terminals and 

pipelines, in addition to refineries

– more frequent: unlike prior annual refinery-only data collection, the 

new data will be semi-annual, which is particularly important given 

opportunities to shift storage capacity across products to meet 

seasonal needs that vary across products

– market center information: in addition to standard PADD-level 

reporting, the new data will break out storage capacity at Cushing 

Richard Newell, February 8, 2011 33
Many factors influence the formation of oil prices

and other energy prices

Richard Newell, February 8, 2011 34

Supply

Affected by current 

conditions and future 

expectations for:

• energy prices

• OPEC supply capacity

• usable spare capacity

• non-OPEC capacity

• geopolitics

• weather 

• E&P costs 

• E&P investments

• E&P innovations

Physical balancing

• Inventories

Markets & market behavior

• Energy prices

‐ spot

‐ futures

‐ options

‐ spreads

‐ swaps

• Other financial markets

‐ other commodity prices

‐ commodity investment

‐ currency exchange rates

‐ stocks and other assets 

‐ interest rates

Demand

Affected by current 

conditions and future 

expectations for:

• energy prices

• economic growth

• industrial production

• goods transport

• personal transport

• weather

• innovation in energyusing equipment
 Quick Facts to provide the most important State 

energy information

 Overviews and maps to explain each State’s energy 

markets

 Data tables to provide the most current State-level 

statistics from EIA surveys

State Energy Profiles feature...

 Comprehensive data for analysis

 Analytical tool

 Common units

 All fuels, all sectors

State Energy Data System (SEDS)

EIA portals provide State energy data in one convenient place

Richard Newell, February 8, 2011 35
New this year for State Energy Profiles

and State Energy Data System

• State Energy Profiles

– New maps of selected energy-intensive areas (June 2010)

– New dynamic graphs on State profile pages (in development)

– Website redesign (launching soon)

• State Energy Data System

– Improved estimation methodology (June 2010)

– New tables for total end-use consumption (publishing soon)

– Website redesign (launching soon)

Richard Newell, February 8, 2011 36
• Only comprehensive source of energy-related characteristics and 

consumption across U.S. households

• Only EIA survey that collects household data; conducted every 4 years 

Residential Energy Consumption Survey (RECS)

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

New

England

Middle

Atlantic

East North

Central

West North

Central

South

Atlantic

East South

Central

West

South

Central

Mountain Pacific

Census Division

Quadrillion Btu (quads)

Electricity

Natural Gas

Fuel Oil

Other

0.00

0.10

0.20

0.30

0.40

0.50

0.60

Space

Heating

AirConditioningWater

Heating

Refrigerators Other

Energy End Use

Quadrillion Btu (quads)

New York

Florida

Texas

California

Richard Newell, February 8, 2011 37

Fuel use varies by region... ...due in part to different end-use needs
Expanded 2009 RECS

RECS 2005

 4,382 completed interviews

 Low sampling precision for all 

areas (census regions, divisions, 

States)

 National, census region and 

division estimates, but state-level 

estimates for only four states

 Sample too small to support 

complex analyses

RECS 2009

 12,083 completed interviews

 Greater precision assured 

for key geographies and 

statistics

 End use statistics for 16 

states, with more precision 

(MA, NY, PA, NJ, VA, GA, FL, TN, 

MI, IL, WI, MO, TX, CO, AZ, CA)

 Greater statistical power for 

multivariate analyses

 First release of 2009 RECS 

Home Energy 

Characteristics in March 

2011

Richard Newell, February 8, 2011 38
A new EIA.gov goes live this week

• New homepage and 

improved navigation

• Updated logo and new visual 

identity

• A new “Today in Energy” 

education product that: 

– Publishes a daily release of 

timely and topical bites of our 

information, on the EIA 

homepage, in plain language.

– Allows us to highlight current 

issues, topics, and trends. 

Richard Newell, February 8, 2011 39
40

For more information

U.S. Energy Information Administration home page www.eia.gov

Short-Term Energy Outlook www.eia.gov/emeu/steo/pub/contents.html

Annual Energy Outlook www.eia.gov/oiaf/aeo/index.html

International Energy Outlook www.eia.gov/oiaf/ieo/index.html

Monthly Energy Review www.eia.gov/emeu/mer/contents.html

EIA Information Center (202) 586-8800

Live expert from 9:00 AM – 5:00 p.m. EST

Monday – Friday (excluding Federal holidays)

email: InfoCtr@eia.gov

Richard Newell, February 8, 2011
Richard Newell, February 8, 2011

Some supply sources and demand sectors are strongly 

linked, while others are more dispersed

Source: EIA Annual Energy Review 2009 41

2009