1. The Outlook for Electricity Supply and Demand to 2035: Key Drivers
Center for Public Utilities Current Issues Conference
Session on Balancing Reliability, Affordability, and Environmental Protection
College of Business
New Mexico State University
March 12, 2012 | Santa Fe, New Mexico
Howard Gruenspecht, Acting Administrator

2. While electricity consumption grows by 23% over the AEO2012 Reference case projection, the annual rate of growth slows
percent growth (3-year rolling average)
Period Annual Growth
1950s
1960s
1970s
1980s
1990s
History
2010
Structural Change in Economy - Higher prices - Standards - Improved efficiency
Projections
Source: EIA, Annual Energy Outlook 2012 Early Release
Howard Gruenspecht Santa Fe, March 12, 2012 2

3. Electricity mix gradually shifts to lower-carbon options in the Reference case , led by growth in renewables and natural gas
electricity net generation
trillion kilowatthours per year
2010
27%
Natural gas
24%
16%
Renewables
10%
39%
Coal
45%
20%
Oil and other liquids
Nuclear
18% 1% 1%
Source: EIA, Annual Energy Outlook 2012 Early Release
Howard Gruenspecht Santa Fe, March 12, 2012 3 3

4. Domestic natural gas production is projected to grow faster than consumption
U.S. dry gas
trillion cubic feet per year
History
2010
Projections
Consumption
Domestic supply
Net imports
Source: EIA, Annual Energy Outlook 2012 Early Release
Howard Gruenspecht Santa Fe, March 12, 2012

5. Technically recoverable natural gas resources for AEO 2012 reflect updated assessments
U.S. dry gas resources
trillion cubic feet
Unproved shale gas
Unproved other gas (including Alaska* and offshore)
Proved reserves (all types and locations)
2,214
482
1,460
273
AEO Edition
*Alaska resource estimates prior to AEO2009 reflect resources from the North Slope that were not included in previously published documentation.
Source: EIA, Annual Energy Outlook
Howard Gruenspecht Santa Fe, March 12, 2012

6. Growing shale gas supplies are projected to more than offset declines in other U.S. natural gas production sources
U.S. dry gas production
trillion cubic feet per year
History
2010
Projections
49%
Shale gas
23%
26%
Tight gas
21% 9%
Non-associated offshore 2% 9% 7%
Coalbed methane
10%
Alaska 1%
Associated with oil 7% 7%
21%
Non-associated onshore 9%
Source: EIA, Annual Energy Outlook 2012 Early Release
Howard Gruenspecht Santa Fe, March 12, 2012 6 6

7. Global spot natural gas and crude oil prices with average monthly LNG prices in Japan
482
1,460
273
Source: EIA based on Bloomberg as of 3/5/2012
Howard Gruenspecht Santa Fe, March 12, 2012

8. EIA’s natural gas price projections are slightly lower than in AEO2011, consistent with recent market developments
natural gas spot price (Henry Hub)
2010 dollars per million Btu
History
2010
Projections
AEO2011
AEO2012
Sources: EIA, Annual Energy Outlook 2012 Early Release and EIA, Annual Energy Outlook 2011
Howard Gruenspecht Santa Fe, March 12, 2012

9. The average delivered price of coal to electricity generators varies widely across U.S. regions – transport costs are a key reason
2010 Delivered coal prices, $ per million Btu
$1.91
$1.83
$1.46
$1.49
$1.57
$1.93
1.77
$1.51
$2.45
$2.48
$3.65
$4.46
$3.40
$1.75
$2.02
$2.96
$3.41
$2.01
$2.91
N/A
National Average
Minimum
Maximum
$2.25
$1.46
$4.46
Source: EIA, Annual Energy Outlook 2012 Early Release
Howard Gruenspecht Santa Fe, March 12, 2012

10. Operating costs: existing plants with and without a value on carbon
Fuel Cost for Existing Coal and Combined Cycle Natural Gas Units with a Value Placed on Carbon Dioxide Emissions
The “crossover point” for least-cost dispatch of coal and natural gas capacity depends on both fuel prices and the carbon value. At lower natural gas prices, the “crossover” occurs at a lower carbon value.
Environmental operating costs and retrofit costs for pollution controls at existing coal-fired plants can “raise the bar” for their continued operation.
For retrofit decisions, the unit’s perceived “useful life,” which plays a critical role, can be affected by views regarding future climate policies
2010 dollars per megawatthour
Coal at $3
Coal at $2
Natural Gas
CC at $7
Natural Gas
CC at $4
Natural Gas CC at $3
Howard Gruenspecht Santa Fe, March 12, 2012

11. For more information
U.S. Energy Information Administration home page |
Short-Term Energy Outlook |
Annual Energy Outlook |
International Energy Outlook |
Monthly Energy Review |
EIA Information Center
(202)
Our average response time is within three business days.
24-hour automated information line about EIA and frequently asked questions.
Howard Gruenspecht Santa Fe, March 12, 2012