U.S. Energy Information Administration Projections

A principal source for projections related to energy use in the United States is the Annual Energy Outlook (AEO), updated each year by the EIA. The AEO is based on the National Energy Modeling System (NEMS) developed by the EIA and used to project energy use over the next 25 years for a range of scenarios. The “reference case” scenario is arguably the most widely cited of EIA cases. It reflects EIA’s best estimate of trends for a “business-as-usual” case that assumes continuation of all current laws, regulations, and policies. Other scenarios published by EIA use different assumptions about factors such as economic growth rates, fuel cost or price trends, and rates of technological change in different sectors of the economy (Table 2.1).

TABLE 2.1 Summary of Cases Used in EIA 2006 Projections of U.S. Coal Use Assuming No Change in Current Policies

Scenario

Description

Reference case

Baseline economic growth (3%/yr), increased world oil price, and assumptions about adoption of renewable, nuclear, and other energy technologies. Gradual decline of minemouth coal price

Low coal cost

Productivity for coal mining and coal transportation assumed to increase more rapidly than in the reference case. Coal mining wages, mine equipment, and coal transportation equipment costs assumed to be lower than in the reference case

High coal cost

Productivity for coal mining and coal transportation assumed to increase more slowly than in the reference case. Coal mining wages, mine equipment and coal transportation equipment costs assumed to be higher than in the reference case

Low economic growth

Gross domestic product grows at an average annual rate of 2.4% for 2004 through 2030

High economic growth

Gross domestic product grows at an average annual rate of 3.5% for 2004 through 2030

Low O&G price

Prices for worldwide crude oil and natural gas (O&G) resources are lower than in the reference case. World oil prices are $28 per barrel in 2030, compared to $50 per barrel in the reference case, and lower-48 wellhead natural gas prices are $4.96 per thousand cubic feet in 2030, compared to $5.92 in the reference case.

High O&G price

Prices for worldwide crude oil and natural gas resources are higher than in the reference case. World oil prices are about $90 per barrel in 2030 and lower-48 wellhead natural gas prices are $7.72 per thousand cubic feet in 2030, compared to $5.92 in the reference case.

Slow O&G technology

Cost, finding rate, and success rate parameters adjusted for 50% slower improvement than in the reference case

Rapid O&G technology

Cost, finding rate, and success rate parameters adjusted for 50% more rapid improvement than in the reference case

SOURCE: EIA (2006d).



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