The US Energy Information Administration (EIA) has released the Annual Energy Outlook 2014 (AEO2014). The AEO2014 Reference case was updated from the AEO2013 Reference case released in December 2012 in order to reflect new legislation enacted since that time and incorporate modeling changes.
Major changes include:
- Revised US Census Bureau population projections. The population for 2040 in the AEO2014 is almost 6% below the 2040 project used in the AEO2013 Reference case.
Residential, commercial and industrial
- Revised outlook for industrial production to reflect the effects of increased shale gas production and lower natural gas prices, resulting in faster growth for industrial production and energy consumption.
- Revised commercial capacity factors governing annual usage of major end use equipment, based on EIA-contracted analysis.
- Updated manufacturing sector data to reflect the 2010 Manufacturing Energy Consumption Survey (MECS).
Oil and natural gas production and product markets
- Revised network pricing assumptions based on benchmarking of regional natural gas hub prices to historical spot natural gas prices, using flow decisions based on spot prices, setting variable tariffs based on historical spot natural gas price differentials, and estimating the price of natural gas to the electric power sector off a netback from the regional hub prices.
- Allowed secondary flows of natural gas out of the Middle Atlantic region to change dynamically in the model based on relative prices, which enables a larger volume of natural gas from the Middle Atlantic’s Marcellus shale formation to supply neighbouring regions.
- Developed the estimated ultimate recovery of tight oil and shale gas on the basis of county level data.
- Updated oil and gas supply module that reports explicitly the technically recoverable resources of liquids in natural gas, enabling estimation of dry and wet natural gas.
- Improved representation of the dynamics of US gasoline and diesel exports versus US demand, through adoption of endogenous modeling.
- Added representation of the US crude oil distribution system (pipelines, marine and rail) to allow crude oil imports to go to logical import regions for transport to refineries.
- Revised production outlook for non-petroleum other liquids, with lower production levels than in AEO2013, as more recent experience indicates higher costs than previously assumed.
- Revised representation of CO2-enhanced oil recovery (EOR) that better integrates the electricity, oil and gas supply, and refining modules.
- Implementation of a new approach to vehicle miles travelled (VMT) projections for light duty vehicles (LDVs), based on an analysis of VMT by age group and the ageing of the driving population over the course of the projection. Demographic trends combine with employment and income factors to produce a 30% increase in VMT from 2012 to 2040 in AEO2014, compared with 41% growth in AEO2013.
- Added LNG as a potential fuel choice for freight rail locomotives and domestic marine vessels, resulting in significant penetration of natural gas as a fuel or freight rail (35% of freight rail energy consumption in 2040) but relatively minor penetration in domestic marine vessels (2% of domestic marine energy consumption in 2040).
- Adoption of a new approach for estimating freight travel demand by region and commodity for heavy duty vehicles (HDVs), rail, and domestic marine vessels, as well as updated fuel efficiencies for freight rail and domestic marine vessels.
- Updated handling of flex-fuel vehicle (FFC) fuel shares to better reflect consumer preferences and industry response. FFVs are necessary in order to meet the Renewable Fuels Standard (RFS), but the phaseout of corporate average fuel economy (CAFE) credits for their sale, as well as limited demand from consumers, reduces their market penetration.
Adapted from a press release by Emma McAleavey.
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