Introduction
In preparing the Annual Energy Outlook 2015 (AEO2015)—a shorter edition; see "Changes in release cycle for EIA's Annual Energy Outlook"—the U.S. Energy Information Administration (EIA) evaluated a range of trends and issues that could have major implications for U.S. energy markets. This report presents the AEO2015 Reference case and compares it with five alternative cases (Low and High Oil Price, Low and High Economic Growth, and High Oil and Gas Resource) that were completed as part of AEO2015 (see Appendixes A, B, C, and D).
Because of the uncertainties inherent in any energy market projection, the Reference case results should not be viewed in isolation. Readers are encouraged to review the alternative cases to gain perspective on how variations in key assumptions can lead to different outlooks for energy markets. In addition to the alternative cases prepared for AEO2015, EIA has examined many proposed policies affecting energy markets over the past few years. Reports describing the results of those analyses are available on EIA's website.[12]
Table 1 provides a summary of the six cases produced as part of AEO2015. For each case, the table gives the name used in AEO2015 and a brief description of the major assumptions underlying the projections. Regional results and other details of the projections are available at http://www.eia.gov/outlooks/aeo/tables_ref.cfm#supplement.
| Case name | Description |
|---|---|
| Reference | Real gross domestic product (GDP) grows at an average annual rate of 2.4% from 2013 to 2040, under the assumption that current laws and regulations remain generally unchanged throughout the projection period. North Sea Brent crude oil prices rise to $141/barrel (bbl) (2013 dollars) in 2040. Complete projection tables are provided in Appendix A. |
| Low Economic Growth | Real GDP grows at an average annual rate of 1.8% from 2013 to 2040. Other energy market assumptions are the same as in the Reference case. Partial projection tables are provided in Appendix B. |
| High Economic Growth | Real GDP grows at an average annual rate of 2.9% from 2013 to 2040. Other energy market assumptions are the same as in the Reference case. Partial projection tables are provided in Appendix B. |
| Low Oil Price | Low oil prices result from a combination of low demand for petroleum and other liquids in nations outside the Organization for Economic Cooperation and Development (non-OECD nations) and higher global supply. On the supply side, the Organization of Petroleum Exporting Countries (OPEC) increases its liquids market share from 40% in 2013 to 51% in 2040, and the costs of other liquids production technologies are lower than in the Reference case. Light, sweet (Brent) crude oil prices remain around $52/bbl (2013 dollars) through 2017, and then rise slowly to $76/bbl in 2040. Other energy market assumptions are the same as in the Reference case. Partial projection tables are provided in Appendix C. |
| High Oil Price | High oil prices result from a combination of higher demand for liquid fuels in non-OECD nations and lower global crude oil supply. OPEC’s liquids market share averages 32% throughout the projection. Non-OPEC crude oil production expands more slowly in short- to mid-term relative to the Reference case. Brent crude oil prices rise to $252/bbl (2013 dollars) in 2040. Other energy market assumptions are the same as in the Reference case. Partial projection tables are provided in Appendix C. |
| High Oil and Gas Resource | Estimated ultimate recovery (EUR) per shale gas, tight gas, and tight oil well is 50% higher and well spacing is 50% closer (i.e., the number of wells drilled is 100% higher) than in the Reference case. In addition, tight oil resources are added to reflect new plays or the expansion of known tight oil plays, and the EUR for tight and shale wells increases by 1%/year more than the annual increase in the Reference case to reflect additional technology improvements. This case also includes kerogen development; undiscovered resources in the offshore Lower 48 states and Alaska; and coalbed methane and shale gas resources in Canada that are 50% higher than in the Reference case. Other energy market assumptions are the same as in the Reference case. Partial projection tables are provided in Appendix D. |
| Source: U.S. Energy Information Administration. | |
Changes in release cycle for EIA’s Annual Energy Outlook
To focus more resources on rapidly changing energy markets and the ways in which they might evolve over the next few years, the U.S. Energy Information Administration (EIA) is revising the schedule and approach for production of the Annual Energy Outlook (AEO). Starting with this Annual Energy Outlook 2015 (AEO2015), EIA is adopting a two-year release cycle for the AEO, with full and shorter editions of the AEO produced in alternating years. AEO2015 is a shorter edition of the AEO.
The shorter AEO includes a limited number of model updates, which are selected predominantly to reflect historical data updates and changes in legislation and regulations. A complete listing of the changes made for AEO2015 is shown in Appendix E. The shorter edition includes a Reference case and five alternative cases: Low Oil Price, High Oil Price, Low Economic Growth, High Economic Growth, and High Oil and Gas Resource.
The shorter AEO will include this publication, which discusses the Reference case and alternative cases, as well as the report, Assumptions to the Annual Energy Outlook 2015.[13] Other documentation—including model documentation for each of the National Energy Modeling System (NEMS) models and the Retrospective Review—will be completed only for the years when a full edition of the AEO is produced.
To provide a basis against which alternative cases and policies can be compared, the AEO Reference case generally assumes that current laws and regulations affecting the energy sector remain unchanged throughout the projection (including the assumption that laws that include sunset dates do, in fact, expire at the time of those sunset dates). This assumption enables policy analysis with less uncertainty regarding unstated legal or regulatory assumptions.
Endnotes
- See “Congressional and other requests,” http://www.eia.gov/analysis/reports.cfm?t=138.
- U.S. Energy Information Administration, Assumptions to the Annual Energy Outlook 2015, DOE/EIA-0554(2015) (Washington, DC, to be published), http://www.eia.gov/outlooks/aeo/assumptions.