Market Trends

162.  The year 2004 was used as the end point (as opposed to 2005, which is the base year of the AEO2007 projections) because of the precipitous drop in industrial energy consumption between 2004 and 2005 caused by the impact of hurricanes Katrina and Rita. 

163.  When the reference case industrial energy intensity projections are decomposed using the Divisia index, structural change accounts for 61 percent of the projected change in energy intensity. A discussion of the index can be found in Boyd et al., “Separating the Changing Effects of U.S. Manufacturing Production from Energy Efficiency Improvements,” Energy Journal, Vol. 8, No. 2 (1987). 

164.  The refining portion of the industrial sector is projected to become more energy-intensive over time. Its energy intensity is projected to increase as a result of declining crude oil quality, higher quality products, and the use of alternative inputs and technologies to produce liquid fuels. Coal-to-liquids and biofuel techniques are more energy-intensive than standard refining processes. 

165.  The alternative technology cases change technology characterizations only for sectors represented in the NEMS industrial model. Consequently, in the technology cases portrayed in Figure 48, refining values are unchanged from those in the reference case projections. The petroleum refining industry displays a range of intensity changes in other alternative AEO2007 cases but responds differently from the other industrial subsectors. For example, because of increased CTL production in the high price case, energy intensity in the petroleum refining industry is higher than in the reference case. In all the other industrial subsectors, energy intensity is lower in the high price case. 

166.  S.C. Davis and S.W. Diegel, Transportation Energy Data Book: Edition 25, ORNL-6974 (Oak Ridge, TN, May 2006), Chapter 3, “All Highway Vehicles and Characteristics,” web site http://cta.ornl.gov/data/ chapter3.shtml.