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EIA announces release of updated scenarios as part of its Annual Energy Outlook 2010. Report provides sensitivity cases showing different assumptions regarding market and policy drivers.

The U.S. Energy Information Administration (EIA) released the complete version of the Annual Energy Outlook 2010 (AEO2010) yesterday, which includes 38 sensitivity cases that show how different assumptions regarding market and policy drivers affect the Reference case projections that EIA previously released in December, 2009.

Key results highlighted in AEO2010 include moderate growth in energy consumption, increased use of renewables, declining reliance on imported liquid fuels, strong growth in shale gas production, and projected slow growth in energy-related carbon dioxide (CO2) emissions in the absence of new policies designed to mitigate greenhouse gas (GHG) emissions of the energy consumed in the United States over the next 25 years in the Reference case, their share of overall energy use falls from 84 percent in 2008 to 78 percent in 2035.

The AEO2010 Reference case does not include potential future policies that have not yet become law and assumes that existing laws expire as currently specified. Some laws, however, have a history of being extended or periodically updated.

In addition to considering alternative scenarios for oil prices, economic growth, and the uptake of more energy-efficient technologies, the AEO2010 includes cases that examine the impact of changes in selected policies, such as the extension of existing policies that are currently scheduled to sunset. The AEO2010 No Sunset case and Extended Policies case examine the impacts of extending and updating various policies. As one might assume, projected energy use in both these cases is below the Reference case level. These scenarios also show increased utilization of biomass for power and fuel. Additionally, by 2035, projected energy-related carbon dioxide emissions are 2.3 percent lower in the No Sunset case and 3.2 percent lower in the Extended Polices case than in the Reference case.

The “No Sunset” case continues current tax credits for renewable power, building efficiency, industrial combined heat and power, and biofuels, and it anticipates further increases in the Renewable Fuel Standard (RFS) after 2022. In this scenario, the growth in energy use is nearly the same as in the reference case, but the shift to cleaner energy sources cuts energy-related carbon dioxide emissions by 2.3%.

According to EIA Administrator Richard Newell, the AEO2010 sensitivity cases show:

Variations in assumptions regarding key market or policy drivers can have a significant impact on projected energy market trends. Understanding these potential alternate energy futures can inform individuals, businesses, and policy makers as they make decisions today.

The projected level of total U.S. energy use depends significantly on the rate of economic growth, which is assumed to be 2.4 percent annually from 2008 to 2035 in the AEO2010 Reference case. Annual average economic growth rates of 1.8 percent in the Low Economic Growth case and 3.0 percent in the High Economic Growth case, correspond to projections of energy use in 2035 ranging from about 104 to 127 quadrillion Btu, increases of between 0.1 percent to 0.9 percent annually. Changes in the size of the economy lead to less than proportional changes in projected U.S. energy use because improvements in energy intensity vary with rates of economic growth.

The AEO2010 Reference case does not include potential future policies that have not yet become law and assumes that existing laws expire as currently specified. Some laws, however, have a history of being extended or periodically updated. The AEO2010 No Sunset case and Extended Policies case examine the impacts of extending and updating various policies. Projected energy use in both these cases is below the Reference case level. By 2035, projected energy-related carbon dioxide emissions are 2.3 percent lower in the No Sunset case and 3.2 percent lower in the Extended Polices case than in the Reference case (Figure 2).

More information on the EIA Energy Outlook Report.