Notes and Sources

Market Trends

[101] Energy-intensive industries include food, paper, bulk chemicals, petroleum refining, glass, cement, steel, and aluminum.

[102] The reference case represents EIA’s current judgment regarding Organization of Petroleum Exporting Countries’ (OPEC) expected behavior in the mid-term where production is adjusted to keep world oil prices in the $22 to $28 per barrel range. Since OPEC, particularly the Persian Gulf nations, is expected to be the dominant supplier of oil in the international market over the mid-term, the organization’s production choices will significantly affect world oil prices. The low oil price scenario could result from a future market where all oil production becomes more competitive. The high price scenario could result from a more cohesive and market-assertive OPEC with lower production goals and other non-financial (geopolitical) considerations.

[103] The transportation sector has been left out of these calculations because levels of transportation sector electricity use have historically been far less than 1 percent of delivered electricity. In the transportation sector, the difference between total and delivered energy consumption is also less than 1 percent.

[104] The definition of the commercial sector for AEO2004 is based on data from the 1999 Commercial Buildings Energy Consumption Survey (CBECS). See Energy Information Administration, 1999 CBECS Public Use Data Files (October 2002), web site www.eia.doe.gov/ emeu/cbecs/. Nonsampling and sampling errors (found in any statistical sample survey) resulted in a higher commercial floorspace estimate than found with the 1995 CBECS. In addition, 1999 CBECS energy intensities varied from earlier estimates, providing a different composition of end-use consumption. These factors contribute to the pattern of commercial energy use projected for AEO2004. Further discussion is provided in Appendix G.

[105] The intensities shown were disaggregated using the divisia index. The divisia index is a weighted sum of growth rates and is separated into a sectoral shift or “output” effect and an energy efficiency or “substitution” effect. It has at least two properties that make it superior to other indexes. First, it is not sensitive to where in the time period or in which direction the index is computed. Second, when the effects are separated, the individual components have the same magnitude, regardless of which is calculated first. See Energy Information Administration, “Structural Shift and Aggregate Energy Efficiency in Manufacturing” (unpublished working paper in support of the National Energy Strategy, May 1990); and Boyd et al., “Separating the Changing Effects of U.S. Manufacturing Production from Energy Efficiency Improvements,” Energy Journal, Vol. 8, No. 2 (1987).

[106] Estimated as consumption of alternative transportation fuels in crude oil Btu equivalence. Alternative fuels include ethanol, electricity, hydrogen, natural gas, and propane.

[107] Federal Register, Volume 68, No. 66, Monday, April 7, 2003, pp.16868-16900.

[108] Small light trucks (compact pickup trucks and compact vans) are used primarily as passenger vehicles, whereas medium light trucks (compact utility trucks and standard vans) and large light trucks (standard utility trucks and standard pickup trucks) are used more heavily for commercial purposes.

[109] U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Scenarios of U.S. Carbon Reductions: Potential Impacts of Energy Technologies by 2010 and Beyond, ORNL/CON-444 (Washington, DC, September 1997); J. DeCicco et al, Technical Options for Improving the Fuel Economy of U.S. Cars and Light Trucks by 2010-2015 (Washington, DC: American Council for an Energy Efficient Economy, April 2001); M.A. Weiss et al, On the Road in 2020: A Life-Cycle Analysis of New Automotive Technologies (Cambridge, MA: Massachusetts Institute of Technology, October 2000); A. Vyas, C. Saricks, and F. Stodolsky, Projected Effect of Future Energy Efficiency and Emissions Improving Technologies on Fuel Consumption of Heavy Trucks (Argonne, IL: Argonne National Laboratory, 2001); and Energy and Environmental Analysis, Inc., Documentation of Technologies included in the NEMS Fuel Economy Model for Passenger Cars and Light Trucks (prepared for Energy Information Administration, September 30, 2002).

[110] Values for incremental investments and energy expenditure savings are discounted back to 2003 at a 7-percent real discount rate.

[111] Unless otherwise noted, the term “capacity” in the discussion of electricity generation indicates utility, nonutility, and combined heat and power capacity. The costs reflect the arithmetic average of the regional cost.

[112] AEO2004 does not include off-grid photovoltaics (PV). Based on annual PV shipments from 1989 through 2001, EIA estimates that as much as 112 megawatts of remote electricity generation PV applications (i.e., off-grid power systems) were in service in 2001, plus an additional 305 megawatts in communications, transportation, and assorted other non-grid-connected, specialized applications. See Annual Energy Review 2002, Table 10.6 (annual PV shipments, 1989-2001). The approach used to develop the estimate, based on shipment data, provides an upper estimate of the size of the PV stock, including both grid-based and off-grid PV. It will overestimate the size of the stock, because shipments include a substantial number of units that are exported, and each year some of the PV units installed earlier will be retired from service or abandoned.

[113] Hydroelectric and landfill gas assumptions are unchanged from the reference case. Assumptions are obtained or derived from the Electric Power Research Institute and DOE, Office of Energy Efficiency and Renewable Energy, Renewable Energy Technology Characterizations, EPRI-TR-109496 (Washington, DC, December 1997), web site www.eren.doe.gov/power/ techchar.html.

[114] Based on technology characterizations found in the National Renewable Energy Laboratory 2003 Power Technologies Databook. See web site www.nrel.gov/ analysis/power_databook/. Cost and performance projections in the Databook are sourced to U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy publications and documents.

[115] Associated-dissolved natural gas is produced in conjunction with crude oil. Nonassociated gas is produced without crude oil production.

[116] Unconventional gas includes tight (low permeability), sandstone gas, shale gas, and coalbed methane.

[117] Gas exports from the United States to Mexico continue to exceed imports from Mexico through the end of the projections.

[118] Variations in mining costs are not necessarily limited to changes in labor productivity and wage rates. Other factors that affect mining costs and, subsequently, the price of coal include such items as severance taxes, royalties, fuel costs, and the costs of parts and supplies.

[119 ] U.S. Environmental Protection Agency, web site www.epa.gov/airmarkets/arp/overview.html (October 25, 2002).

[120] Buildings: Energy Information Administration (EIA), Technology Forecast Updates—Residential and Commercial Building Technologies—Advanced Adoption Case (Arthur D. Little, Inc., October 2001). Industrial: EIA, Industrial Model: Update on Energy Use and Industrial Characteristics (Arthur D. Little, Inc., September 2001). Transportation: U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Scenarios of U.S. Carbon Reductions: Potential Impacts of Energy Technologies by 2010 and Beyond, ORNL/CON-444 (Washington, DC, September 1997); J. DeCicco and M. Ross, An Updated Assessment of the Near-Term Potential for Improving Automotive Fuel Economy (Washington, DC: American Council for an Energy-Efficient Economy, November 1993); and A. Vyas, C. Saricks, and F. Stodolsky, Projected Effect of Future Energy Efficiency and Emissions Improving Technologies on Fuel Consumption of Heavy Trucks (Argonne, IL: Argonne National Laboratory, 2001). Fossil-fired generating technologies: U.S. Department of Energy, Office of Fossil Energy. Renewable generating technologies: U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, and Electric Power Research Institute, Renewable Energy Technology Characterizations, EPRI-TR-109496 (Washington, DC, December 1997).

Table Notes

Table 20. New car and light truck horsepower ratings and market shares, 1990-2025: History: U.S. Environmental Protection Agency, Office of Transportation and Air Quality, Light-Duty Automotive Technology And Fuel Economy Trends: 1975-2003, EPA-420-S-03-004, April 2003. Projections: AEO2004 National Energy Modeling System, run AEO2004.D101703E.

Table 21. Costs of producing electricity from new plants, 2010 and 2025: AEO2004 National Energy Modeling System, run AEO2004.D101703E.

Table 22. Technically recoverable U.S. natural gas resources as of January 1, 2002: Energy Information Administration, Office of Integrated Analysis and Forecasting.

Table 23. Onshore and offshore lower 48 crude oil production in three cases, 2025: AEO2004 National Energy Modeling System, runs AEO2004.D101703E, LW2004. D101703B, and HW2004.D101703B.

Table 24. Technically recoverable U.S. oil resources as of January 1, 2002: Energy Information Administration, Office of Integrated Analysis and Forecasting.

Table 25. Crude oil production from Gulf of Mexico offshore, 2002-2025: AEO2004 National Energy Modeling System, run AEO2004.D101703E.

Table 26. Petroleum consumption and net imports in five cases, 2002 and 2025: 2002: Energy Information Administration, Petroleum Supply Annual 2001, Vol. 1, DOE/EIA-0340(2001)/1 (Washington, DC, June 2001). 2025: Tables A11, B11, and C11.

Released: January 2004