Tag Archives: EIA

U.S. Energy Information Administration Projections Far from Accurate

EIA projections missed unprecedented growth in solar PV installations and a sharp downturn in coal production over the last decade.

For a more detailed analysis of inaccuracy in the EIA’s projections, see CEA’s white paper on the topic here.

Policymakers, utility commissions, investors, and energy companies rely on the U.S. Energy Information Administration’s (EIA’s) data for a wide range of energy analyses and while the historical data provided by the EIA has been extremely useful in many arenas, the EIA’s projections of future trends are often far from accurate. Our research summarizes a few examples of previously reported inaccuracies in EIA projections (for example, here, here, and here), but also provides what we believe to be the first look at the EIA’s inaccurate projections of U.S. coal production in almost a decade.

The projections published in the EIA’s Annual Energy Outlook (AEO) have invariably overestimated the cost of renewable electricity generation and fallen sadly short of predicting new additions of wind and solar capacity. For example, Figure 1 shows that the projections published in the EIA’s Annual Energy Outlook repeatedly underestimated U.S. utility-scale solar photovoltaic (PV) capacity from 2011 to 2015 and continue to predict that solar installations will largely stall through about 2025.

In reality, however, solar PV capacity is growing at an unprecedented rate. The Solar Energy Industries Association reported that by the third quarter of 2016, the cumulative U.S. utility-scale solar PV capacity (including capacity which was under contract but not yet operating) exceeded the AEO2015 projection for capacity in 2039. Accounting for planned capacity which had been announced but was not yet under contract by Q3 2016 indicates that utility-scale solar PV capacity will soon far surpass all AEO projections for 2040.

Solar PV Capacity and Projections
EIA reference case projections of U.S. utility-scale solar PV capacity and historical data (black, bold) as well as points which include planned capacity under contract in Q3 of 2016 and announced but pre-contract installations as of Q3 2016. Projection data taken from the EIA’s Annual Energy Outlook, historical data taken from Solar Energy Industries Association’s U.S. Solar Market Insight Reports.

In addition to missing the sharp rise in solar photovoltaic installations, EIA projections also missed a dramatic downturn in coal production over the last decade. They failed to pick up on the trend year after year and still predict flat or rising coal production through 2040, as shown in Figure 2.

History (black, bold) and annual EIA projections of U.S. coal production from 1997 to 2040. Note that the vertical axis starts at 950 million short tons for clarity. Data taken from: the EIA's Annual Energy Outlook.
History (black, bold) and annual EIA projections of U.S. coal production from 2006-2015. Note that the vertical axis starts at 950 million short tons for clarity. Data taken from: the EIA’s Annual Energy Outlook.

Disruptive innovations tend to precipitate new market trends that are notoriously difficult to predict. Just as the invention of the personal computer led to an abrupt decline in the typewriter industry in the late 1900’s, a massive transition toward renewable resources is transforming U.S. energy markets and so far EIA projections have failed to keep up with this transition. Every year, EIA forecasts predict a return to the trends of the 90’s, but the technological and political landscapes surrounding the U.S. energy industry are changing rapidly and historical precedent suggests that energy markets may never return to those of past decades.

For more details, readers are encouraged to download the full CEA White Paper here.

In Good Company: A Look at Global Coal Reserve Revisions

In my last post, I recounted some of the indications that have surfaced over the last decade that US coal reserves might not be as large as we think.  The work done by the USGS assessing our reserves, and more recently comments from the coal industry themselves cast doubt on the common refrain that the US is “the Saudi Arabia of coal” and the idea that we have a couple of centuries worth of the fuel just laying around, waiting to be burned.  As it turns out, the US isn’t alone in having potentially unreliable reserve numbers.  Over the decades, many other major coal producing nations have also dramatically revised their reserve estimates.

Internationally the main reserve compilations are done by the UN’s World Energy Council (WEC) and to some degree also the German equivalent of the USGS, known as the BGR. Virtually all global (publicly viewable) statistics on fossil fuel reserves are traceable back to one of those two agencies. For instance, the coal reserve numbers in the International Energy Agency’s (IEA’s) 2011 World Energy Outlook came from the BGR; the numbers in BP’s most recent Statistical Review of Energy came from the WEC.

Of course, both the WEC and the BGR are largely dependent on numbers reported by national agencies (like the USGS, the EIA and the SEC in the case of the US), who compile data directly from state and regional geologic survey and mining agencies, fossil fuel consumers, producers, and the markets that they make up.

Looking back through the years at internationally reported coal reserve numbers, it’s surprisingly common to see big discontinuous revisions.  Below are a few examples from the WEC Resource Surveys going back to 1950, including some of the world’s largest supposed coal reserve holders.  In all cases, the magnitude of the large reserve revisions is much greater than annual coal production can explain.

Continue reading In Good Company: A Look at Global Coal Reserve Revisions

A Long Time Coming: Revising US Coal Reserves

In my previous post I highlighted the recent, quiet admission by the US EIA (in a fine-print footnote to Table 15 of their 2012 Annual Coal Report) that they do not know what fraction of our nation’s large store of coal resources might be economically accessible, and thus potentially classified as reserves.

CEA has long highlighted indications that a revision like this might be in the works, including in our most recent round of coal reports issued last fall (see: Warning: Faulty Reporting of US Coal Reserves).  But we’re not the only ones.  Plenty of other people have pointed out the same thing over the years.  Including…

Continue reading A Long Time Coming: Revising US Coal Reserves

US EIA on the Economics of Coal: No Comment

At the end of 2013, the US Energy Information Administration (EIA) acknowledged that it does not know whether the vast majority of US coal can be mined profitably.  If coal mining isn’t profitable, then barring some grand socialist enterprise the black stuff is probably going to stay in the ground where it belongs.

You might think this kind of revision would have warranted a press release, but the EIA’s change of heart was buried in a fine-print footnote to Table 15 of their 2012 Annual Coal Report, which tallies up all the coal resources and reserves in the US, state by state.  The new footnote says:

EIA’s estimated recoverable reserves include the coal in the demonstrated reserve base considered recoverable after excluding coal estimated to be unavailable due to land use restrictions, and after applying assumed mining recovery rates. This estimate does not include any specific economic feasibility criteria. [emphasis added]

This stands in contrast to the footnotes for the same table in their 2011 Annual Coal Report, and many prior years:

EIA’s estimated recoverable reserves include the coal in the demonstrated reserve base considered recoverable after excluding coal estimated to be unavailable due to land use restrictions or currently economically unattractive for mining, and after applying assumed mining recovery rates. [emphasis added]

Continue reading US EIA on the Economics of Coal: No Comment

Warning: Faulty Reporting on US Coal Supplies

PEAK COAL REPORT: U.S. COAL “RESERVES” ARE INCORRECTLY CALCULATED, SUPPOSED 200-YEAR SUPPLY COULD RUN OUT IN 20 YEARS OR LESS

Federal Estimates Overstate Reserves by Including Coal That Cannot Be Mined Profitably; Production Already Down in All Major Coal Mining States… And Utility Consumers Are Facing  Rising Energy Bill Prices.

Listen to Streaming Audio of the October 30 Hastings Group Media Teleconference

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WASHINGTON, D.C. – October 30, 2013 – America does not have 200 years in coal “reserves” since  much of the coal that is now left in the ground cannot be mined profitably, according to a major new report  from the Boulder, CO-based nonprofit Clean Energy Action (CEA). The CEA analysis shows that the U.S. appears to have reached its “peak coal” point in 2008 and now faces a rocky future over the next 10-20 years of rising coal production costs, potentially more bankruptcies among coal mining companies, and higher fuel bills for utility consumers.

Continue reading Warning: Faulty Reporting on US Coal Supplies