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Report
#:DOE/EIA-0383(2003) Released January 9, 2003 (Next Release: January 2004) Projection
and Year by Year Tables Previous
Annual Energy Outlooks |
Annual Energy Outlook 2003 with Projections to 2025 Market Trends - Carbon Dioxide Emissions Carbon Dioxide Emissions | Carbon Dioxide and Methane Emissions | Emissions from Electricity Generation Higher Energy Consumption Forecast Increases Carbon Dioxide Emissions Carbon dioxide emissions from energy use are projected to increase on average by 1.5 percent per year from 2001 to 2025, to 2,237 million metric tons carbon equivalent (Figure 112), and emissions per capita are projected to grow by 0.7 percent per year. Carbon dioxide emissions in the residential sector, including emissions from the generation of electricity used in the sector, are projected to increase by an average of 1.0 percent per year, reflecting increased electrification and penetration of computers, electronics, and appliances in the sector. Significant growth in office equipment and computers, as well as floorspace, is also projected for the commercial sector. As a result, carbon dioxide emissions from the commercial sector are projected to increase by 1.6 percent per year. Industrial emissions are projected to grow by 1.1 percent per year, as shifts to less energy-intensive industries and efficiency gains help to moderate growth in energy use. In the transportation sector, carbon dioxide emissions grow at an average annual rate of 2.0 percent. Increases in highway, rail, and air travel are partially offset by efficiency improvements in rail freight and aircraft, but passenger vehicle fuel economy is projected to increase only slightly above 2001 levels. In all sectors, potential growth in carbon dioxide emissions is expected to be moderated by efficiency standards, voluntary efficiency programs, and improvements in technology. Carbon dioxide mitigation programs, further improvements in technology, or more rapid adoption of voluntary programs could result in lower emissions levels than projected here. Petroleum Products Lead Carbon Dioxide Emissions From Energy Use Petroleum products are the leading source of carbon dioxide emissions from energy use. In 2025, petroleum is projected to account for 971 million metric tons carbon equivalent, a 43-percent share of the projected total. About 84 percent (811 million metric tons carbon equivalent) of the emissions from petroleum use are expected to result from transportation fuel use. Coal is the second leading source of carbon dioxide emissions, projected to produce 753 million metric tons carbon equivalent in 2025, or 34 percent of the total. The coal share is projected to decline from 36 percent in 2001, because coal consumption is expected to increase at a slower rate through 2025 than consumption of petroleum and natural gas. Most of the increases in emissions from coal use result from electricity generation. In 2025, natural gas use is projected to produce a 23-percent share of total carbon dioxide emissions, 512 million metric tons carbon equivalent. Of the fossil fuels, natural gas consumption and emissions increase most rapidly through 2025, at an average annual rate of 1.9 percent. Because carbon dioxide emissions from natural gas combustion, per Btu of energy produced, are only 56 percent of those from coal combustion, carbon intensity is reduced as natural gas replaces coal. As the economy becomes more energy-efficient, its carbon intensity also declines. Between 2001 and 2025, the carbon intensity of the economy is expected to decline at an average rate of 1.5 percent per year (Figure 113). Electricity Generation Is Also a Major Cause of Carbon Dioxide Emissions The use of fossil fuels in the electric power industry accounted for 39 percent of total energy-related carbon dioxide emissions in 2001, and the share is projected to be 38 percent in 2025. Coal is projected to account for 50 percent of the power industry’s electricity generation in 2025 and to produce 81 percent of electricity-related carbon dioxide emissions (Figure 114). In 2025, natural gas is projected to account for 27 percent of electricity generation but only 18 percent of electricity-related carbon dioxide emissions. Between 2001 and 2025, the electric power industry is projected to retire 82 gigawatts of generating capacity—about 10 percent of the 2001 level—and to see a 54-percent increase in electricity sales. As a result, the industry is projected to add 414 gigawatts of new fossil-fueled capacity by 2025. Although most of the new plants are expected to be relatively efficient combined-cycle plants fueled by natural gas, the net effect will be to raise the industry’s carbon dioxide emissions by 248 million metric tons carbon equivalent, or 41 percent, from 2001 levels. The electric power industry is projected to increase its reliance on renewable energy, which generally does not contribute to carbon dioxide emissions. Renewable generation is expected to increase by 170 billion kilowatthours, or 65 percent, between 2001 and 2025, helping to offset the projected increase in carbon dioxide emissions from fossil fuels. Average carbon dioxide emissions per kilowatthour of total generation are projected to decline by about 9 percent from 2001 to 2025. Emissions Projections Change With Economic Growth Assumptions The high economic growth case assumes higher growth in population, labor force, and productivity than in the reference case, leading to higher industrial output, lower inflation, and lower interest rates. GDP growth in the high growth case averages 3.5 percent per year from 2001 to 2025, as compared with 3.0 percent per year in the reference case. In the low economic growth case, which assumes lower growth in population, labor force, and productivity, GDP growth averages 2.5 percent per year. Higher projections for manufacturing output and income increase the demand for energy services in the high economic growth case, and energy consumption totals 149 quadrillion Btu in 2025, 7 percent higher than in the reference case. As a result, carbon dioxide emissions are projected to reach 2,401 million metric tons carbon equivalent in 2025, also 7 percent higher than in the reference case (Figure 115). Total energy intensity, measured as primary energy consumption per dollar of GDP, declines by 1.7 percent per year in the high growth case, as compared with 1.5 percent in the reference case. With more rapid projected growth in energy consumption, there is expected to be a greater opportunity to turn over the stock of energy-using technologies, adding new equipment and increasing the overall efficiency of the capital stock. In the low growth case, energy consumption reaches 129 quadrillion Btu in 2025, 7 percent lower than projected in the reference case, and carbon dioxide emissions in 2025 are also 7 percent lower at 2,083 million metric tons carbon equivalent. Energy intensity is projected to decline at a rate of 1.3 percent annually through 2025 in the low growth case. Carbon Dioxide and Methane Emissions Technology Advances Could Reduce Carbon Dioxide Emissions The reference case assumes continuing improvement in energy-consuming and producing technologies, consistent with historic trends, as a result of ongoing research and development. In the high technology case it is assumed that increased spending on research and development will result in earlier introduction, lower costs, and higher efficiencies for end-use technologies than assumed in the reference case. The costs and efficiencies of advanced fossil-fired and new renewable generating technologies are also assumed to improve from reference case values [52]. Energy intensity is expected to decline on average by 1.8 percent per year through 2025 in the high technology case, as compared with 1.5 percent in the reference case. As a result, energy consumption is projected to be 6 percent lower than in the reference case in 2025, at 130 quadrillion Btu, and carbon dioxide emissions are projected to be 9 percent lower than in the reference case, at 2,046 million metric tons carbon equivalent (Figure 116). The 2003 technology case assumes that future equipment choices will be made from the equipment and vehicles available in 2003; that new building shell and plant efficiencies will remain at their 2003 levels; and that advanced generating technologies will not improve over time. Energy efficiency improves in the 2003 technology case as new equipment is chosen to replace older stock and the capital stock expands, and energy intensity declines by 1.3 percent per year through 2025. Energy consumption reaches 147 quadrillion Btu in 2025 in the 2003 technology case, and carbon dioxide emissions in 2025 are projected to be 9 percent higher than in the reference case, at 2,429 million metric tons carbon equivalent. Moderate Growth in Methane Emissions Is Expected Methane emissions from energy use are projected to increase at an average rate of 1.0 percent per year from 2001 to 2025, somewhat slower than the 1.5-percent projected growth rate for carbon dioxide emissions. Based on global warming potential, methane is the second largest component of U.S. man-made greenhouse gas emissions after carbon dioxide, and it is one of the six gases covered by the Kyoto Protocol. In 2001, methane accounted for 9.5 percent of total U.S. greenhouse gas emissions of 1,887 million metric tons carbon equivalent. About a third of methane emissions are related to energy activities, mostly from energy production and its transportation and to a much smaller extent from incomplete fuel combustion. Other sources of methane emissions include waste management, agriculture, and industrial processes. Much of the projected increase in energy-related methane emissions is tied to increases in oil and gas use (Figure 117). The fugitive methane emissions that occur during natural gas production, processing, and distribution are expected to increase by 35 percent by 2025, despite declines in the average rate of emissions per unit of production. Emissions related to oil production, refining, and transport are also expected to increase by about the same proportion. Coal-related methane emissions are expected to increase slowly, with little change projected in coal production from methane-intensive underground mining while progress in the recovery of vented gas continues. Methane emissions related to wood and fossil fuel combustion are projected to remain a small share of the total (6 percent) through 2025. Emissions from Electricity Generation Sulfur Emissions Are Cut in Response to Tightening Regulations CAAA90 called for annual emissions of sulfur dioxide (SO2) by electricity generators to be reduced to approximately 12 million tons in 1996, 9.48 million tons between 2000 and 2009, and 8.95 million tons per year thereafter. Because companies can bank allowances for future use, however, the long-term cap of 8.95 million tons per year is not expected to be reached until after 2011. More than 95 percent of the SO2 produced by generators results from coal combustion and the rest from residual oil. CAAA90 called for the reductions to occur in two phases, with larger (more than 100 megawatts) and higher emitting (more than 2.5 pounds per million Btu) plants making reductions first. In Phase 1, which began in 1995, 261 generating units at 110 plants were issued tradable emissions allowances permitting SO2 emissions to reach a fixed amount per year—generally less than the plant’s historical emissions. Allowances could also be banked for use in future years. Switching to lower sulfur subbituminous coal was the option chosen by most generators, as only about 12 gigawatts of capacity had been retrofitted with scrubbers by 1995. In recent years, power companies have announced plans to add scrubbers to 23 gigawatts of capacity to comply with State or Federal initiatives. No additional SO2 scrubbers are projected to be added beyond those that have been announced. Emissions are projected to decline from 10.6 million tons in 2001 to 8.9 million in 2025 (Figure 118). The price of allowances is projected to vary between about $100 and $190 between 2002 and 2020 before declining through 2025. Nitrogen Oxide Emissions Are Projected To Stay Below 2000 Levels Nitrogen oxide (NOx) emissions from U.S. electricity generation are projected to fall as new regulations take effect (Figure 119). The required reductions are intended to reduce the formation of ground-level ozone, for which NOx emissions are a major precursor. Together with volatile organic compounds and hot weather, NOx emissions contribute to unhealthy air quality in many areas during the summer months. CAAA90 NOx reduction program called for reductions at electric power plants in two phases, the first in 1995 and the second in 2000. The second phase of CAAA90 resulted in NOx reductions of 0.6 million tons between 1999 and 2000. For several years the EPA and the States have studied the movement of ozone from State to State. The States in the Northeast have argued that emissions from coal plants in the Midwest make it difficult for them to meet national air quality standards for ground-level ozone, and they have petitioned the EPA to force the coal plant operators to reduce their emissions more than required under current rules. Interpretations of ozone transport studies have been controversial. In September 1998 the EPA issued a rule, referred to as the Ozone Transport Rule (OTR), to address the problem. The OTR called for capping NOx emissions in 22 Midwestern and Eastern States during the summer season, and following a court challenge, emissions limits were finalized for 19 States. These limits, which are included in the projections beginning in 2004, are projected to stimulate the addition of emissions control equipment to many existing plants, further lowering NOx emissions by 0.5 million tons between 2003 and 2004. |