EIA publishes AEO2014 reference case

The U.S. Energy Information Administration has published the early release of its Annual Energy Outlook 2014 (AEO2014), increasing its projections for biomass energy and other renewables. The analysis also predicts increased consumption of biofuels through 2022.

Within the report, the EIA notes that the early release is an abridged version of the AEO2014 that highlights changes in the AEO reference case relative to the AEO2013. The early release includes data for the reference case only; the full AEO2014 report is scheduled for release in the spring.

The EIA also stresses that the reference case results should not be viewed in isolation, as the reference case generally assumes that current laws and regulation affecting the energy sector remain unchanged throughout the projection—in this case through 2040. It also assumes that current laws that include sunset dates do, in fact, expire on those dates. However, in reality, many tax credits are granted extensions. The full AEO2014 will include additional cases and scenarios that investigate the outcomes of likely changes in policy and other factors.

According to the AEO2014 reference case, domestic energy production is expected to increase from 79.1 quadrillion Btu in 2012 to 102.1 quadrillion Btu in 2040, while net use of imported energy sources falls from 16 percent of total consumption in 2012 to 4 percent in 2040. The AEO2013 reference case predicted that domestic energy production would reach 98.5 quadrillion Btu with energy imports calling to 9 percent in 2040. According to the EIA, the larger increase in domestic energy production in the AEO2014 is a result of higher projections for the production of natural gas, biomass and other renewables.

The report revises the production outlook for nonpetroleum other liquids to levels lower than predicted last year. The category includes gas-to-liquids-, coal-to-liquids, biomass-to-liquids, and pyrolysis. According to the EIA, more recent experience with these emerging technologies has indicated higher costs than previously assumed.

Regarding transportation fuels, the AEO2014 reference case predicts total U.S. consumption of petroleum and other liquids will increase from 35.9 quadrillion Btu in 2012 to 36.9 quadrillion Btu in 2018, and then decline to 35.4 quadrillion Btu in 2034. That consumption level is expected to remain relatively flat through 2040. Total consumption of domestically produced biofuels is shown to increase slightly through 2022, and then remain relatively flat. With the production tax credit for cellulosic biofuels currently scheduled to expire at the end of 2013, the EIA predicts that production of cellulosic biofuels remains below statuary targets through 2040.

The reference case also indicates that the consumption of marketed renewable fuels will grow by 1.4 percent per year. Marketed renewable energy includes wood, municipal waste, other biomass, and hydroelectricity in the end-use sectors. It also includes hydroelectricity, geothermal, municipal solid waste, biomass, solar, and wind power in the electric power sector, along with ethanol and biomass-based diesel in the transportation sector. According to the EIA, excluding hydroelectricity, renewable energy consumption in the electric power sector is expected to grow from 1.9 quadrillion Btu in 2012 to 4.5 quadrillion Btu in 2040. Biomass is projected to account for 27 percent of that growth.

A full copy of the AEO2014 reference case can be downloaded from the EIA website.