1. www.eia.gov U.S. Energy Information Administration Independent Statistics & Analysis Thoughts on Energy Projections Used in Climate Change Analysis for Workshop on Methods to Address Uncertainty in Forecasting Future Values of Key Social, Economic, and Resource Variables March 18, 2013 | Washington, DC by Howard Gruenspecht, Deputy Administrator

2. Howard Gruenspecht, CMU workshop March 18, 2013 2 Vs.

3. Observations regarding energy projections and forecasts Howard Gruenspecht, CMU workshop March 18, 2013 3 Leading providers of energy projections generally do a better job of characterizing uncertainty and providing meaningful caveats than is suggested in the background note. Caveats included both physical or social science studies are not effective in preventing the willful misuse of their contents. This problem, which relates to the actual “wants” and “needs” of policymakers and those seeking to influence the policy process deserves more attention. EIA prepares and publicly posts on a regular basis, detailed “post mortem” comparisons of projected and actual values. While “point value” energy projections are inevitably wrong, experience suggests that fossil fuel quantities are easier to project than fossil fuel prices. Quantities, not prices, are most relevant to climate concerns. Assessment of the track record of energy projections is inherently subjective and in the eye of the beholder.

4. EIA retrospective review of reference case projections through AEO2012: summary Howard Gruenspecht, CMU workshop March 18, 2013 4 Variable Average Absolute Percent Differences Percent of Projections Over- Estimated Real Gross Domestic Product (Average Cumulative Growth)*1.042.6 Petroleum Imported Refiner Acquisition Cost of Crude Oil (Constant $)35.218.6 Imported Refiner Acquisition Cost of Crude Oil (Nominal $)34.719.7 Total Petroleum Consumption6.266.5 Natural Gas Natural Gas Wellhead Prices (Constant $)30.726.1 Natural Gas Wellhead Prices (Nominal $)30.027.1 Total Natural Gas Consumption7.870.2 Coal Coal Prices to Electric Generating Plants (Constant $) 18.639.9 Coal Prices to Electric Generating Plants (Nominal $) 20.843.6 Total Coal Consumption7.460.1 Electricity Average Electricity Prices (Constant $)10.037.8 Average Electricity Prices (Nominal $)12.542.6 Total Electricity Sales4.246.3 Total Energy, Carbon and Intensity Total Energy Consumption5.679.3 * The basis for GDP comparison is the projection differences in the cumulative average growth rate of real GDP from the first year shown for each AEO. The summary information for projection differences given for GDP growth rates is absolute percentage point differences; for all other AEO concepts, the comparison basis is absolute percent differences. Source: EIA, Annual Energy Outlook Retrospective Review Table 1

5. EIA retrospective review of reference case projections through AEO2012: energy related CO 2 emissions Howard Gruenspecht, CMU workshop March 18, 2013 5 Projected (million metric tons)1993199419951996199719981999200020012002200320042005200620072008200920102011 AEO 1994506051305185524052875335537954385482552955995658569457385797587459255984 AEO 1995 51375174518852625309536153945441548955515621568057275775584158895944 AEO 1996 51825224529553555417546455255589566057355812587959255981603060876142 AEO 1997 5295538154915586565857155781586359346009610661846236626863166365 AEO 1998 547456215711578458935957602660986192629263796465654266126683 AEO 1999 55225689581059135976603660846152624463256418649365636641 AEO 2000 5573569257775865597160786172626263456420648065516610 AEO 2001 563057815909602361146197628163876470654166336709 AEO 2002 57235808598160956210632364386530662467276839 AEO 2003 5633574958565954609562326360647566026719 AEO 2004 574358265986612462516357645365596657 AEO 2005 59056023613862746415653366276721 AEO 2006 5967597860806182628163656440 AEO 2007 594059996059612462146296 AEO 2008 59775983597860116087 AEO 2009 5849569957465803 AEO 2010 550755215643 AEO 2011 56435601 AEO 2012 5632 Actual5185525853145501557556225682586757595806585759755997591960205838542956125481 Average Absolute Difference125 134264235183161258137149158157144220222377797659848 Projected vs. Actual (percent difference)1993199419951996199719981999200020012002200320042005200620072008200920102011 AEO 1994-2.4 -4.8-5.2-5.1-5.3-7.3-4.8 -4.4-5.3-5.0-3.1-3.70.69.16.6 AEO 1995 -2.3-2.6-5.7-5.6 -5.7-8.1-5.5 -5.2-5.9-5.3-3.2-4.10.18.55.9 AEO 1996 -2.5-5.0 -4.8-4.7-6.9-4.1-3.7-3.4-4.0-3.1-0.7-1.62.511.18.512.1 AEO 1997 -3.7-3.5-2.3-1.7-3.6-0.8-0.40.1-0.70.23.22.76.815.512.516.1 AEO 1998 -1.80.00.5-1.42.32.62.92.13.36.36.010.720.517.821.9 AEO 1999 -1.80.12.72.93.11.82.65.55.19.919.616.921.2 AEO 2000 -1.9-3.00.31.01.91.72.95.85.410.019.316.720.6 AEO 2001 -4.00.41.82.82.33.36.1 10.820.518.222.4 AEO 2002 -0.60.02.12.03.56.86.911.922.019.924.8 AEO 2003 -3.0-1.8-2.0-0.73.03.58.919.317.622.6 AEO 2004 -1.9-2.5-0.23.53.88.918.916.921.5 AEO 2005 -1.20.43.74.29.920.318.122.6 AEO 2006 -0.51.0 5.915.713.417.5 AEO 2007 0.4-0.33.812.810.714.9 AEO 2008 -0.72.510.17.111.1 AEO 2009 0.25.02.45.9 AEO 2010 1.4-1.63.0 AEO 2011 0.62.2 AEO 2012 2.7 Average Absolute Percent Difference2.4 2.54.84.23.32.84.42.42.62.72.62.43.7 6.514.711.715.5 Source: EIA, Annual Energy Outlook Retrospective Review Table 21

6. Global projections of energy-related CO 2 emissions: EIA International Energy Outlook 2000 and IEA World Energy Outlook 2000 Howard Gruenspecht, CMU workshop March 18, 2013 6 Projected world energy-related CO 2 emissions (Million metric tons carbon dioxide) Source: EIA, International Energy Outlook 2000 and IEA, World Energy Outlook 2000 Actual 2011 value = 31600 History Projections

7. Growth in income and population drive rising energy use; energy intensity improvements moderate increases in energy demand 7 average annual change (2008-2035) percent per year Source: EIA, International Energy Outlook 2011 Howard Gruenspecht, CMU workshop March 18, 2013

8. Observations regarding climate and energy analysis Howard Gruenspecht, CMU workshop March 18, 2013 8 Experts tend to revel in the uncertainties and complexities within their own field while ignoring other key uncertainties, as illustrated by the experience of the Intergovernmental Panel on Climate Change (IPCC). Policy makers objectives and their wants & needs for expert information are often quite different than the objectives and information needs that experts would hold if they were in the role of policy makers. Experts in all fields face a huge challenge in providing information regarding uncertainty within the constraint of an extremely narrow band width for communicating with policy makers and the public. The challenge is not unique to energy projections or forecasts. Improved probabilistic assessments may be more attainable on the hard science side of climate analysis than in energy projections. The premise in the background note that probabilistic energy projections are a particularly high-value target is debatable. Work by Weitzman and others suggest that many of the uncertainties of greatest interest in the climate analysis involve issues that are extremely difficult to assess

9. For more information 9 U.S. Energy Information Administration home page | www.eia.govwww.eia.gov Annual Energy Outlook | www.eia.gov/forecasts/aeowww.eia.gov/forecasts/aeo Short-Term Energy Outlook | www.eia.gov/forecasts/steowww.eia.gov/forecasts/steo International Energy Outlook | www.eia.gov/forecasts/ieowww.eia.gov/forecasts/ieo Today In Energy | www.eia.gov/todayinenergywww.eia.gov/todayinenergy Monthly Energy Review | www.eia.gov/totalenergy/data/monthlywww.eia.gov/totalenergy/data/monthly Annual Energy Review | www.eia.gov/totalenergy/data/annualwww.eia.gov/totalenergy/data/annual Howard Gruenspecht, CMU workshop March 18, 2013