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ENERGY

POLICIES

OF IEA

COUNTRIES

United

States

2019 Review

ENERGY

POLICIES

OF IEA

COUNTRIES

United

States

2019 Review

INTERNATIONAL ENERGY AGENCY

The IEA examines

IEA member

IEA association

the full spectrum

countries:

countries:

of energy issues

 

 

including oil, gas

Australia

Brazil

and coal supply and

Austria

China

demand, renewable

Belgium

India

energy technologies,

Canada

Indonesia

electricity markets,

Czech Republic

Morocco

energy efficiency,

Denmark

Singapore

access to energy,

Estonia

South Africa

demand side

Finland

Thailand

management and

France

 

much more. Through

Germany

 

its work, the IEA

Greece

 

advocates policies

Hungary

 

that will enhance

Ireland

 

the reliability,

Italy

 

affordability and

Japan

 

sustainability of

Korea

 

energy in its 30

Luxembourg

 

member countries,

Mexico

 

8 association

Netherlands

 

countries and

New Zealand

 

beyond.

Norway

 

 

Poland

 

 

Portugal

 

 

Slovak Republic

 

 

Spain

 

 

Sweden

 

 

Switzerland

 

 

Turkey

 

 

United Kingdom

 

 

United States

 

 

The European

 

 

Commission also

 

 

participates in the

 

 

work of the IEA

 

Please note that this publication is subject to specific restrictions that limit its use and distribution. The terms and conditions are available online at www.iea.org/t&c/

Source: IEA. All rights reserved.

International Energy Agency Website: www.iea.org

Foreword

The International Energy Agency (IEA) has conducted in-depth peer reviews of its member countries’ energy policies since 1976. This process not only supports energy policy development, but also encourages the exchange of and learning from international best practices and experiences. In short, by seeing what has worked – or not – in the “real world”, these reviews help to identify policies that achieve objectives and bring concrete results. Recently, the IEA has moved to modernise the reviews by focusing on some of the key energy challenges in today’s rapidly changing energy markets.

The shale revolution continues to be a driving force for United States (US) energy policy, shifting gears from a mindset of energy scarcity to one of energy abundance. Innovations in oil and gas extraction through horizontal drilling and hydraulic fracturing have made oil and gas production a mainstay of the US energy landscape and, indeed, the world. The timely siting of supporting infrastructure will be essential to ensuring continued gains from the shale boom. Notably, the shale revolution is expected to turn the United States from a net energy importer to a net exporter by 2020.

As with most IEA countries, energy security remains a priority issue for the United States, as the government steps up efforts to respond to new threats such as cyberattacks. Internationally, US energy exports are already playing an important role in diversifying global energy supplies.

US government policy is centred on the concept of “energy dominance”, which reflects a strategy to maximise energy production, expand exports and be a leader in energy technologies. Environmental deregulation is a central focus, though it may have implications for the emissions trajectory.

I am pleased to observe that the United States has already achieved impressive emissions reductions over the past decade. A sizeable driver of this has been the switch away from coal-fired generation in the electricity sector towards low-cost shale gas and renewables, aided by falling costs and policy support. While these trends are expected to continue, the closure of additional coal and nuclear generation capacity also warrants monitoring. Policy and regulatory responses will likely be needed to ensure a smooth transition in the electricity sector that accommodates the growth in variable renewables while also ensuring reliability and resilience of the overall power system.

It is my hope that this report will help support the United States as it manages the transition of its energy sector to ensure a clean, safe and affordable energy system.

Dr Fatih Birol

Executive Director

International Energy Agency

3

FOREWORD

IEA. All rights reserved.

IEA. All rights reserved.

ENERGY INSIGHTS

 

1. Executive summary.....................................................................................................

11

Overview............................................................................................................................

11

Key recommendations.......................................................................................................

15

2. General energy policy.................................................................................................

17

Country overview...............................................................................................................

17

Supply and demand of energy ..........................................................................................

19

Institutions..........................................................................................................................

26

“Energy dominance” strategy ............................................................................................

30

Energy policies ..................................................................................................................

32

Energy permitting and regulatory regimes ........................................................................

33

Energy pricing and taxation...............................................................................................

34

Energy data .......................................................................................................................

36

Assessment .......................................................................................................................

36

Recommendations.............................................................................................................

39

ENERGY SYSTEM TRANSFORMATION

 

3. Energy and climate change........................................................................................

43

Overview............................................................................................................................

43

Energy-related CO2 emissions ..........................................................................................

44

CO2 drivers and carbon intensity.......................................................................................

46

Institutions..........................................................................................................................

48

Climate change mitigation .................................................................................................

50

Adapting to climate change ...............................................................................................

57

Assessment .......................................................................................................................

59

Recommendations.............................................................................................................

61

4. Energy efficiency.........................................................................................................

65

Overview............................................................................................................................

65

Institutional governance of energy efficiency policies.......................................................

67

Transport sector ................................................................................................................

68

Residential and commercial ..............................................................................................

72

Industry ..............................................................................................................................

77

Demand response .............................................................................................................

79

Utility efficiency obligations ...............................................................................................

80

Assessment .......................................................................................................................

80

Recommendations.............................................................................................................

83

5

TABLE OF CONTENTS

IEA. All rights reserved.

TABLE OF CONTENTS

 

5. Renewable energy.......................................................................................................

87

Overview............................................................................................................................

87

Supply and demand...........................................................................................................

88

Policies and measures ......................................................................................................

92

Assessment ....................................................................................................................

100

Recommendations..........................................................................................................

103

6. Energy technology research, development and demonstration.........................

107

Overview.........................................................................................................................

107

Public spending on energy RD&D..................................................................................

108

Institutional framework....................................................................................................

109

Energy RD&D programmes............................................................................................

110

Assessment ....................................................................................................................

121

Recommendations..........................................................................................................

123

ENERGY SECURITY

7. Oil ...............................................................................................................................

127

Overview.........................................................................................................................

127

Supply and demand........................................................................................................

128

Prices and taxes .............................................................................................................

136

Institutions.......................................................................................................................

139

Oil exploration policies....................................................................................................

139

Infrastructure...................................................................................................................

141

Emergency response policy ...........................................................................................

146

Assessment ....................................................................................................................

150

Recommendations..........................................................................................................

152

8. Natural gas ................................................................................................................

155

Overview.........................................................................................................................

155

Supply and demand........................................................................................................

156

Market structure..............................................................................................................

163

Price and taxes...............................................................................................................

165

Infrastructure...................................................................................................................

167

Gas emergency response ..............................................................................................

174

Assessment ....................................................................................................................

176

Recommendations..........................................................................................................

178

9. Electricity...................................................................................................................

181

Overview.........................................................................................................................

181

Electricity supply and demand........................................................................................

182

Electricity system regulation...........................................................................................

186

The physical grid ............................................................................................................

187

Market structure..............................................................................................................

188

Retail prices and taxation ...............................................................................................

192

 

 

 

 

6

 

 

 

 

IEA. All rights reserved.

 

TABLE OF CONTENTS

Policies and regulations..................................................................................................

193

Electricity in the low-carbon transition............................................................................

195

Energy security...............................................................................................................

201

Assessment ....................................................................................................................

209

Recommendations..........................................................................................................

211

10. Nuclear.....................................................................................................................

217

Overview.........................................................................................................................

217

Institutional oversight and regulation..............................................................................

218

Operational fleet .............................................................................................................

221

New builds ......................................................................................................................

224

SMRs and other advanced reactors...............................................................................

225

Nuclear fuel cycle ...........................................................................................................

227

Innovation, nuclear research, human resources, education..........................................

228

Assessment ....................................................................................................................

229

Recommendations..........................................................................................................

231

11. Coal ..........................................................................................................................

233

Overview.........................................................................................................................

233

Supply and demand........................................................................................................

234

Institutions.......................................................................................................................

237

Policy and regulation ......................................................................................................

238

Emissions reduction efforts for coal-fired generation.....................................................

241

Assessment ....................................................................................................................

243

Recommendations..........................................................................................................

245

12. The resilience of US energy infrastructure .........................................................

249

Overview.........................................................................................................................

249

Definition of resilience ....................................................................................................

250

Institutional governance..................................................................................................

251

Energy resilience policies...............................................................................................

252

Climate resilience ...........................................................................................................

255

Resilience in electricity ...................................................................................................

259

Resilience in oil and gas infrastructure ..........................................................................

260

Cybersecurity resilience .................................................................................................

261

Assessment ....................................................................................................................

262

Recommendations..........................................................................................................

264

ANNEXES

ANNEX A: Organisations visited ....................................................................................

267

ANNEX B: Energy balances and key statistical data.....................................................

270

ANNEX C: International Energy Agency “Shared Goals” ..............................................

274

ANNEX D: Glossary and list of abbreviations ................................................................

276

 

 

 

 

7

 

 

 

 

 

 

TABLE OF CONTENTS

IEA. All rights reserved.

TABLE OF CONTENTS

LIST OF FIGURES, TABLES AND BOXES

Figures

 

2.1

Map of the United States .........................................................................................

18

2.2

Overview of the US energy system by fuel and sector, 2018 .................................

20

2.3

Breakdown of TPES in IEA member countries, 2018 .............................................

21

2.4

TPES by source, 1973-2018 ...................................................................................

22

2.5

Energy production by source, 1973-2018 ...............................................................

22

2.6

Import dependencies for different energy sources in TPES, 1973-2018................

23

2.7

TFC by sector, 1973-2017.......................................................................................

24

2.8

TFC by source and sector, 2017 .............................................................................

24

2.9

US trade in crude oil and petroleum products, 2000-17 .........................................

25

3.1

GHG emissions by sector, 1990-2017 ....................................................................

44

3.2

Energy-related CO emissions by sector, 1990-2017.............................................

45

3.3

Energy-related CO emissions by energy source, 1990-2017................................

45

3.4

Energy-related CO2 emissions and main drivers in US, 1990-2017.......................

46

3.5

CO2 intensity (energy-related emissions) in IEA member countries, 2017.............

47

3.6CO2 intensity of the United States and select IEA member countries, 1990-2017..47

3.7CO2 intensity of power and heat generation in the United States and in other

 

selected IEA member countries, 1990-2017 ............................................................

48

3.8

Emissions projections and outlook (based on EIA estimates) ................................

50

3.9

US methane emissions............................................................................................

54

4.1

Energy supply and drivers, 1990-2017....................................................................

65

4.2

TFC per GDP in the United States and selected IEA countries, 1990-2017 ..........

66

4.4

Final energy consumption by sector, 1990-2017 ....................................................

67

4.5

TFC in transport by source, 1973-2017...................................................................

68

4.6

Energy intensity in road transport by mode, 2000-16 .............................................

69

4.7

Growth and projections for EV sales, 2010-50........................................................

71

4.8

TFC in residential and commercial sectors by source, 1973-2017.........................

72

4.9

Residential energy consumption by category, 2000-16 ..........................................

73

4.10

Residential energy intensity, 2000 and 2016 ..........................................................

73

4.11

Outlook for household building stock per type, 2017-50.........................................

74

4.12

TFC in industry by source, 1974-2017 ....................................................................

78

4.13

Energy consumption in manufacturing industry sectors, 2017 ...............................

78

5.1

Share of renewable energy in TPES, electricity and TFC, 1978-2018 ...................

88

5.2

Renewable energy in TPES, 2000-18.....................................................................

88

5.3

Bioenergy and waste supply by source and sector, 2018.......................................

89

5.4

Share of renewable energy in TPES in IEA member countries, 2018....................

90

5.5

Renewable electricity generation and projections, 1990-2023 ...............................

91

5.6

Share of renewables in electricity generation in IEA countries, 2018.....................

92

6.1

Government energy RD&D spending per GDP in IEA countries, 2017...............

108

6.2

Government energy RD&D spending in IEA countries, 2017 ..............................

109

6.3

Government energy RD&D spending by category, 2010-17................................

109

7.1

Share of oil in different energy metrics, 1978-2018 .............................................

128

7.2

US domestic oil production, 2008-18 ...................................................................

129

7.3

US oil import dependency ....................................................................................

130

7.4

Refinery gross outputs and demand by products, 2018 ......................................

131

7.5

Overview of US oil supply, demand and trades, 2008-18....................................

132

7.6

US crude oil net imports per country, 2008-18.....................................................

133

7.7

US oil products net imports per country, 2008-18................................................

133

 

 

 

 

 

 

8

 

 

 

 

 

 

 

IEA. All rights reserved.

 

TABLE OF CONTENTS

7.8

US oil consumption by product, 2008-18 .............................................................

134

7.9

US oil consumption sectors, 2007-17...................................................................

135

7.10

US oil fuel prices, 2008-18 ...................................................................................

137

7.11

Oil fuel prices in IEA member countries, second quarter of 2018........................

138

7.12

Oil infrastructure in the United States, 2018 ........................................................

145

7.13

Oil stocks in days of net imports and 90-day IEA obligation, end-January 2019 148

8.1

Share of natural gas in different energy systems, 1978-2018 .............................

156

8.2

Overview of US total supply of natural gas, 2000-18...........................................

156

8.3

US natural gas production, 2007-17.....................................................................

157

8.4

Seven major shale plays across the United States, 2018....................................

158

8.5

US natural gas consumption by sector, 2007-17 .................................................

159

8.6

US natural gas consumption outlook, 2012-24 ....................................................

161

8.7

US natural gas imports, 2000-18..........................................................................

162

8.8

US natural gas exports, 2000-18..........................................................................

162

8.9

US LNG exports by destination, 2016-17.............................................................

163

8.10

US LNG exports by destination (by region and country), 2016-17 ......................

164

8.11

Average wholesale gas prices at three US hubs, 2013-18..................................

165

8.12

Natural gas prices in IEA member countries, 2018..............................................

166

8.13

Gas pipeline map, 2018........................................................................................

169

8.14

Infrastructure development for LNG export terminals, May 2019 ........................

172

8.15

Infrastructure developments for LNG export terminals, 2019 ..............................

172

9.1

Electricity generation by source, 2018 .................................................................

182

9.2

Electricity supply by source, 1973-2018...............................................................

183

9.3

Electricity generation by source in IEA, 2018.......................................................

184

9.4

Electricity net imports and exports by country, 2000-17 ......................................

185

9.5

Electricity consumption (TFC) by consuming sector, 1973-2017 ........................

185

9.6

Monthly electricity generation by source, January 2013-July 2018 .....................

186

9.7

US electricity ISO and RTO regions.....................................................................

189

9.8

Electricity price trends in the US, 1990-2018 .......................................................

192

9.9

Industry electricity prices in IEA member countries, 2018 ...................................

193

9.10

Electricity generation capacity retirements, 2008-18 ...........................................

202

10.1

Nuclear power generation, 1973-2018.................................................................

217

11.1

Share of coal in different energy supplies, 1978-2018.........................................

233

11.2

Coal supply by source, 1973-2018.......................................................................

234

11.3

Weekly coal production by region, May 2018-April 2019.....................................

235

11.4

Hard coal trade by country, 1978-2018................................................................

235

11.5

Coal consumption by sector, 1973-2017..............................................................

236

11.6

US coal plant retirements and planned retirements, 2007-20..............................

236

12.1

Losses from billion-dollar weather events (inflation-adjusted) .............................

250

Tables

2.1Value of US trade in crude oil, petroleum products, natural gas and electricity

 

with Canada and Mexico (USD in millions), 2017...................................................

26

7.1

Top 10 refineries in the United States..................................................................

144

9.1

Installed electricity generating capacity, 2000-17 (GW).......................................

183

9.2

RPS across US states ..........................................................................................

196

10.1

Status of SLR (80 years of operation)..................................................................

219

10.2

Premature shutdowns and planned shutdowns ...................................................

223

10.3

Plants that have benefited from state policies......................................................

224

 

 

 

 

 

 

9

 

 

 

 

 

 

 

TABLE OF CONTENTS

IEA. All rights reserved.

TABLE OF CONTENTS

 

12.1

Components of resilience and resilience-enhancing measures ..........................

250

12.2

ISER response efforts, 2018 ................................................................................

254

12.3

Potential energy sector impacts from extreme weather and climate change ......

256

12.4

Examples of energy sector resilience solutions ...................................................

256

Boxes

 

5.1

Ethanol as transport biofuel in the United States....................................................

89

7.1

Suspension of 40-year-old ban on crude oil exports............................................

130

7.2

Interconnection with Canada................................................................................

143

8.1

Key drivers of US natural gas consumption: Power generation and chemicals ..

159

8.2

Growth of the US LNG trade and its outlook........................................................

164

10

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