[Report#:DOE/EIA-0383(99)] Major Assumptions for the Forecasts Model Results (Appendix Tables) Assumptions to the AEO99 |
The Annual Energy Outlook 1999 (AEO99) presents midterm forecasts of energy supply, demand, and prices through 2020 prepared by the Energy Information Administration (EIA). The projections are based on results from EIAs National Energy Modeling System (NEMS). The report begins with an Overview summarizing the AEO99 reference case. The next section, Legislation and Regulations, describes the assumptions made with regard to laws that affect energy markets and discusses evolving legislative and regulatory issues. Issues in Focus discusses current energy issuesthe economic decline in East Asia, growth in demand for natural gas, vehicle emissions standards, competitive electricity pricing, renewable portfolio standards, and carbon emissions. It is followed by the analysis of energy market trends. The analysis in AEO99 focuses primarily on a reference case and four other cases that assume higher and lower economic growth and higher and lower world oil prices than in the reference case. Forecast tables for these cases are provided in Appendixes A through C. Appendixes D and E present a summary of the reference case forecasts in units of oil equivalence and household energy expenditures. Other cases explore the impacts of varying key assumptions in NEMSgenerally, technology penetration. The major results are shown in Appendix F. Appendix G briefly describes NEMS and the AEO99 assumptions, with a summary table of the cases. Appendix H provides tables of energy and metric conversion factors. AEO99, the detailed assumptions, and supplementary tables will be available on the EIA Home Page and on CD-ROM. The AEO99 projections are based on Federal, State, and local laws and regulations in effect on July 1, 1998. Pending legislation and sections of existing legislation for which funds have not been appropriated are not reflected in the forecasts. Historical data used for the AEO99 projections were the most current available as of July 31, 1998, when most 1997 data but only partial 1998 data were available. Historical data are presented in this report for comparative purposes; documents referenced in the source notes should be consulted for official values. The AEO99 projections for 1998 and 1999 incorporate the short-term projections from the September update of EIAs Short-Term Energy Outlook (STEO), Third Quarter 1998. The AEO99 projections are used by Federal, State, and local governments, trade associations, and other planners and decisionmakers in the public and private sectors. They are published in accordance with Section 205c of the Department of Energy Organization Act of 1977 (Public Law 9591), which requires the Administrator of EIA to prepare an annual report that contains trends and projections of energy consumption and supply.
As we present the projections in the Annual Energy Outlook 1999 (AEO99), it is important to clarify what these projections represent. While the reference case projections do not hypothesize radical changes in energy markets and energy-using and producing technologies, they do assume continuing market changes and improvements in energy technologies, derived from past trends. The Energy Information Administration (EIA) endeavors to represent current energy market conditions, both domestic and worldwide, and their impacts on future energy trends. An important example of such transitory issues is the ongoing economic crisis in East Asia, which currently is depressing world oil demand and prices and domestic oil production. Another is the continuing restructuring of the U.S. electricity industry and the movement to competitive pricing of electricity. Both of these topics are featured in AEO99, and they are included in the reference case projections. In addition to the longer-term impacts of current market transitions, the reference case projections also include the impacts of a number of potential changes in energy marketsmost notably, technology. Substantial productivity improvements and other technological advances are assumed for the fossil fuel supply sectors, in accordance with recent historical trends, accounting in part for the decline of coal prices and the relatively modest increases in oil and natural gas prices in the projections. The projections also incorporate all new and advanced energy-consuming and generating technologies that are assumed with a reasonable degree of confidence to be available by 2020. As a result, energy intensitythe amount of energy used for each dollar of output in the economydeclines by an average of 1 percent a year through 2020. In contrast, from 1986 to 1996, energy intensity was essentially flat. Because the future cannot be known with certainty, it is possible that any of the assumptions, including the availability and characteristics of technology, may be too optimistic or pessimistic. For that reason, AEO99 includes a wide range of alternative cases examining the effects of variations in many key assumptions. As a policy-neutral organization, EIA does not incorporate future changes in energy-related legislation, regulation, or policy into its projections. Because of this neutrality and the most likely nature of the energy trends, the reference case projections provide a solid baseline against which a variety of alternative policies and assumptions can be analyzed and evaluated. One example of the analytical work performed by EIA relative to its reference projections over the past several years is the recent report, Impacts of the Kyoto Protocol on U.S. Energy Markets and Economic Activity, prepared at the request of the U.S. House of Representatives Committee on Science. Other recent work includes:
Jay E. Hakes |
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File last modified: September 9, 1999
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