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1 [1] (December 1, 2020)

handle is hein.crs/govdcsn0001 and id is 1 raw text is: %Fnw C~l rES .rh$e December 1, 2020 The Annual Energy Outlook (AEO): A Brief Overview The Annual Energy Outlook (AEO) provides an annual projection of U.S. energy supply, demand, prices, certain energy-related air emissions, and other factors over a 25-30 year period. Congress has an ongoing interest in whether and how to use the AEO in potentially forthcoming discussions about energy policy. Additionally, Congress may examine the resources and guidance it gives the U.S. Energy Information Administration (EIA) to conduct the AEO, and whether any changes are necessary. EIA an independent statistical agency within the U.S. Department of Energy (DOE) (P.L. 95-91; 42 U.S.C. 7135) reports that it publishes the AEO each January to satisfy the Department of Energy Organization Act of 1977, which requires the EIA Administrator to prepare annual reports on trends and projections for energy use and supply. Publicly accessible print records of the AEO date back to 1979. The AEO has been referenced as an authoritative source by Congress and its support agencies and by executive agencies, industry, and others. For instance, the AEO has been referenced at multiple congressional hearings related to energy and climate change. Executive agencies that have used the AEO include the Environmental Protection Agency, to project affected facilities in an oil and gas rulemaking, and the National Highway Traffic Safety Administration, as a part of a rulemaking for federal motor vehicle safety standards. Also, the AEO has been referenced in legislation in the past, for instance, bills to require a particular AEO projection to be used as a baseline for certain analysis and reporting. The AEO is an annual assessment of U.S. energy markets for the next few decades. It contains numerous projections, including for energy supply by fuel type (e.g., petroleum), energy demand by sector (e.g., transportation), energy prices by fuel type and sector, and energy-related carbon dioxide emissions. The AEO presents these projections in both written summaries and graphics. Many of the graphics in the AEO show historical data alongside the projections. EIA also releases data tables associated with the AEO projections. Projections are reported for the United States as a whole, while some information also is reported regionally. Not all aspects of the energy system are included in the AEO. For example, the AEO does not contain employment projections for the various energy sectors, nor does it contain projections for certain environmental metrics (e.g., methane emissions) associated with energy production. An integral component of the AEO is its reference case -a scenario constructed by EIA which projects future energy system conditions under assumptions detailed in accompanying EIA reports. In general, the AEO's reference case assumes (1) no changes in current U.S. laws and regulations, and (2) the continuation of historic industry and technology trends. The AEO attempts to reflect all federal laws and regulations and most key state laws and regulations that affect the energy sector. The AEO also includes projections for side cases scenarios with certain alternative assumptions. Side cases can help identify how sensitive model results are to changes in these assumptions. They also can demonstrate the range of possible changes in the energy system, based on the range of assumptions included in the side cases. The 2020 version of the AEO (AE02020) presented eight side cases exploring the potential impact of differing assumptions about oil and gas supply, oil prices, economic growth rates, and renewable energy costs. Figure 1 shows how AEO side cases can differ from the reference case, using electricity generation as an example. The dark line shows the AE02020 reference case projection for the share of electricity coming from wind and solar energy nationwide. In the reference case, that share grows from 12% in 2020 to 30% in 2050. In the AEO side cases, the share of electricity coming from wind and solar energy in 2050 ranges from 18% to 43%. The differences, in this case, arise from assuming lower or higher costs for these and competing energy sources, which affect the market share of wind and solar relative to the reference case. Figure I. Projected Share of Total Electricity Generation from Wind and Solar Sources, 2020-2050 0% Side Cases 30; 20Y2O 202S 230 2035 2(340 2t14i 205O Source: EIA, Annual Energy Outlook 2020. Notes: Dark line represents EIA's reference case. Shaded area represents the range of outcomes in EIA's side cases. Assumptions for each scenario are described in the Annual Energy Outlook 2020. EIA does not refer to the AEO as a forecast. For example, in the AE02020 EIA states that the value of its projections is not that they are predictions of what will happen, but rather, they are modeled projections of what may happen \n\\\\\\\\\\mm\ \\ \\\ goo \\\\ \ L \N \ I \N,\ \\ \ \ Q\\ \\\ \\\

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