U.S. Energy Information Administration Independent Statistics & Analysis EIA and NASEO National Association of State Energy Officials February 6, 2014 | Washington, DC By Howard Gruenspecht, Deputy Administrator Energy Information Administration Many shared interests

Current winter situation Howard Gruenspecht, NASEO February 6,

Nationally, heating degree days are well above last winter, but near NOAA’s 30-year norms. Recently, the Midwest has been very cold Howard Gruenspecht, NASEO February 6, February 2 – Observed seasonal accumulations thru Feb 1 Census divisionTotal Deviation from normal Deviation from last yearTotal Deviation from normal Deviation from last year Deviation from normal (percent) Deviation from last year (percent) New England Middle Atlantic East North Central West North Central South Atlantic East South Central West South Central Mountain Pacific United States Note: Normal reflects average over Source: National Atmospheric and Oceanic Administration, Climate Prediction Center

NOAA forecast calls for below normal temperatures across much of the Midwest through February 15; somewhat improved after Howard Gruenspecht, NASEO February 6, Source: National Oceanic and Atmospheric Administration Climate Prediction Center, made February day outlook 8-14 day outlook

Regional share of all U.S. households by primary heating fuel Howard Gruenspecht, NASEO February 6, Source: U.S. Census Bureau, 2012 American Community Survey National share of homes by primary space heating fuel Regional share of homes by primary space heating fuel (across Census Regions) propane 4.5% heating oil 5.5% natural gas 48.2%

Conway (KS) price premium over Mt. Belvieu (TX) grew rapidly in late January, but has since narrowed Howard Gruenspecht, NASEO February 6, Source: U.S. Energy Information Administration, Thomson Reuters, data through February 5 propane and propylene spot prices dollars per gallon

State-reported residential retail prices for states in the Midwest Howard Gruenspecht, NASEO February 6, /6/141/13/141/20/141/27/142/3/14 Residential retail price (dollars per gallon, excluding taxes) Indiana Iowa Kentucky Michigan Minnesota Missouri Nebraska North Dakota Ohio South Dakota Wisconsin Note: Illinois, Kansas, Oklahoma, and Tennessee do not report information Source: EIA, State Heating Oil and Propane Program, data through February 5

Rapidly changing energy outlook Howard Gruenspecht, NASEO February 6,

Key results from the AEO2014 Reference case 9 Growing domestic production of natural gas and oil continues to reshape the U.S. energy economy, with crude oil approaching the 1970 all-time high of 9.6 million barrels per day Light-duty vehicle energy use declines sharply reflecting slowing growth in vehicle miles traveled and accelerated improvement in vehicle efficiency With continued growth in shale gas production, natural gas becomes the largest source of U.S. electric power generation, surpassing coal by 2035, and boosting production and natural gas consumption in manufacturing Strong growth in domestic natural gas production supports increased exports of both pipeline and liquefied natural gas With strong growth in domestic oil and gas production, U.S. dependence on imported fuels falls sharply Improved efficiency of energy use and a shift away from carbon-intensive fuels keep U.S. energy-related carbon dioxide emissions below their 2005 level through 2040 Howard Gruenspecht, NASEO February 6, 2014

Growing tight oil and offshore crude oil production drive U.S. output close to historical high 10 U.S. crude oil production million barrels per day Source: EIA, Annual Energy Outlook 2014 Early Release Tight oil Alaska Other lower 48 onshore Lower 48 offshore ProjectionsHistory 2012 U.S. maximum production level of 9.6 million barrels per day in 1970 Howard Gruenspecht, NASEO February 6, 2014

Transportation sector motor gasoline demand declines, while diesel fuel accounts for a growing portion of the market 11 transportation energy consumption by fuel quadrillion Btu Source: EIA, Annual Energy Outlook 2014 Early Release ProjectionsHistory % Motor gasoline Jet fuel CNG/LNG 12% 13% 3% 44% 31% 3% 4% Other* Diesel 22% % 13% 3% 30% 1% 2040 Ethanol 4% 5% *Includes aviation gasoline, propane, residual fuel oil, lubricants, electricity, and liquid hydrogen Howard Gruenspecht, NASEO February 6, 2014

U.S. becomes a net exporter of natural gas in the near future 12 U.S. dry natural gas trillion cubic feet per year Source: EIA, Annual Energy Outlook 2014 Early Release ProjectionsHistory 2012 Consumption Domestic supply Net exports billion cubic feet per day Howard Gruenspecht, NASEO February 6, 2014

13 U.S. dry gas consumption trillion cubic feet Source: EIA, Annual Energy Outlook 2014 Early Release ProjectionsHistory Industrial* Electric power Commercial Residential Transportation ** *Includes combined heat-and-power and lease and plant fuel **Includes pipeline fuel Natural gas consumption growth is driven by electric power, industrial, and transportation use Howard Gruenspecht, NASEO February 6, 2014

U.S. natural gas imports and exports trillion cubic feet per year Alaska LNG exports Pipeline exports to Mexico Pipeline exports to Canada Lower 48 states LNG exports Pipeline imports from Canada LNG imports Source: EIA, Annual Energy Outlook 2014 Early Release billion cubic feet per day 5.4 tcf of exports (14.8 bcf/day) 2.0 tcf of imports (5.4 bcf/day) U.S. natural gas gross exports exceed 5 tcf in 2025 ProjectionsHistory Howard Gruenspecht, NASEO February 6, 2014

Energy-related CO 2 emissions remain below the 2005 level over the projection period 15 carbon dioxide emissions billion metric tons Source: EIA, Annual Energy Outlook 2014 Early Release Projections History Energy-related carbon dioxide emissions are 9% below the 2005 level in 2020 and 7% below the 2005 level in Howard Gruenspecht, NASEO February 6, 2014

Expanded coverage of state-level data and wood Howard Gruenspecht, NASEO February 6,

17 U.S. States Energy Portal Howard Gruenspecht, NASEO February 6, 2014

18 U.S. States Energy Portal Home Page ( Howard Gruenspecht, NASEO February 6, 2014

19 Pennsylvania Page ( Howard Gruenspecht, NASEO February 6, 2014

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21 Howard Gruenspecht, NASEO February 6, 2014

Wood energy data: collaboration to expand coverage Howard Gruenspecht, NASEO February 6, Improving EIA’s data series will require collaborative efforts with: –states through NASEO –Department of Agriculture/Forest Service –various parts of the wood industry Potential improvements include –covering more forms of wood consumption –standardizing pricing and Btu estimation –surveying wholesale and retail prices of wood products

Why wood matters Howard Gruenspecht, NASEO February 6, Over 13 million homes use wood, including almost 3 million as the primary heating fuel Residential wood consumption is now close to fuel oil (between trillion Btu) and expected to surpass fuel oil in our projections Collecting better wood data presents challenges –market lacks standardization –regulation of cordwood retailers varies by location –heat content varies by type of wood, dryness –some transactions may not involve a price

For more information 24 U.S. Energy Information Administration home page | Short-Term Energy Outlook | Annual Energy Outlook | International Energy Outlook | Monthly Energy Review | Today in Energy | State Energy Portal | Drilling Productivity Report | Howard Gruenspecht, NASEO February 6, 2014