Delivered energy consumption by sector

Transportation

Energy consumption in the transportation sector declines in the AEO2015 Reference case from 27.0 quadrillion Btu (13.8 million bbl/d) in 2013 to 26.4 quadrillion Btu (13.5 million bbl/d) in 2040. Energy consumption falls most rapidly through 2030, primarily as a result of improvement in light-duty vehicle (LDV) fuel economy with the implementation of corporate average fuel economy (CAFE) standards and greenhouse gas emissions (GHG) standards (Figure 10). This projection is a significant departure from the historical trend. Transportation energy consumption grew by an average of 1.3%/year from 1973 to 2007—when it peaked at 28.7 quadrillion Btu—as a result of increases in demand for personal travel and movement of goods that outstripped gains in fuel efficiency.

tu).

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Transportation sector energy consumption varies across the alternative cases (Figure 11). Compared with the Reference case, energy consumption levels in 2040 are higher in the High Economic Growth case (by 3.0 quadrillion Btu), Low Oil Price case (by 1.4 quadrillion Btu), and High Oil and Gas Resource case (by 1.2 quadrillion Btu) and lower in the High Oil Price case (by 1.4 quadrillion Btu) and Low Economic Growth case (by 2.6 quadrillion Btu).

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In the Reference case, energy consumption by LDVs—including passenger cars, light-duty trucks, and commercial light-duty trucks—falls from 15.7 quadrillion Btu in 2013 to 12.6 quadrillion Btu in 2040, as increases in fuel economy more than offset increases in LDV travel. Total vehicle miles traveled (VMT) for LDVs increase by 36% from 2013 (2,711 billion miles) to 2040 (3,675 billion miles), and the average VMT per licensed driver increase from about 12,200 miles in 2013 to 13,300 miles in 2040. The fuel economy of new vehicles increases from 32.8 mpg in 2013 to 48.1 mpg in 2040, as more stringent CAFE and GHG emissions standards take effect. As a result, the average fuel economy of the LDV stock increases by 69%, from 21.9 mpg in 2013 to 37.0 mpg in 2040.

Passenger vehicles fueled exclusively by motor gasoline for all motive and accessory power, excluding any hybridization and flex-fuel capabilities, accounted for 83% of new sales in 2013. In the AEO2015 Reference case, gasoline-only vehicles, excluding hybridization or flex-fuel capabilities, still represent the largest share of new sales in 2040, at 46% of the total (see box below for comparison of relative economics of various vehicle technologies). However, alternative fuel vehicles and vehicles with hybrid technologies gain significant market shares, including gasoline vehicles equipped with micro hybrid systems (33%), E85 flex-fuel vehicles (10%), full hybrid electric vehicles (5%), diesel vehicles (4%), and plug-in hybrid vehicles and electric vehicles (2%). (EIA considers several types of hybrid electric vehicles—micro, mild, full, and plug-in—as described in "Future gasoline vehicles are strong competitors when compared with other vehicle technology types on the basis of fuel economics".)

In comparison with the Reference case, LDV energy consumption in 2040 is higher in the Low Oil Price case (14.3 quadrillion Btu), High Economic Growth case (13.2 quadrillion Btu), and High Oil and Gas Resource case (12.9 quadrillion Btu), as a result of projected higher VMT in all three cases and lower fuel economy in the Low Oil Price and High Oil and Gas Resource cases. Conversely, LDV energy consumption in 2040 in the High Oil Price case (10.6 quadrillion Btu) and the Low Economic Growth case (11.3 quadrillion Btu) is lower than projected in the Reference case, as a result of lower VMT in both cases and higher fuel economy in the High Oil Price case.

Energy use by all heavy-duty vehicles (HDVs)—including tractor trailers, buses, vocational vehicles,[19] and heavy-duty pickups and vans—increases from 5.8 quadrillion Btu (2.8 million bbl/d) in 2013 to 7.3 quadrillion Btu (3.5 million bbl/d) in 2040, with higher VMT only partially offset by improved fuel economy. HDV travel grows by 48% in the Reference case—as a result of increases in industrial output—from 268 billion miles in 2013 to 397 billion miles in 2040, while average HDV fuel economy increases from 6.7 mpg in 2013 to 7.8 mpg in 2040 as a result of HDV fuel efficiency standards and GHG emissions standards. Diesel remains the most widely used HDV fuel. The share of diesel falls from 92% of total HDV energy use in 2013—with the remainder 7% motor gasoline and 1% gaseous (propane, natural gas, liquefied natural gas)—to 87% diesel in 2040, with natural gas, either compressed or liquefied, accounting for 7% of HDV energy use in 2040 as the economics of natural gas fuels improve and the refueling infrastructure expands.

The largest differences from the Reference case level of HDV energy consumption in 2040 are in the High and Low Economic Growth cases (9.4 quadrillion Btu and 6.3 quadrillion Btu, respectively), as a result of their higher and lower projections for travel demand, respectively. Notably, the use of natural gas is significantly higher in the High Oil Price case than in the Reference case, at nearly 30% of total HDV energy use in 2040.

Aircraft energy consumption increases from 2.3 quadrillion Btu in 2013 to 3.1 quadrillion Btu in 2040, with growth in personal air travel partially offset by gains in aircraft fuel efficiency. Energy consumption by marine vessels (including international marine, recreational boating, and domestic marine) remains flat, as increases in demand for international marine and recreational boating are offset by declines in fuel use for domestic marine vessels. The decline in domestic marine energy use is the result of improved efficiency and the continuation of the historical decline in travel demand. In the near term, distillate fuel provides a larger share of the fuel used by marine vessels, the result of stricter fuel and emissions standards. Pipeline energy use increases slowly, with growing volumes of natural gas produced from tight formations that are relatively close to end-use markets. Energy consumption for rail travel (freight and passenger) also remains flat, as improvement in locomotive fuel efficiency offsets growth in travel demand. In 2040, natural gas provides about a third of the fuel used for freight rail.

Industrial

Delivered energy consumption in the industrial sector totaled 24.5 quadrillion Btu in 2013, representing approximately 34% of total U.S. delivered energy consumption. In the AEO2015 Reference case, industrial delivered energy consumption grows at an annual rate of 0.7% from 2013 to 2040. The annual growth rate is much higher from 2013 to 2025 (1.3%) than from 2025 to 2040 (0.2%), as increased international competition slows industrial production growth and energy efficiency continues to improve in the industrial sector over the long term. Among the alternative cases, delivered industrial energy consumption grows most rapidly in the High Economic Growth case at 1.2%/year, almost twice the rate in the Reference case. The slowest growth in industrial energy consumption is projected in the Low Economic Growth case, at 0.4%/year from 2013 to 2040 (Figure 12).

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Total industrial natural gas consumption in the AEO2015 Reference case increases from 9.1 quadrillion Btu in 2013 to 11.2 quadrillion Btu in 2040. Natural gas is used in the industrial sector for heat and power, bulk chemical feedstocks, natural gas-toliquids (GTL) heat and power, and lease and plant fuel. The 6.7 quadrillion Btu of natural gas used for heat and power in 2013 was 74% of total industrial natural gas consumption for the year. From 2013 to 2040, natural gas use for heat and power grows by an average of 0.4%/year in the Reference case, with 41% of the total growth occurring between 2013 and 2020. In the High Oil and Gas Resource case, natural gas use for heat and power grows by 0.7%/year from 2013 to 2040, largely as a result of oil and gas extraction activity (Figure 13).

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Natural gas use for GTL is responsible for the rapid post-2025 consumption growth in the High Oil Price compared with the other two cases shown in Figure 13. In the High Oil Price case, natural gas use for heat and power increases by 1.0%/year from 2013 to 2040, including significant use for GTL production, which grows to about 1 quadrillion Btu in 2040 in the High Oil Price case. Natural gas use for GTL occurs only in the High Oil Price case. Market conditions (primarily liquid fuel prices) do not support GTL investments in the other cases.

Purchased electricity (excluding electricity generated and used onsite) used by industrial customers in the AEO2015 Reference case grows from 3.3 quadrillion Btu in 2013 to 4.1 quadrillion Btu in 2040. Most of the growth occurs between 2013 and 2025, when it averages 1.7%/year. After 2025, there is little growth in purchased electricity consumption in the Reference case. In the High Economic Growth case, purchased electricity consumption grows by 1.5%/year from 2013 to 2040, which is almost twice the rate in the Reference case. Consumption increases significantly from 2025 to 2040 in the High Economic Growth case, as shipments of industrial products increase relatively more than in the Reference case and do not slow down nearly as much after 2025.

Purchased electricity consumption in the five metal-based durables industries,[20] which accounted for nearly 25% of the industrial sector total in 2013, grows at a slightly higher rate than in other industries in the Reference case. Although metal-based durable industries are not energy-intensive, they are relatively electricity-intensive, and they are by far the largest industry subgroup as measured by shipments in 2013. In the High Economic Growth case, shipments of metal-based durables grow more rapidly than shipments from many of the other industry segments. As a result, purchased electricity consumption in the metal-based durables industries grows by 2.0% per year from 2013 to 2040 in the High Economic Growth case, which is higher than the rate of growth for the industry in the Reference case.

Combined heat and power (CHP) generation in the industrial sector—almost all of which occurs in the bulk chemicals, food, iron and steel, paper, and refining industries—grows by 50% from 147 billion kWh in 2013 to 221 billion kWh in 2040 in the AEO2015 Reference case. Most of the CHP generation uses natural gas, although the paper industry also has a significant amount of renewables-based generation. All of the CHP-intensive industries are also energy intensive. Growth in CHP generation is slightly higher than growth in purchased electricity consumption, despite a shift toward lower energy intensity in the manufacturing and service sectors in the United States.

Bulk chemicals are the most energy-intensive segment of the industrial sector. In the AEO2015 Reference case, energy consumption in the U.S. bulk chemicals industry, which totaled 5.6 quadrillion Btu in 2013, grows by an average of 2.3%/year from 2013 to 2025. After 2025, energy consumption growth in bulk chemicals is negligible, as U.S. shipments of bulk chemicals begin to decrease because of increased international competition.

Approximately 60% of energy use in the bulk chemicals industry over the projection period is for feedstocks. Hydrocarbon gas liquids (HGL)[21] and petroleum products (such as naphtha)[22] are used as feedstocks for organic chemicals, inorganic chemicals, and resins. Growth in natural gas production from shale formations has contributed to an increase in the supply of HGL. Some chemicals can use either HGL or petroleum as feedstock; for those chemicals, the feedstock used depends on the relative prices of natural gas and petroleum. Although HGL or petroleum is used as a feedstock for most chemicals, natural gas feedstocks are used to manufacture methanol and agricultural chemicals. Natural gas feedstock consumption, which constituted roughly 13% of total bulk chemical feedstock consumption in 2013, grows rapidly from 2014 to 2018, reflecting increased capacity in the U.S. agricultural chemicals industry.

Residential and commercial

Delivered energy consumption decreases at an average rate of 0.3%/year in the residential sector and grows by 0.6%/year in the commercial sector from 2013 through 2040 in the AEO2015 Reference case (Figure 14 and Figure 15). Over the same period, the total number of households grows by 0.8%/year, and commercial floorspace increases by 1.0%/year (Table 4). The AEO2015 alternative cases illustrate the effects of different assumptions on residential and commercial energy consumption. Higher or lower economic growth, fuel prices, and fuel resources yield a range of residential and commercial energy demand. Different levels of economic growth affect the number of households more than the amount of commercial floorspace, leading to greater differences in residential energy demand across the cases.

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Table 4. Residential households and commercial indicators in three AEO2015 cases, 2013 and 2040

Indicator	2013	2040	Aveerage annual growth rate, 2013-40 (percent per year)
Residential households (millions)
High Economic Growth	114.3	158.5	1.2
Reference	114.3	141.0	0.8
Low Economic Growth	114.3	127.9	0.4
Commercial floorspace (billion square feet)
High Economic Growth	82.8	112.4	1.1
Reference	82.8	109.1	1.0
Low Economic Growth	82.8	106.0	0.9
Source: AEO2015 National Energy Modeling System, runs REF2015.D021915A, LOWMACRO.D021915A, and HIGHMACRO.D021915A.

In the Reference case, electricity consumption in the residential and commercial sectors increases by 0.5%/year and 0.8%/year from 2013 through 2040, respectively, with the growth in residential electricity use ranging from 0.2%/year to 0.9%/year and the growth in commercial electricity use ranging from 0.7% to 0.9%/year in the alternative cases. In all cases, demand shifts from space heating to space cooling as a growing share of the population moves to warmer regions of the country. Miscellaneous electric loads (MELs)—from a variety of devices and appliances that range from microwave ovens to medical imaging equipment— continue to grow in the residential and commercial sectors, showing both increased market penetration (the share of the potential market that uses the device) and saturation (the number of devices per building).

In the commercial sector, the use of computer servers continues to grow to meet increasing needs for data storage, data processing, and other cloud-based services; however, only a small number of servers are installed in large, dedicated data center buildings. Most of the electricity used by servers can be attributed to equipment located in server rooms at the building site in offices, education buildings, and healthcare facilities.

Residential natural gas use declines in the Reference case with improvements in equipment and building shell efficiencies, price increases over time, and reduced heating needs as populations shift. Natural gas consumption in the commercial sector would be relatively flat as a result of efficiency improvements that offset floorspace growth, but increases in natural gas-fueled CHP capacity keep sector consumption trending upward throughout the projection. In the residential and commercial sectors, natural gas prices increase 2.5 and 3.0 times faster, respectively, than electricity prices through 2040 in the Reference case. In the High Oil and Gas Resources case, with lower natural gas prices, commercial delivered natural gas consumption grows by 0.7%/year, or more than twice the rate in the Reference case.

In the residential sector, distillate consumption and propane consumption, primarily for space heating, decline by 2.7%/year and 2.0%/year, respectively, in the Reference case from 2013 to 2040. The declines are even larger in the High Oil Price case, at 3.1%/ year and 2.3%/year for distillate and propane, respectively, over the same period.

End-use energy intensity, as measured by consumption per residential household or square foot of commercial floorspace, decreases in the Reference case as a result of increases in the efficiency of equipment for many end uses (Figure 16 and Figure 17). Federal standards and voluntary market transformation programs (e.g., Energy Star) target uses such as space heating and cooling, water heating, lighting, and refrigeration, as well as devices that are rapidly proliferating, such as set-top boxes and external power supplies.

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As a result of collaboration among industry, efficiency advocates, and government, a voluntary agreement for set-top boxes has been issued in lieu of federal standards.[23] Commercial refrigeration standards that will affect walk-in and reach-in coolers and freezers are under discussion among stakeholders.[24] As more states adopt new building codes, shell efficiencies of newly constructed buildings are improving, which will reduce future energy use for heating and cooling in the residential and commercial sectors.

In the AEO2015 Reference case, residential and commercial energy intensities for miscellaneous electric loads (MEL) and nonelectric miscellaneous uses in 2040 are roughly 18% and 23% higher, respectively, than they were in 2013. These devices and appliances vary greatly in their energy use characteristics, and their total energy consumption is closely tied to their levels of penetration and saturation in the buildings sectors. As a result, MEL and nonelectric miscellaneous uses are difficult targets for federal efficiency standards.[25]

Penetration of grid-connected distributed generation continues to grow as both equipment and non-equipment costs decline, slowing delivered electricity demand growth in both residential and commercial buildings. In the AEO2015 Reference case, solar photovoltaic (PV) capacity in the residential sector grows by an average of about 30%/year from 2013 through 2016, compared with 9%/year for commercial sector PV, driven by the recent popularity of third-party leasing and other innovative financing options and tax credits. Following expiration of the 30% federal investment tax credit at the end of 2016, the average annual growth of PV capacity in residential and commercial buildings slows to about 6% in both sectors through 2040.

Natural gas CHP capacity in the commercial sector grows by an average of 9%/year from 2013 to 2040 in the Reference case and shows little variation across the alternative cases. Although natural gas prices are lower in the High Oil and Gas Resource case than in the Reference case, lower electricity prices limit the attractiveness of commercial CHP relative to purchased electricity.

Endnotes

19. Vocational vehicles include a diverse group of heavy-duty trucks, such as box/delivery trucks, refuse haulers, dump trucks, etc.
20. The five metal-based durables industries are fabricated metal products (NAICS 332), machinery (NAICS 333), computers (NAICS 335), transportation equipment (NAICS 336), and electrical equipment (NAICS 335).
21. Hydrocarbon gas liquids are natural gas liquids (NGL) and olefins. NGL include ethane, propane, normal butane, isobutane, and natural gasoline. Olefins include ethylene, propylene, butylene, and isobutylene. See http://www.eia.gov/tools/glossary/index.cfm?id=Hydrocarbon%20gas%20liquids.
22. Naphtha is a refined or semi-refined petroleum fraction used in chemical feedstocks and many other petroleum products, see www.eia.gov/tools/glossary/index.cfm?id=naphtha.
23. Following a consensus agreement among manufacturers and industry representatives that is expected to achieve significant energy savings, the U.S. Department of Energy (DOE) has withdrawn its proposed rulemaking for set-top boxes. See https://www.federalregister.gov/articles/text/raw_text/201/331/264.txt.
24. Walk-in coolers and walk-in freezer panels, doors, and refrigeration systems are currently scheduled to comply with the updated standard beginning in August 2017 (see http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/26), and DOE has denied a petition from the Air-Conditioning, Heating, and Refrigeration Institute (AHRI) to reconsider its final rulemaking (see http://www.energy.gov/sites/prod/ files/2014/09/f18/petition_denial.pdf).
25. Navigant Consulting Inc. and Leidos—formerly SAIC, Analysis and Representation of Miscellaneous Electric Loads in NEMS, prepared for the U.S. Energy Information Administration (Washington, DC: May 2013), http://www.eia.gov/analysis/studies/demand/miscelectric/.