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entitled 'Air Pollution: Meeting Future Electricity Demand Will 
Increase Emission of Some Harmful Substances' which was released on 
November 12, 2002.



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Report to Congressional Requesters:



United States General Accounting Office:



GAO:



October 2002:



Air Pollution:



Meeting Future Electricity Demand Will Increase Emissions of Some 

Harmful Substances:



GAO-03-49:



Contents:



Letter:



Results in Brief:



Background:



Power Plants’ Carbon Dioxide and Mercury Emissions Will Increase by 

2020:



Alternative Assumptions Lead to Wide-Ranging Estimates of Future Carbon 

Dioxide and Mercury Emissions:



Power Plants’ Demand for Water to Meet Future Electricity Needs Should 

Not Create Shortages, but Could Influence the Location of New Plants:



Conclusions:



Recommendations for Executive Action:



Agency Comments:



Appendix I: Scope and Methodology:



Appendix II: Projected Emissions through 2020 under Four Alternative 

Cases:



Appendix III: Comments from the Energy Information 

Administration:



Appendix IV: GAO Contacts and Staff Acknowledgments:



Tables:



Table 1: Expert Advisers Who Assisted in Our Review:



Table 2: Carbon Dioxide Emissions Projections under Four 

Cases, 2000-2020:



Table 3: Mercury Emissions Projections under Four Cases, 

2000-2020:



Table 4: Projections of Emissions of Nitrogen Oxides under Four Cases, 

2000-2020:



Table 5: Sulfur Dioxide Emissions Projections under Four Cases, 2000-

2020:



Figures:



Figure 1: Electricity Supply Regions Included in EIA’s Forecasts:



Figure 2: Projected Changes in Total U.S. Electricity Generation, by 

Fuel Source, between 2000 and 2020:



Figure 3: Electricity Generators’ Projected Annual Emissions of 

Nitrogen Oxides in 2000 and 2020, by Region:



Figure 4: Electricity Generators’ Projected Annual Sulfur Dioxide 

Emissions in 2000 and 2020, by Region:



Figure 5: Electricity Generators’ Projected Annual Mercury Emissions in 

2000 and 2020, by Region:



Figure 6: Electricity Generators’ Projected Annual Carbon Dioxide 

Emissions in 2000 and 2020, by Region:



Figure 7: Percent Changes in Emissions under Three Scenarios, 2000-

2020:



Figure 8: Activities That Draw Fresh Water from Rivers, Lakes, and 

Other Sources:



Figure 9: Diagram of Electricity Generation by a Steam Turbine:



Figure 10: Water Drawn Into Power Plants for Cooling Per Unit of 

Electricity Produced, 1950 to 2020:



Abbreviations:



EIA: Energy Information Administration:



EPA: Environmental Protection Agency:



USGS: U. S. Geological Survey:



SIP: State Implementation Plan:



October 30, 2002:



The Honorable James M. Jeffords

Chairman, Committee on Environment

 and Public Works

United States Senate:



The Honorable Joseph I. Lieberman

Chairman, Subcommittee on Clean Air,

 Wetlands, and Climate Change

Committee on Environment and Public Works

United States Senate:



Electricity is critical to the nation’s economy. To generate 

electricity, power plants use a variety of fuels, including fossil 

fuels--coal, natural gas, and oil, which account for about two-thirds 

of the electricity--and nuclear fuels as well as other sources. As a 

result of the combustion process, power plants emit an array of harmful 

substances, such as carbon dioxide, mercury, nitrogen oxides, and 

sulfur dioxide, which pose human health and environmental risks, 

especially if the plants do not take steps to reduce their emissions. 

For example, carbon dioxide emissions have been linked to global 

climate change, among other effects, and exposure to mercury can lead 

to nervous system disorders and birth defects. Although regulations 

have been implemented to restrict the emission of nitrogen oxides and 

sulfur dioxide, and some power plants have installed equipment to 

reduce emissions of these substances, these emissions still contribute 

to public health problems, including respiratory illnesses and 

premature death as well as environmental problems such as acid rain 

and smog.



Environmental Protection Agency (EPA) data show that, in 1999, power 

plants were the single greatest industrial source of all four 

substances, emitting 35 percent of the nation’s carbon dioxide, 

37 percent of its mercury, 23 percent of its nitrogen oxides, and 

67 percent of its sulfur dioxide. As demand for electricity grows, 

companies not only will build new power plants, but will also continue 

operating existing plants. Some of the older existing plants do not 

have to meet the emission standards that new plants must meet. As a 

result, older plants generally emit more pollution per unit of 

electricity generated than newer plants.



Forecasts of future electricity supply and demand and associated air 

emissions are used to develop national energy and environmental 

policies, among other things. The Energy Information Administration 

(EIA) within the Department of Energy uses the National Energy Modeling 

System, a computer-based modeling system to forecast annually future 

energy supply, demand, and prices over a 20-year period. EIA’s 

forecasts depend on the specific assumptions used in the model, such as 

economic growth and world oil prices. EIA develops a “reference case” 

forecast, which uses assumptions and data on known technology, 

demographic and other trends and current laws and regulations, 

including those that limit emissions. It also develops several 

alternative forecasts, which it bases on assumptions of both higher and 

lower oil prices and economic growth, among other factors.



Because the Congress is considering various proposals for a future 

energy policy, you asked us to (1) report on EIA’s overall and region-

specific projections of emissions of carbon dioxide, mercury, nitrogen 

oxides, and sulfur dioxide from electricity-generating facilities in 

2020, and (2) determine how the emissions projections in EIA’s 

reference case would change using alternative assumptions about key 

variables, such as economic growth and fuel prices, based on 

suggestions by expert advisers we contacted. In addition, because power 

plants use large amounts of water during the process of generating 

electricity, you asked us to determine how future electricity demand 

might affect future water demand and supply.



To address these issues, we analyzed EIA’s reference case forecast of 

future electricity demand and associated air emissions contained in its 

Annual Energy Outlook 2002 and supporting studies. Our analysis focused 

on EIA’s estimates of electricity and emissions from electric utility 

power plants and excludes industrial and other facilities that produce 

electricity as a by-product of their operations, which they then sell 

to utilities for distribution. To advise us in our analysis, we 

contacted a wide range of individuals with experience in modeling 

electricity generation and its environmental effects, including staff 

of EPA and the Department of Energy, and representatives of 

environmental organizations, consulting firms, research and academic 

institutions, and the electric generation industry (see app. I). We 

asked these individuals, who were most frequently identified by their 

peers as knowledgeable in a particular field, to review EIA’s model and 

supporting documentation and suggest any alternative assumptions, such 

as the rate of future economic growth or fuel price increases, that 

they thought were more likely than those included in EIA’s reference 

case, based on their expertise in energy modeling and related topics. 

We selected EIA’s reference case because, according to EIA, it presents 

a “business-as-usual” forecast, based on known technology, demographic 

and other trends, and current laws and regulations. We then asked EIA 

to rerun its model substituting alternative assumptions based on the 

advisers’ suggestions and analyzed the results. We did not attempt to 

evaluate EIA’s model or determine which set of assumptions was the most 

likely to occur. Finally, we obtained and analyzed data on power 

plants’ water use and developed estimates of future water demand based 

on EIA’s forecasts of electricity production. Our review was conducted 

from October 2001 through October 2002 in accordance with generally 

accepted government auditing standards. Appendix I contains additional 

information regarding our methodology.



Results in Brief:



EIA’s reference case shows that electricity generation will increase 

overall by 42 percent from 2000 through 2020 and that power plants will 

emit 800 million tons (or 35 percent) more carbon dioxide and 4 tons 

(or 9 percent) more mercury per year by 2020 than they did in 2000. 

This anticipated increase in emissions would result from power plants’ 

increased use of fossil fuels to meet anticipated demand and the 

general absence of federal or state regulations establishing emissions 

standards for carbon dioxide and mercury from power plants. The 

projected mercury emissions could decrease, however, once EPA proposes 

mercury limits, which are required by 2004. In contrast, EIA forecasts 

that by 2020 power plants’ total emissions of nitrogen oxides and 

sulfur dioxide will decrease nationwide by about 100 thousand tons 

(2 percent) and about 2 million tons (19 percent), respectively. This 

expected decline in emissions results from the anticipated need for 

power plants to meet projected increases in electricity demand while 

complying with clean air regulations. This will necessitate building 

new plants that emit relatively lower levels of these pollutants and 

installing emissions controls at some existing plants. Such practices 

would coincidentally reduce mercury emissions, explaining in part why 

EIA’s model projects a smaller increase in emissions of mercury than 

carbon dioxide. Despite these overall declines, EIA forecasts that 

emissions of nitrogen oxides and sulfur dioxide will increase in some 

regions of the country. Such regional increases may complicate efforts 

to improve air quality and curb acid rain in the areas where pollutants 

are emitted as well as in adjacent areas where they may spread via wind 

currents. EIA forecasts that mercury emissions may increase in some 

areas and decrease in others, depending on the amount of coal used, 

while carbon dioxide emissions will increase nationwide.



EIA modeled three additional cases using alternative assumptions that 

adjusted the model’s values for electricity demand and natural gas 

prices to address uncertainties identified by our advisers. Like the 

reference case, these alternatives showed that, from 2000 through 2020, 

annual carbon dioxide and mercury emissions from power plants would 

rise in all cases, although at different rates than EIA’s reference 

case. EIA’s modeling also showed that emissions of nitrogen oxides and 

sulfur dioxide would decrease under all alternatives. Specifically, the 

modeling showed that:



* carbon dioxide emissions could increase between 659 million tons 

(28 percent) and 1,129 million tons (48 percent);



* mercury emissions could increase between 5,700 pounds (7 percent) and 

17,000 pounds (21 percent);



* emissions of nitrogen oxides could decrease between 41 thousand tons 

(1 percent) and 204 thousand tons (5 percent); and:



* sulfur dioxide emissions could decrease about 2.1 million tons 

(19 percent) under all three alternatives, because federal emissions 

limits apply under all alternatives.



The modeling also showed that emissions of nitrogen oxides and sulfur 

dioxide could increase in some areas, despite the projected decreases 

nationwide. Separately, in working with EIA’s model we found that the 

agency had not used the most current data on certain emissions limits, 

although this had a limited impact on the emissions forecasts. We are 

making a recommendation to the Administrator of EIA to update these 

data in the model.



Depending on the type of technology installed, as power plants increase 

production to meet EIA’s forecast electricity demand, we estimate that 

they will use a total of between 3 percent less and 17 percent more 

water per year by 2020. However, we also estimate that they will use 

less water for each unit of electricity produced than they currently do 

primarily because some will install new technologies that require less 

water. The future water use is not likely to pose shortages for most 

areas because state and local authorities must ensure that communities 

will have an adequate water supply before approving new power plants. 

Nevertheless, future water use could have some impact on companies’ 

decisions about where to locate new plants and what type to build. For 

example, when deciding whether it is economically feasible to build a 

new plant in a particular location, developers must consider, among 

other things, the cost of obtaining the needed water or using 

alternative technologies that require little water. Such alternatives 

could increase construction costs and consume 2 percent to 10 percent 

of the power generated by the plant. Finally, while future water use 

may not affect a locality’s water supply, it may affect the ecosystems 

that depend on that water. For example, if water discharged from a 

power plant to a body of water has an elevated temperature, it could 

potentially harm aquatic organisms and habitats downstream. EPA has 

developed regulations to address some of these potential effects.



EIA generally agreed with the findings, conclusions, and 

recommendations of the report, but suggested a number of technical 

changes, which we have incorporated as appropriate.



Background:



The Department of Energy Organization Act of 1977 requires EIA to 

prepare annual reports including information on trends and projections 

for energy use and supply. EIA develops the annual forecasts using the 

National Energy Modeling System, a computer-based model, and publishes 

the results in the Annual Energy Outlook. Using the model, EIA projects 

energy supply and demand and air emissions, among other things, over a 

20-year period. EIA develops 30 cases with alternative assumptions 

about economic growth, world oil prices, and electricity demand growth, 

among other factors, to address the uncertainties inherent in mid-to 

long-term forecasting. EIA’s 2002 projections are based on federal, 

state, and local laws and regulations in effect on September 1, 2001, 

and on data current as of July 31, 2001.



EIA forecasts electricity generation and emissions levels for 13 

electricity supply regions (see fig. 1).[Footnote 1]



Figure 1: Electricity Supply Regions Included in EIA’s Forecasts:



[See PDF for image]



Source: GAO characterization of information from the Energy 

Information Administration’s Office of Integrated and Forecasting.



[End of figure]



EIA’s projections of emissions are influenced by existing laws and 

regulations that address air pollution. For example, to help limit 

emissions and protect air quality, EPA, under the Clean Air Act, 

regulates emissions of nitrogen oxides and sulfur dioxide from a 

variety of sources, including power plants that burn fossil-fuels. 

Under the Clean Air Act, EPA requires new sources of air pollution 

within certain industries to meet federal standards. The standards do 

not apply to older power plants built before August 17, 1971, that have 

not been modified, although some older plants have taken steps to meet 

the standards. But, when older plants make “major modifications” that 

significantly increase their emissions, they must install modern 

pollution controls under the requirements of a program called New 

Source Review. EPA currently does not regulate carbon dioxide or 

mercury emissions from power plants, although it plans to issue mercury 

regulations in 2004.



Power plants must limit their emissions of nitrogen oxides and sulfur 

dioxide under the acid rain provisions of the Clean Air Act Amendments 

of 1990. To achieve reductions in emissions of nitrogen oxides, the 

provisions allowed companies with multiple power plants to meet the set 

limits by calculating the average of their total emissions across two 

or more plants and ensuring that the average did not exceed the limits. 

This averaging in effect allows some individual power plants to 

continue emitting at levels above the limits.



In contrast, the provisions directed EPA to reduce emissions of sulfur 

dioxide from electricity generating units by setting a nationwide 

limit, known as a “cap,” on emissions from all power plants, not by 

setting limits for individual plants, and establishing an emissions-

trading program. Under this program, each plant receives a number of 

emissions “allowances” which each represent the right to emit one ton 

of sulfur dioxide. The allowances may be bought, sold, or banked for 

use in later years, but power plant owners or operators must own enough 

allowances at the end of each year to cover their annual emissions.



In addition, EPA has established air quality standards for six 

principal pollutants including nitrogen dioxide (one of the nitrogen 

oxides), sulfur dioxide, and ground-level ozone.[Footnote 2] These 

“national ambient air quality standards” seek to protect public health 

by limiting the allowable level of these pollutants in the air. To 

assist in meeting the ozone standard, EPA has issued two related 

regulations that further limit emissions of nitrogen oxides. In October 

1998, EPA issued a final rule requiring certain states to revise their 

state implementation plan (SIP) measures to impose additional controls 

on emissions of nitrogen oxides to mitigate ozone transport in the 

eastern United States.[Footnote 3] The rule--known as the NOx SIP call-

-set stringent caps on emissions of nitrogen oxides in 22 midwestern 

and eastern states (as well as the District of Columbia) during the 

summer.[Footnote 4] In January 2000, EPA issued another rule--known as 

the Section 126 rule--in response to petitions from 8 northeastern 

states that the emissions of nitrogen oxides from coal-fired power 

plants in 12 upwind states and the District of Columbia were being 

transported by wind patterns into their states, complicating their 

efforts to meet national air quality standards for ground-level ozone. 

The rule required 392 facilities in the upwind states to reduce annual 

emissions of nitrogen oxides and established a cap-and-trade program 

for emissions within each of those states.[Footnote 5]



Power Plants’ Carbon Dioxide and Mercury Emissions Will Increase by 

2020:



EIA’s reference case forecasts that, overall, as generators increase 

electricity production to meet rising demand over the next two decades, 

emissions of carbon dioxide and mercury from power plants nationwide 

will increase, while their emissions of nitrogen oxides and sulfur 

dioxide will decrease. On a regional basis, EIA forecasts that power 

plants’ emissions of mercury, nitrogen oxides, and sulfur dioxide will 

increase in some portions of the country and decrease in others. Carbon 

dioxide emissions will increase in all areas. These variations in 

emissions may complicate some regions’ efforts to control their 

pollution and reduce the associated risks.



Carbon Dioxide and Mercury Emissions Are Expected to Increase Overall 

While Nitrogen Oxides and Sulfur Dioxide Decrease:



EIA’s reference case forecasts that, from 2000 through 2020, 

electricity generation will increase by 42 percent (see fig. 2), from 

3.5 trillion kilowatt hours in 2000 to almost 5 trillion kilowatt hours 

in 2020. As this figure also shows, the largest increase in electricity 

generation--240 percent--will come from power plants that burn natural 

gas.



Figure 2: Projected Changes in Total U.S. Electricity Generation, by 

Fuel Source, between 2000 and 2020:



[See PDF for image]



Note: Renewable sources include, among others, hydropower, solar, and 

wind energy.



Source: GAO analysis of EIA data.



[End of figure]



In response, EIA expects power plants’ annual emissions of carbon 

dioxide to increase nationally by about 800 million tons (35 percent), 

from 2.4 billion tons in 2000 to 3.2 billion tons in 2020. Similarly, 

EIA forecasts that plants’ annual mercury emissions will increase by 

about 4 tons (9 percent), from about 40 tons in 2000 to about 44 tons 

in 2020. EPA plans to issue regulations limiting mercury emissions from 

power plants in 2004, which could reduce emissions below the projected 

levels. The expected increase in carbon dioxide and mercury will result 

primarily from a projected increase in electricity generation from 

fossil fuels. For example, natural gas and coal emit large amounts of 

carbon dioxide when burned and coal emits mercury. In addition, these 

emissions from power plants will increase because there are no federal 

or state limits on them, with the exception of Maine’s mercury emission 

standard. EIA projects that 88 percent of the 355 gigawatts of new 

generating capacity needed by 2020 will be fueled by natural gas and 

another 9 percent by coal.[Footnote 6] These two fuels are expected to 

account for 99 percent of the carbon dioxide emissions from all 

electricity production in 2020. Even though mercury emissions from 

power plants are not currently federally regulated, they are not 

expected to increase substantially in the future in part because 

certain measures that generators take to limit emissions of nitrogen 

oxides and sulfur dioxide--such as switching to cleaner fuels and 

installing emissions control technologies--also coincidentally reduce 

power plants’ mercury emissions.



In contrast to the growth of carbon dioxide and mercury emissions, EIA 

forecasts that, by 2020, power plants’ annual emissions of nitrogen 

oxides will decline from 2000 levels by about 100 thousand tons 

(2 percent), from about 4.3 million tons to about 4.2 million tons, and 

sulfur dioxide emissions will decrease by about 2 million tons 

(19 percent), from 11 million tons to about 9 million tons. Emissions 

of nitrogen oxides and sulfur dioxide decline, despite increases in 

electricity generation, primarily because federal and state regulations 

limit power plants’ emissions of these substances. As generators build 

additional plants and make major modifications to expand capacity at 

existing plants to meet growing electricity demand over the next 20 

years, they must also comply with these limits. To limit emissions from 

new plants, generators are expected to build both new natural gas-and 

coal-burning power plants that will include emission control 

technologies. To limit emissions at some existing plants, generators 

will continue to switch to cleaner fuels--such as coal that contains 

less sulfur--and install technologies to control these emissions.



Some Areas of the Country Will Face Increased Emissions:



Although EIA forecasts that aggregate annual emissions of nitrogen 

oxides and sulfur dioxide will decrease nationally by 2020, it projects 

that emissions of both of these pollutants will increase in some 

regions of the country and decrease in others. For example, EIA expects 

emissions of nitrogen oxides to decrease in 7 of the 13 electricity 

supply regions (see fig. 3).



Figure 3: Electricity Generators’ Projected Annual Emissions of 

Nitrogen Oxides in 2000 and 2020, by Region:



[See PDF for image]



Source: GAO analysis of EIA data.



[End of figure]



EIA expects power plants in the Mid-Atlantic area of the United States 

to experience the smallest decrease in annual emissions of nitrogen 

oxides--6 thousand tons, or 3 percent--and plants in the East Central 

area to experience the largest decrease--182 thousand tons, or 

16 percent. However, EIA projects that emissions of nitrogen oxides 

will increase in 6 regions:



* California (10 thousand tons, or 11 percent);



* the Lower Midwest (11 thousand tons, or 4 percent);



* the Northwest (32 thousand tons, or 20 percent);



* the Southwest (34 thousand tons, or 15 percent);



* the Western Great Lakes (44 thousand tons, or 13 percent); and:



* the Upper Midwest (60 thousand tons, or 23 percent).



Similarly, EIA projects that annual sulfur dioxide emissions from power 

plants will decline in 10 of the 13 regions by 2020 (see fig. 4).



Figure 4: Electricity Generators’ Projected Annual Sulfur Dioxide 

Emissions in 2000 and 2020, by Region:



[See PDF for image]



Source: GAO analysis of EIA data.



[End of figure]



The smallest decrease--1 thousand tons (under 1 percent)--is expected 

to occur in the Southwest and the largest decrease--950 thousand tons 

(29 percent)--is expected in the East Central area of the country. 

However, power plants’ annual emissions of sulfur dioxide are expected 

to increase in three regions:



* Texas (28 thousand tons, or 8 percent);



* the Lower Midwest (33 thousand tons, or 8 percent); and:



* the Upper Midwest (38 thousand tons, or 8 percent).



According to EIA, decreases in mercury emissions will range from about 

335 pounds (20 percent) in the New York State area to about 821 pounds 

(17 percent) in Texas (see fig. 5).



Figure 5: Electricity Generators’ Projected Annual Mercury Emissions in 

2000 and 2020, by Region:



[See PDF for image]



Source: GAO analysis of EIA data.



[End of figure]



Furthermore, EIA expects mercury emissions to increase in all but 

3 regions, with the smallest increases--about 30 pounds (3 percent)--

occurring in New England and California, and the largest increase--

about 2,600 pounds (13 percent)--in the Southeast.



In contrast, EIA forecasts that carbon dioxide emissions will increase 

both nationwide and in all regions (see fig. 6).



Figure 6: Electricity Generators’ Projected Annual Carbon Dioxide 

Emissions in 2000 and 2020, by Region:



[See PDF for image]



Source: GAO analysis of EIA data.



[End of figure]



EIA projects that increases in carbon dioxide emissions are likely to 

range from a low of 6 million tons (15 percent) in the New York state 

area to as much as 200 million tons (40 percent) in the Southeast.



Regional variations in emissions of these four substances result 

primarily from (1) differences in electricity demand, which largely 

determines where new generating capacity will be added, and (2) power 

plants’ interactions across regions within the emissions-trading 

program. As electricity demand increases in one region, generators will 

expand capacity at existing plants and build additional plants to meet 

that demand. Consequently, emissions are likely to increase in those 

regions where capacity is expanded. To comply with federal and state 

limits on emissions of nitrogen oxides and sulfur dioxide, generators 

in those regions will, among other things, purchase emissions credits 

from other plants, some of which may be in other regions, to offset the 

increases. This typically requires that the plant selling emissions 

credits either add emissions controls or switch to cleaner fuels, 

thereby reducing emissions in that region. Accordingly, emissions of 

nitrogen oxides and sulfur dioxide may increase in the region with the 

new plants and decrease in the region where emissions credits were 

purchased. In contrast, because there are no federal or, in most cases, 

state limits on carbon dioxide or mercury emissions from power plants, 

these emissions are generally expected to increase, both nationally and 

regionally, with the expansion of generating capacity. However, plants 

adding pollution controls to reduce sulfur dioxide and nitrogen oxides 

in some regions would also remove some mercury as a side benefit, 

thereby decreasing mercury emissions in those regions.



Alternative Assumptions Lead to Wide-Ranging Estimates of Future Carbon 

Dioxide and Mercury Emissions:



In addition to the alternative cases that EIA runs each year as part of 

its forecasts, we asked EIA to model three other cases using different 

values for electricity demand and fuel prices. These cases showed that, 

between 2000 and 2020, annual carbon dioxide and mercury emissions from 

power plants would rise under all alternatives, although mercury 

emissions would decrease in some regions. The modeling showed overall 

decreases in nitrogen oxides and sulfur dioxide under all alternatives, 

although these emissions will increase in some regions. Separately, we 

found that EIA had not used the most current data on certain emissions 

limits, which would have only a modest impact on estimates.



Most of the Advisers Agreed with EIA’s Modeling Methodology but 

Questioned Electricity Demand and Fuel Price Assumptions:



The majority of our advisers described EIA’s modeling methodology as 

sound and suitable for forecasting future electricity generation and 

emissions, but they did not always agree with EIA’s values for two of 

the key drivers of emissions forecasts--electricity demand and fuel 

prices. They also said that forecasting is imprecise and that it is 

difficult to know which modeling assumptions are most appropriate. Some 

of the advisers provided alternative assumptions, which varied widely, 

causing most estimates of future emissions to also vary.



EIA’s reference case forecasts that electricity demand will increase by 

an average of 1.8 percent a year between 2000 and 2020. Advisers’ 

alternatives ranged from an annual increase of 1.25 percent (about 

31 percent lower than EIA’s estimate) to 2.1 percent (about 17 percent 

higher than EIA).[Footnote 7] Of the six advisers who provided 

alternatives, three said that EIA’s electricity demand estimates were 

too high; one agreed with EIA; one said that demand would be equal to 

or greater than EIA’s estimate; and one said that EIA’s estimate was 

too low. Demand could be higher, according to one adviser, if new 

technologies that use electricity, such as electricity-based 

transportation, are widely adopted. Another adviser predicted lower 

increases in demand than EIA and said the actual numbers will depend 

primarily on energy efficiency policies and economic growth. EIA’s 

analysis of the accuracy of its last 10 annual forecasts found that it 

underestimated electricity demand 96 percent of the time, with an 

average error of about 4 percent. Because some air emissions increase 

with rising electricity demand, underestimating demand can lead EIA’s 

model to underestimate emissions also.



Several advisers raised questions as well about EIA’s forecasts of 

natural gas prices. Two of the advisers said that EIA’s methodology 

overstated the future price of natural gas. Another said prices were 

too low and that EIA’s methodology did not capture the likely 

volatility in gas prices and future supply constraints that could occur 

as more gas is used to generate electricity. This expert suggested that 

EIA perform additional sensitivity analyses to address gas price 

uncertainties.



EIA’s analysis of the accuracy of its past forecasts also indicates 

that, of all its fuel price forecasts, those for natural gas have been 

the least accurate, deviating from actual prices by an average of 

19 percent in the last ten forecasts, with a tendency to overestimate 

(58 percent of the time) rather than underestimate (42 percent of the 

time) prices. According to an EIA official, higher gas prices would 

make new natural gas plants less economical and could likely lead to 

the construction of more new coal plants in the future to meet demand 

for additional electricity generating capacity. This in turn would lead 

to higher emissions, particularly for carbon dioxide. Therefore, 

overestimating gas prices could also lead to overestimating emissions.



EIA’s Model Had Outdated Information on Certain Emissions Limits, Which 

Had Little Effect on Emissions Projections:



Our review of EIA’s modeling found that it included outdated 

information on regulations limiting emissions of nitrogen oxides. EIA 

used preliminary data on limits for emissions of nitrogen oxides that 

will take effect in 19 states and the District of Columbia beginning in 

2004. As a result, EIA used a 488,000 ton overall limit in its forecast 

instead of the 473,000 ton final limit, which was published in the 

Federal Register. An EIA official responsible for the model’s emissions 

data said that while they met with industry experts--including EPA 

staff--in developing their analyses, these final changes were not 

brought to their attention. According to this official, because of the 

relatively small change--a 3 percent decline--updating the information 

would slightly reduce the model’s projected emissions of nitrogen 

oxides. He said EIA would update the information in the model for 

future forecasts.



In addition, our review of EIA’s model found that it included data on 

the costs and performance characteristics of equipment that power 

plants use to control nitrogen oxides that were from a 1996 EPA study. 

An EPA contractor updated this information in 2001 based on information 

provided by control equipment suppliers and experience gained through 

more than 200 installations of the equipment. The cost data fell within 

the ranges reported in similar studies. EIA found that industry groups 

and experts in the Department of Energy believed that the cost of 

installing equipment with the performance characteristics described in 

the study would be higher than reported. As a result, EIA continued 

using the earlier cost and performance estimates. The EIA official 

responsible for the model’s emissions data said that the agency agrees 

with EPA’s updated performance data but would use higher cost data for 

future analyses.



Modeling with Revised Electricity Demand and Natural Gas Price Data 

Leads to Wide-Ranging Estimates of Carbon Dioxide Increases:



EIA prepared for us three alternative emissions projections to its 

reference case by running its model with updated information on 

pollution control costs and emissions limits as well as revised 

assumptions to address the electricity demand and fuel price 

uncertainties identified by the advisers. The first alternative--the 

“revised reference case”--substituted updated information on limits and 

costs for controlling emissions of nitrogen oxides. The second 

alternative--the “high emissions case”--also substituted assumptions 

about economic growth and technological change that, in turn, increased 

electricity demand and the price of natural gas. The third alternative-

-the “low emissions case”--substituted assumptions that lowered 

electricity demand and natural gas prices.



Nationally, these analyses show that increases in carbon dioxide and 

mercury emissions could vary widely in the future, depending on the 

assumptions used, while decreases in emissions of nitrogen oxides and 

sulfur dioxide would be unlikely to vary significantly from EIA’s 

reference case because of regulations that limit these emissions. 

Specifically, the modeling showed that between 2000 and 2020:



* Carbon dioxide emissions could increase by between 659 million tons 

(28 percent) in the low emissions case and 1,129 million tons 

(48 percent) in the high emissions case, compared to 827 million tons 

(35 percent) in EIA’s reference case. The variation from the reference 

case results from differences in the demand for electricity in each 

case and the amount of electricity generated from each fossil fuel. 

Natural gas has about 40 percent less carbon dioxide per unit of energy 

than coal, so carbon dioxide emissions from natural gas combustion are 

proportionately lower.



* Mercury emissions could increase by between 5,700 pounds (7 percent) 

in the low emissions case and 17,000 pounds (21 percent) in the high 

emissions case, compared to about 7,200 pounds (9 percent) in EIA’s 

reference case. Mercury emissions increase in relation to the amount of 

electricity generated by coal plants.



* Emissions of nitrogen oxides could decrease by between 41,000 tons 

(1 percent) in the high emissions case and 204,000 tons (5 percent) in 

the low emissions case, compared to 104,000 tons (2 percent) in EIA’s 

reference case. The nitrogen oxides estimates do not vary significantly 

from the reference case due to existing control programs and the fact 

that new plants are expected to be very clean.



* Sulfur dioxide emissions would decrease by about 2.1 million tons 

(19 percent) in all cases because the Clean Air Act Amendments of 1990 

call for reductions in annual sulfur dioxide emissions from electricity 

generators.[Footnote 8]:



Figure 7 compares the national results of the low and high emissions 

cases with EIA’s reference case.



Figure 7:  Percent Changes in Emissions under Three Scenarios, 2000-

2020:



[See PDF for image]



Source: GAO Analysis of EIA data.



[End of figure]



Under all three alternatives, carbon dioxide would increase in all 

regions but the magnitude of the increases would vary widely. (App. II 

contains a summary of the regional emissions projections for the 

reference case and the three alternative cases). For example, annual 

emissions in the Southeast would increase from about 153 million 

(30 percent) in the low emissions case to 300 million tons (59 percent) 

in the high emissions case, while those in New England would increase 

from about 4 million (9 percent) in the low emissions case to 17 

million tons (36 percent) in the high emissions case. For all three 

alternatives, the Southeast and East Central regions would have the 

largest emissions increases because these areas are projected to have 

the largest increases in fossil-fuel generation, while New England and 

New York would have the smallest emissions increases.



Mercury emissions would increase in 10 of the 13 regions in the revised 

reference case and the low emissions case, and in 12 of the 13 regions 

in the high emissions case. The Southeast region has the largest 

expected increases in emissions and coal-fired generation. Only Texas 

would have emissions decreases across all three alternatives, ranging 

from about 1,008 pounds (20 percent) to 1,199 pounds (24 percent).



Even though nationally, emissions of nitrogen oxides would decrease, 

regionally they would increase in six areas under all three 

alternatives--California, Lower Midwest, Northwest, Southwest, Upper 

Midwest, and Western Great Lakes--with the magnitude of the increases 

varying by region and alternative. The Upper Midwest region would have 

the largest increase--ranging from about 56,000 tons (22 percent) to 

66,000 (25 percent). The alternative modeling showed increased 

generation from fossil fuels in each of these regions, which may 

explain the projected emissions increases.



Similarly, while sulfur dioxide emissions are expected to decrease 

nationally, they would increase in the Lower Midwest and Upper Midwest 

regions despite the federal limits. Emissions would decrease in 8 of 

the 13 regions under all 3 alternatives. These trends likely hinge on 

the national trading program for sulfur dioxide emissions, whereby 

plants in some regions would control their emissions and sell excess 

emissions credits to plants in other regions.



EIA has modeled additional cases that project far lower emissions than 

those presented in its reference case or the three cases EIA prepared 

for us. For example, for an October 2001 report, EIA modeled a case 

based on assumptions of policies and programs that would promote clean 

energy technologies and further reductions in emissions of carbon 

dioxide, mercury, nitrogen oxides, and sulfur dioxide. This case showed 

that, by 2020, emissions of carbon dioxide would be 48 percent lower, 

mercury 90 percent lower, nitrogen oxides 61 percent lower, and sulfur 

dioxide 76 percent lower than in EIA’s reference case.



Power Plants’ Demand for Water to Meet Future Electricity Needs Should 

Not Create Shortages, but Could Influence the Location of New Plants:



Electricity generation requires more fresh water than all other sectors 

of the economy except agriculture, according to data from the 

U.S. Geological Survey (USGS). Power plants’ water requirements will 

likely rise as demand for electricity grows over the next two decades. 

However, the amount of water needed to generate each unit of 

electricity would likely decrease because companies are expected to 

install new technologies that require less water. The total increase in 

water use is not likely to have an impact on most communities’ supplies 

because state and local authorities protect certain uses, such as for 

drinking water, when approving the construction of new power plants in 

their areas. Nevertheless, the increase could influence companies’ 

decisions regarding the locations and types of new plants and may 

affect aquatic ecosystems.



Overall, Power Plants May Need More Water to Operate in 2020 than 2000, 

but They Are Expected to Use Less Water per Unit of Electricity 

Produced:



Power plants draw the second largest amount of fresh water from rivers, 

lakes, and other sources each year--48.2 trillion gallons--according to 

1995 USGS data. Only agricultural activities draw more fresh water 

(see fig. 8).



Figure 8: Activities That Draw Fresh Water from Rivers, Lakes, and 

Other Sources:



[See PDF for image]



Note: “Other” activities include such uses as domestic, commercial, and 

mining activities. Percentages are national averages.



Source: USGS, 1995 data are the most current available.



[End of figure]



Nationwide, power plants also use five times more fresh water than 

households use for purposes such as drinking, preparing food, 

and bathing.



Power plants consume only about 3 percent of the water they draw from a 

particular source during the process of generating electricity; in 

contrast, agriculture consumes 61 percent. To generate electricity, 

most power plants burn a fuel to heat water and create steam (see fig. 

9).



Figure 9: Diagram of Electricity Generation by a Steam Turbine:



[See PDF for image]



Source: Environmental Protection Agency.



[End of figure]



The steam flows through a turbine connected to a generator, which turns 

the blades and produces electricity. The steam leaving the turbine is 

carried through pipes, which pass through circulating water. The steam 

then condenses back into a liquid as the heat is transferred to the 

water. This water, in turn, flows to a cooling tower, where the heat 

dissipates through contact with the air, and then recirculates to 

condense the steam again. This type of system is known as a “wet-

cooling” system. Some cooling systems pass the cooling water over the 

steam pipes once, and then discharge it back to its source or the 

community’s local sewer system, where the water can be treated and used 

for other purposes. Such systems draw in 98 percent more water than a 

recirculating system.



Given these cooling processes, we estimate that power plants will need 

between 94 billion gallons less water (a reduction of 3 percent) per 

year by 2020 and 576 billion gallons more water (an increase of 

17 percent) to meet EIA’s reference case projections of future 

electricity demand. The lower estimate assumes all the additional 

demand is met with a cooling technology that uses significantly less 

water, and the higher number assumes it is met with recirculating wet-

cooling systems. Plants will likely use a combination of the two 

systems. Regardless, newer technologies will allow plants to consume 

less water per unit of electricity produced than they currently do. 

Such reductions in water use would follow a trend that has been 

underway since the 1950s (see fig. 10).



Figure 10: Water Drawn Into Power Plants for Cooling Per Unit of 

Electricity Produced, 1950 to 2020:



Note: Amounts for 2000 and 2020 are GAO estimates.



[See PDF for image]



Source: GAO analysis of USGS data.



[End of figure]



The Potential Need for More Water Should Not Threaten Local Supplies, 

but Could Affect Where New Plants Are Built:



The overall increase in the volume of water used by power plants is 

unlikely to cause supply shortages for most communities. Companies 

generally must obtain state and local approval to withdraw water and a 

permit to discharge it back to the water source or a local sewer system 

before they can begin construction. In granting the approvals and 

permits, the water authority usually must ensure that the plants’ water 

use will not adversely diminish regional or local water supplies. To 

help make this determination, some states are establishing water 

“budgets” that allocate water resources to ensure supplies for drinking 

water and other critical activities will remain adequate in the future.



On the other hand, future water use could affect decisions about where 

to build new plants. When making these decisions, companies must 

consider whether sufficient water is available at a particular location 

and whether the cost of withdrawing and discharging the water is 

prohibitive. Companies consider these costs, along with other important 

factors--such as the anticipated demand for electricity, the proximity 

to fuel and transmission lines, and the expected selling price for the 

electricity--to determine whether building a plant in a particular 

location would be profitable.



If companies anticipate water supply problems, they may consider using 

alternative supplies or installing technologies that use less water. 

For example, 0.5 percent of existing power plants use recycled 

wastewater, typically in areas where sufficient water supplies are not 

available. California has begun requiring companies to evaluate the 

feasibility of using recycled wastewater before approving other water 

sources. While a viable alternative, there must be sufficiently large 

quantities of wastewater available to meet the power plant’s needs. In 

addition, plants must treat the wastewater to remove nutrients and 

minerals that can foul equipment and decrease cooling efficiencies, and 

these treatment costs add to a plant’s operating costs.



Nearly another 2 percent of existing plants have adopted a technology 

known as “dry” cooling, which uses outside air, rather than water, to 

cool the steam produced in the plant. Dry-cooling systems can reduce 

water use by 90 percent to 95 percent compared to wet-cooling systems 

that use the water only once. However, they can cost 2 to 3 times more 

to construct than wet recirculating systems. They can also cost 

significantly more to operate because the fans and other necessary 

equipment can themselves consume from 2 percent to 10 percent of the 

electricity generated by the plant. These additional costs can make a 

dry-cooling system economically infeasible in some locations.



Although plants’ future water use may not affect local water supply, it 

can have ecological effects on the original water sources. For example, 

pulling water into a plant can kill fish, and discharging water with 

elevated temperatures back to its source can damage aquatic organisms 

and habitats. However, EPA has developed regulations for new plants and 

is developing regulations for existing plants that specify the maximum 

rates that plants can take water into the cooling system, among other 

requirements. EPA has also proposed that existing plants upgrade their 

cooling systems when economically feasible. For example, EPA has 

proposed that a plant in Massachusetts reduce the amount of heated 

water discharged by almost 96 percent, or approximately 1 billion 

gallons per day, in order to lessen the effects on marine life.



Conclusions:



EIA’s forecasts of the future electricity supply and demand as well as 

associated air emissions are important for developing national energy 

and environmental policies. Both the administration and the Congress 

have often relied on EIA’s expertise in modeling and forecasting to 

assist them in making decisions about such key policies. Most of the 

advisers whom we consulted agreed that EIA’s modeling methodology is 

sound and suitable for forecasting future electricity generation and 

emissions. And while the advisers disagreed with some of EIA’s values 

for future electricity demand and fuel price trends, they and EIA 

recognize that forecasting is imprecise and that it is difficult to 

determine which modeling assumptions are most appropriate. 

Nevertheless, regardless of which set of alternatives becomes reality, 

the modeling shows that the country will face elevated levels of carbon 

dioxide emissions and potentially mercury emissions. In addition, 

certain regions of the country will be exposed to higher levels of 

emissions of nitrogen oxides and sulfur dioxide, even though on a 

national basis, the levels will decrease. Finally, as EIA continues to 

assess its modeling accuracy and refine its methodology accordingly, it 

is important that the agency use the most current data available. This 

includes data on any federal and state regulations that set limits on 

emissions, helping to ensure more accurate future estimates.



Recommendations for Executive Action:



To ensure that future forecasts of electricity generation and related 

environmental effects are as accurate and useful as possible, we 

recommend that the Administrator, EIA, work with EPA and states to 

ensure that the agency incorporates the most current information on 

regulatory limits for certain emissions, such as nitrogen oxides, into 

the modeling of its electricity and emissions projections.



Agency Comments:



EIA provided written comments on a draft of this report. These comments 

are reprinted in appendix III. EIA generally agreed with the findings, 

conclusions, and recommendations of the report, but believed that there 

were areas of the draft report that readers might misunderstand without 

additional information. In this regard, EIA suggested a number of 

technical changes and clarifications, which we have incorporated as 

appropriate. Despite general agreement with the report, EIA disagreed 

with what it characterized as the report’s assertion that EIA’s 

projections were based on outdated information on the costs of 

equipment used to control emissions of nitrogen oxides. However, we 

believe the report had already appropriately acknowledged the basis for 

EIA’s decision to continue to use 1995 data on control costs rather 

than EPA’s more recent 2001 data. EIA made this decision primarily 

because certain industry representatives and EIA advisers thought EPA’s 

data underestimated these costs. However, because the 1995 data used in 

the model underestimated these costs to an even greater degree, we 

asked EIA to incorporate the more recent data for the three alternative 

emissions projections the agency prepared for us. In addition, the 

Department of Energy’s Office of Energy Efficiency and Renewable Energy 

suggested a number of technical changes, which we have included as 

appropriate.



As agreed with your offices, unless you publicly announce the contents 

of this report earlier, we plan no further distribution until 10 days 

from the report date. At that time, we will send copies to the Chairman 

and Ranking Minority Member of the House Committee on Energy and 

Commerce and its Subcommittee on Energy and Air Quality; the House 

Committee on Government Reform and its Subcommittee on Energy Policy, 

Natural Resources, and Regulatory Affairs; the Ranking Minority Member 

of the Senate Committee on Environment and Public Works, and its 

Subcommittee on Clean Air, Wetlands, and Climate Change; other 

interested members of Congress; the Administrator, EIA; the 

Administrator, EPA; the Secretary of Energy; the Director of the Office 

of Management and Budget; and other interested parties. We will also 

make copies available to others upon request. In addition, the report 

will be available at no charge on GAO’s Web site at http://www.gao.gov.



If you have any questions about this report, please contact me at (202) 

512-3841. Key contributors to this report are listed in appendix IV.



Signed by John B. Stephenson:



John B. Stephenson

Director, Natural Resources and Environment:



[End of section]



Appendix I: Scope and Methodology:



To address the first objective, we analyzed EIA’s reference case 

projections of future electricity demand and associated air emissions 

of carbon dioxide, mercury, nitrogen oxides, and sulfur dioxide, on a 

national and regional basis. To obtain this information, we met with 

EIA officials responsible for the forecasting model and related 

emissions projections and reviewed relevant EIA analyses. We focused on 

EIA’s reference case, which accounts for the construction of additional 

power plants to meet anticipated electricity demand between 2000 and 

2020, as well as the retirement of those plants that it projects will 

become economically unviable.



To address the second objective, we relied on expert advisers who 

identified alternative assumptions for EIA’s model. We identified the 

advisers using an iterative process (referred to as the “snowball” 

technique). We first contacted EIA officials responsible for the 

agency’s National Energy Modeling System and its emissions projections 

to identify individuals within the government, electricity industry, 

environmental organizations, academia, consulting firms, and other 

organizations who they believed to be most familiar with EIA’s model 

and electricity forecasting. We also spoke with senior officials within 

EPA, organizations that perform energy and emissions modeling similar 

to EIA’s, such as Platts/RDI Consulting, and energy and environmental 

policy analysts from the electricity industry, such as the Electric 

Power Research Institute, and think tanks, such as Resources For the 

Future. We spoke with these parties because literature reviews and 

agency contacts suggested that they would be best positioned to help us 

identify individuals with the greatest knowledge of energy modeling and 

related issues. We asked them to identify individuals who are 

nationally recognized in the fields of energy modeling, electricity 

demand and fuel price forecasting, emissions control technologies, and 

related areas. We then contacted these individuals and asked them to 

identify additional experts in their field. At the conclusion of this 

process, we had identified 30 individuals and/or organizations.



To select individual advisers from this pool, we applied predetermined 

criteria that included (1) area of expertise--to provide adequate 

coverage of representatives with detailed knowledge of relevant 

disciplines, including electricity modeling and emission control 

technologies; (2) the number of times an individual was recommended by 

others in the same field; and (3) professional affiliation--to ensure 

adequate coverage of key stakeholder groups, including federal 

agencies, academic institutions, private consulting firms, and 

nongovernmental organizations. This process resulted in the selection 

of seven advisers who included a cross section of the various 

stakeholder groups and specialties. The process was intended to ensure 

the selection of advisers who represent a broad range of opinions and 

perspectives. Table 1 includes the names and professional affiliations 

of the individuals selected.



Table 1: Expert Advisers Who Assisted in Our Review:



Adviser: Joel Bluestein; Affiliation: Energy and Environmental 

Analysis; Type of Organization: Consulting.



Adviser: Steve Clemmer; Affiliation: Union of Concerned Scientists; 

Type of Organization: Environmental.



Adviser: Gordon Hester; Affiliation: Electric Power Research Institute; 

Type of Organization: Industry.



Adviser: Eliot Lieberman; Affiliation: U. S. Environmental Protection 

Agency; Type of Organization: Federal government.



Adviser: Walter Short; Affiliation: National Renewable Energy 

Laboratory; Type of Organization: Federal government.



Adviser: Joseph Sutton; Affiliation: Westpower Management Team; Type of 

Organization: Consulting.



Adviser: Frances Wood; Affiliation: OnLocation, Inc.; Type of 

Organization: Consulting.



[End of table]



In addition to the advisers, we retained the services of Arnold 

Leitner, Ph.D.--a nationally recognized energy forecasting expert with 

Platts/RDI Consulting--to analyze the assumptions in EIA’s model and 

perform independent modeling.



To collect information and views from the advisers, we sent them 

questionnaires which (1) summarized the key variables[Footnote 9] that 

EIA officials identified as most directly affecting EIA’s emissions 

projections, and (2) asked specific questions regarding whether they 

agreed with or would suggest alternatives to EIA’s assumptions and 

findings. We also provided them with a list of EIA’s key assumptions 

and relevant supporting documentation. We asked respondents to provide 

us with specific alternatives in cases where they disagreed with EIA’s 

assumptions.



After we received and analyzed the advisers’ responses, we determined 

that, while they generally agreed with EIA’s overall modeling 

methodology, they disagreed with many specific assumptions and modeling 

outputs and suggested a wide range of alternatives. We interpreted this 

as evidence of the uncertainty associated with long-term energy 

forecasting. Accordingly, we asked EIA to rerun its model to address 

the uncertainties. Specifically, we asked EIA to run several scenarios 

that would identify the lower-and upper-bound of possible future air 

emissions based on alternative assumptions identified by the advisers.



We then met with EIA officials to determine how best to conduct the 

additional modeling. Because we wanted EIA to run cases to reflect our 

advisers’ assumptions that would lead to both higher and lower 

estimated emissions, the officials suggested rerunning the model using 

alternative values for electricity demand and fuel prices--the two 

modeling elements they said had the greatest influence on the model’s 

emissions projections. Instead of using the exact values for 

electricity demand and natural gas prices the advisers suggested, EIA 

used values from cases it had already run that most closely matched the 

advisers’ alternatives. For example, EIA used electricity demand values 

from its high and low macroeconomic cases and natural gas prices from 

its slow and fast oil and gas technological progress cases. We did not 

attempt to assess the relative likelihood of the alternatives provided 

by the advisers or the values EIA used for the additional modeling 

versus EIA’s reference case. Because EIA’s model is integrated--it is 

composed of separate modules, which produce results that, in turn, are 

used as data or assumptions driving other modules--EIA could not easily 

substitute some of the other information provided by the advisers.



The specific cases we asked EIA to run included:



* A “revised reference case,” using all of the assumptions from EIA’s 

Annual Energy Outlook 2002 reference case, but including updated EPA 

data on the costs of controlling nitrogen oxides and revised state 

emissions “caps” for the power sector, as published in the Federal 

Register on March 2, 2000. The updated costs for controlling emissions 

of nitrogen oxides were about 9 percent higher than those used in the 

reference case. Correcting the data on state caps for emissions of 

nitrogen oxides resulted in using 473,000 tons as the overall limit, 

rather than the 488,000 tons used in EIA’s reference case (a difference 

of about 3 percent). The net result of these corrected assumptions was 

a 1 percent decrease in emissions of nitrogen oxides.



* A “low emissions case,” using all assumptions as in the revised 

reference case above, except substituting assumptions about economic 

growth and technological change that resulted in an electricity demand 

growth rate that was 4 percent lower than EIA’s reference case, and 

natural gas prices that were 21 percent lower than the reference case.



* A “high emissions case,” using all assumptions from the revised 

reference case, except substituting assumptions about economic growth 

and technological change that resulted in an electricity demand growth 

rate that was 4.5 percent higher than EIA’s reference case and natural 

gas prices that were 30 percent higher than the reference case.



For each of these scenarios we received projections of emissions of 

carbon dioxide, mercury, nitrogen oxides, and sulfur dioxide on a 

national and regional basis through 2020.



The alternative electricity demand values and natural gas prices used 

in the low and high emissions cases did not vary equally from the 

values used in the reference case. For example, electricity demand was 

4 percent lower than the reference case in the low emissions case but 

4.5 percent higher in the high emissions case. As a result, the 

difference in emissions levels between the high emissions case and the 

reference case tends to be larger than that between the low emissions 

case and the reference case. The unequal variation from the reference 

case in each of the additional cases is a function of the alternatives 

provided by the advisers and EIA’s decision to use values for 

electricity demand and natural gas prices from cases it had already 

run. While EIA’s model is sensitive to these changes, as demonstrated 

by the wide-ranging results for carbon dioxide and mercury, the results 

should not be considered a sensitivity analysis. It is also important 

to note that the high emissions case involved both high gas prices and 

high electricity demand, which led to large amounts of generation from 

coal and high carbon dioxide and mercury emissions. It is possible that 

an alternative case could have similarly high demand but lower 

emissions of these substances due to lower gas prices. Similarly, the 

low emissions case had low demand and low gas prices, which led to 

relatively high levels of generation from natural gas. It is possible 

that an alternative case could have equally low demand but higher 

emissions if gas prices were higher.



To respond to the third objective, we obtained and analyzed information 

from EIA, and a report issued by the California Energy Commission (CEC) 

that relied on data from the Electric Power Research Institute and the 

Public Interest Energy Research Program. We used EIA’s reference case 

projections to determine the amount of electricity that EIA expects 

each type of plant (e.g., steam, turbine, nuclear) to produce in the 

future. Next, we obtained data on water consumption rates (expressed in 

gallons per megawatt hour of power produced) for different types of 

power plants from the CEC report. We then multiplied the projected 

annual generation produced by each plant type by the typical water use 

rates. We did not try to incorporate projections of improvements in 

generation or cooling technologies, which in the past have reduced the 

amount of water used by power plants. In order to reflect the 

uncertainty associated with projecting water use by power plants in 

2020, we calculated estimates using two extreme assumptions about the 

methods power plants used for cooling. We first assumed that all power 

plants adopted “dry cooling”--a method that uses much less water than 

the current average. Then we assumed that all power plants use “wet-

cooling” technology available in 2000. This provided a range of 

possible water use rates. Assuming all plants adopt wet cooling likely 

overstates the actual water needs for 2020 because it ignores (1) the 

likely use by some generators of dry-cooling methods and (2) possible 

innovations in either generating or cooling technology that would 

reduce water use.



[End of section]



Appendix II: Projected Emissions through 2020 under Four Alternative 

Cases:



The following tables present information on the projected emissions of 

carbon dioxide, mercury, nitrogen oxides, and sulfur dioxide through 

2020 under EIA’s reference case and the three alternative cases EIA 

prepared for us: the low emissions case, the revised reference case, 

and the high emissions case. The information in each table includes, by 

region, the projected volume and percentage changes of the emissions 

from 2000 to 2020 under the four cases.



Table 2: Carbon Dioxide Emissions Projections under Four Cases, 2000-

2020:



Region: 1; EIA reference case: Change in emissions 2000-2020 (million 

tons): 154; EIA reference case: Percent change 2000-2020: 28; [Empty]; 

Low emissions case: Change in emissions 2000-2020 (million tons): 130; 

Low emissions case: Percent change 2000-2020: 24; [Empty]; Revised 

reference case: Change in emissions 2000-2020 (million tons): 145; 

Revised reference case: Percent change 2000-2020: 26; [Empty]; High 

emissions case: Change in emissions 2000-2020 (million tons): 148; High 

emissions case: Percent change 2000-2020: 27.



Region: 2; EIA reference case: Change in emissions 2000-2020 (million 

tons): 31; EIA reference case: Percent change 2000-2020: 17; [Empty]; 

Low emissions case: Change in emissions 2000-2020 (million tons): 23; 

Low emissions case: Percent change 2000-2020: 12; [Empty]; Revised 

reference case: Change in emissions 2000-2020 (million tons): 30; 

Revised reference case: Percent change 2000-2020: 16; [Empty]; High 

emissions case: Change in emissions 2000-2020 (million tons): 45; High 

emissions case: Percent change 2000-2020: 24.



Region: 3; EIA reference case: Change in emissions 2000-2020 (million 

tons): 53; EIA reference case: Percent change 2000-2020: 44; [Empty]; 

Low emissions case: Change in emissions 2000-2020 (million tons): 49; 

Low emissions case: Percent change 2000-2020: 40; [Empty]; Revised 

reference case: Change in emissions 2000-2020 (million tons): 52; 

Revised reference case: Percent change 2000-2020: 42; [Empty]; High 

emissions case: Change in emissions 2000-2020 (million tons): 68; High 

emissions case: Percent change 2000-2020: 55.



Region: 4; EIA reference case: Change in emissions 2000-2020 (million 

tons): 59; EIA reference case: Percent change 2000-2020: 35; [Empty]; 

Low emissions case: Change in emissions 2000-2020 (million tons): 55; 

Low emissions case: Percent change 2000-2020: 32; [Empty]; Revised 

reference case: Change in emissions 2000-2020 (million tons): 59; 

Revised reference case: Percent change 2000-2020: 34; [Empty]; High 

emissions case: Change in emissions 2000-2020 (million tons): 67; High 

emissions case: Percent change 2000-2020: 40.



Region: 5; EIA reference case: Change in emissions 2000-2020 (million 

tons): 44; EIA reference case: Percent change 2000-2020: 32; [Empty]; 

Low emissions case: Change in emissions 2000-2020 (million tons): 39; 

Low emissions case: Percent change 2000-2020: 28; [Empty]; Revised 

reference case: Change in emissions 2000-2020 (million tons): 43; 

Revised reference case: Percent change 2000-2020: 31; [Empty]; High 

emissions case: Change in emissions 2000-2020 (million tons): 67; High 

emissions case: Percent change 2000-2020: 49.



Region: 6; EIA reference case: Change in emissions 2000-2020 (million 

tons): 6; EIA reference case: Percent change 2000-2020: 15; [Empty]; 

Low emissions case: Change in emissions 2000-2020 (million tons): 6; 

Low emissions case: Percent change 2000-2020: 14; [Empty]; Revised 

reference case: Change in emissions 2000-2020 (million tons): 6; 

Revised reference case: Percent change 2000-2020: 15; [Empty]; High 

emissions case: Change in emissions 2000-2020 (million tons): 12; High 

emissions case: Percent change 2000-2020: 29.



Region: 7; EIA reference case: Change in emissions 2000-2020 (million 

tons): 7; EIA reference case: Percent change 2000-2020: 16; [Empty]; 

Low emissions case: Change in emissions 2000-2020 (million tons): 4; 

Low emissions case: Percent change 2000-2020: 9; [Empty]; Revised 

reference case: Change in emissions 2000-2020 (million tons): 7; 

Revised reference case: Percent change 2000-2020: 15; [Empty]; High 

emissions case: Change in emissions 2000-2020 (million tons): 17; High 

emissions case: Percent change 2000-2020: 36.



Region: 8; EIA reference case: Change in emissions 2000-2020 (million 

tons): 47; EIA reference case: Percent change 2000-2020: 43; [Empty]; 

Low emissions case: Change in emissions 2000-2020 (million tons): 36; 

Low emissions case: Percent change 2000-2020: 33; [Empty]; Revised 

reference case: Change in emissions 2000-2020 (million tons): 48; 

Revised reference case: Percent change 2000-2020: 44; [Empty]; High 

emissions case: Change in emissions 2000-2020 (million tons): 80; High 

emissions case: Percent change 2000-2020: 73.



Region: 9; EIA reference case: Change in emissions 2000-2020 (million 

tons): 201; EIA reference case: Percent change 2000-2020: 40; [Empty]; 

Low emissions case: Change in emissions 2000-2020 (million tons): 153; 

Low emissions case: Percent change 2000-2020: 30; [Empty]; Revised 

reference case: Change in emissions 2000-2020 (million tons): 198; 

Revised reference case: Percent change 2000-2020: 39; [Empty]; High 

emissions case: Change in emissions 2000-2020 (million tons): 300; High 

emissions case: Percent change 2000-2020: 59.



Region: 10; EIA reference case: Change in emissions 2000-2020 (million 

tons): 35; EIA reference case: Percent change 2000-2020: 20; [Empty]; 

Low emissions case: Change in emissions 2000-2020 (million tons): 31; 

Low emissions case: Percent change 2000-2020: 18; [Empty]; Revised 

reference case: Change in emissions 2000-2020 (million tons): 34; 

Revised reference case: Percent change 2000-2020: 20; [Empty]; High 

emissions case: Change in emissions 2000-2020 (million tons): 52; High 

emissions case: Percent change 2000-2020: 30.



Region: 11; EIA reference case: Change in emissions 2000-2020 (million 

tons): 77; EIA reference case: Percent change 2000-2020: 76; [Empty]; 

Low emissions case: Change in emissions 2000-2020 (million tons): 39; 

Low emissions case: Percent change 2000-2020: 39; [Empty]; Revised 

reference case: Change in emissions 2000-2020 (million tons): 77; 

Revised reference case: Percent change 2000-2020: 75; [Empty]; High 

emissions case: Change in emissions 2000-2020 (million tons): 92; High 

emissions case: Percent change 2000-2020: 91.



Region: 12; EIA reference case: Change in emissions 2000-2020 (million 

tons): 74; EIA reference case: Percent change 2000-2020: 53; [Empty]; 

Low emissions case: Change in emissions 2000-2020 (million tons): 59; 

Low emissions case: Percent change 2000-2020: 42; [Empty]; Revised 

reference case: Change in emissions 2000-2020 (million tons): 74; 

Revised reference case: Percent change 2000-2020: 52; [Empty]; High 

emissions case: Change in emissions 2000-2020 (million tons): 82; High 

emissions case: Percent change 2000-2020: 58.



Region: 13; EIA reference case: Change in emissions 2000-2020 (million 

tons): 38; EIA reference case: Percent change 2000-2020: 45; [Empty]; 

Low emissions case: Change in emissions 2000-2020 (million tons): 39; 

Low emissions case: Percent change 2000-2020: 47; [Empty]; Revised 

reference case: Change in emissions 2000-2020 (million tons): 36; 

Revised reference case: Percent change 2000-2020: 43; [Empty]; High 

emissions case: Change in emissions 2000-2020 (million tons): 98; High 

emissions case: Percent change 2000-2020: 119.



Region: Total U.S.; EIA reference case: Change in emissions 2000-2020 

(million tons): 827; EIA reference case: Percent change 2000-2020: 35; 

[Empty]; Low emissions case: Change in emissions 2000-2020 (million 

tons): 659; Low emissions case: Percent change 2000-2020: 28; [Empty]; 

Revised reference case: Change in emissions 2000-2020 (million tons): 

808; Revised reference case: Percent change 2000-2020: 34; [Empty]; 

High emissions case: Change in emissions 2000-2020 (million tons): 

1,129; High emissions case: Percent change 2000-2020: 48.



Note: The regions included in the table are:



1. East Central (East Central Area Reliability Coordination Agreement),

2. Texas (Electric Reliability Council of Texas),

3. Mid-Atlantic (Mid-Atlantic Area Council),

4. Western Great Lakes (Mid-America Interconnected Network),

5. Upper Midwest (Mid-Continent Area Power Pool),

6. New York (Northeast Power Coordinating Council/ New York),

7. New England (Northeast Power Coordinating Council/ New England),

8. Florida (Southeastern Electric Reliability Council/ Florida),

9. Southeast (Southeastern Electric Reliability Council /excluding 

Florida),

10. Lower Midwest (Southwest Power Pool),

11. Northwest (Western Systems Coordinating Council/ Northwest Power 

Pool Area),

12. Southwest (Western Systems Coordinating Council/ Rocky Mountain 

Power Area), and

13. California (Western Systems Coordinating Council/ California-

Southern Nevada Power).



Source: EIA.



[End of table]



Table 3: Mercury Emissions Projections under Four Cases, 2000-2020:



Region: 1; EIA reference case: Change in emissions 2000-2020 (lbs.): 

148; EIA reference case: Percent change 2000-2020: 1; [Empty]; 

Low emissions case: Change in emissions 2000-2020 (lbs.): 345; 

Low emissions case: Percent change 2000-2020: 2; [Empty]; Revised 

reference case: Change in emissions 2000-2020 (lbs.): 368; Revised 

reference case: Percent change 2000-2020: 2; [Empty]; High 

emissions case: Change in emissions 2000-2020 (lbs.): 677; High 

emissions case: Percent change 2000-2020: 3.



Region: 2; EIA reference case: Change in emissions 2000-2020 (lbs.): -

821; EIA reference case: Percent change 

2000-2020: -17; [Empty]; Low emissions case: Change in emissions 2000-

2020 (lbs.): -1,008; Low emissions case: Percent change 2000-2020: -20; 

[Empty]; Revised reference case: Change in emissions 2000-2020 (lbs.): 

-1,199; Revised reference case: Percent change 2000-2020: -24; [Empty]; 

High emissions case: Change in emissions 2000-2020 (lbs.): -989; High 

emissions case: Percent change 2000-2020: -21.



Region: 3; EIA reference case: Change in emissions 2000-2020 (lbs.): -

352; EIA reference case: Percent change 

2000-2020: -5; [Empty]; Low emissions case: Change in emissions 2000-

2020 (lbs.): -741; Low emissions case: Percent change 2000-2020: -11; 

[Empty]; Revised reference case: Change in emissions 2000-2020 (lbs.): 

-542; Revised reference case: Percent change 2000-2020: -8; [Empty]; 

High emissions case: Change in emissions 2000-2020 (lbs.): 674; High 

emissions case: Percent change 2000-2020: 10.



Region: 4; EIA reference case: Change in emissions 2000-2020 (lbs.): 

1,173; EIA reference case: Percent change 

2000-2020: 21; [Empty]; Low emissions case: Change in emissions 2000-

2020 (lbs.): 978; Low emissions case: Percent change 2000-2020: 17; 

[Empty]; Revised reference case: Change in emissions 2000-2020 (lbs.): 

1,178; Revised reference case: Percent change 2000-2020: 20; [Empty]; 

High emissions case: Change in emissions 2000-2020 (lbs.): 1,800; High 

emissions case: Percent change 2000-2020: 32.



Region: 5; EIA reference case: Change in emissions 2000-2020 (lbs.): 

1,350; EIA reference case: Percent change 

2000-2020: 26; [Empty]; Low emissions case: Change in emissions 2000-

2020 (lbs.): 1,351; Low emissions case: Percent change 2000-2020: 26; 

[Empty]; Revised reference case: Change in emissions 2000-2020 (lbs.): 

1,347; Revised reference case: Percent change 2000-2020: 26; [Empty]; 

High emissions case: Change in emissions 2000-2020 (lbs.): 2,170; High 

emissions case: Percent change 2000-2020: 43.



Region: 6; EIA reference case: Change in emissions 2000-2020 (lbs.): -

335; EIA reference case: Percent change 

2000-2020: -20; [Empty]; Low emissions case: Change in emissions 2000-

2020 (lbs.): -530; Low emissions case: Percent change 2000-2020: -31; 

[Empty]; Revised reference case: Change in emissions 2000-2020 (lbs.): 

-137; Revised reference case: Percent change 2000-2020: -8; [Empty]; 

High emissions case: Change in emissions 2000-2020 (lbs.): 68; High 

emissions case: Percent change 2000-2020: 4.



Region: 7; EIA reference case: Change in emissions 2000-2020 (lbs.): 

32; EIA reference case: Percent change 

2000-2020: 3; [Empty]; Low emissions case: Change in emissions 2000-

2020 (lbs.): 32; Low emissions case: Percent change 2000-2020: 3; 

[Empty]; Revised reference case: Change in emissions 2000-2020 (lbs.): 

32; Revised reference case: Percent change 2000-2020: 3; [Empty]; High 

emissions case: Change in emissions 2000-2020 (lbs.): 46; High 

emissions case: Percent change 2000-2020: 4.



Region: 8; EIA reference case: Change in emissions 2000-2020 (lbs.): 

659; EIA reference case: Percent change 

2000-2020: 32; [Empty]; Low emissions case: Change in emissions 2000-

2020 (lbs.): 463; Low emissions case: Percent change 2000-2020: 22; 

[Empty]; Revised reference case: Change in emissions 2000-2020 (lbs.): 

657; Revised reference case: Percent change 2000-2020: 32; [Empty]; 

High emissions case: Change in emissions 2000-2020 (lbs.): 1,852; High 

emissions case: Percent change 2000-2020: 89.



Region: 9; EIA reference case: Change in emissions 2000-2020 (lbs.): 

2,634; EIA reference case: Percent change 

2000-2020: 13; [Empty]; Low emissions case: Change in emissions 2000-

2020 (lbs.): 2,456; Low emissions case: Percent change 2000-2020: 12; 

[Empty]; Revised reference case: Change in emissions 2000-2020 (lbs.): 

3,599; Revised reference case: Percent change 2000-2020: 18; [Empty]; 

High emissions case: Change in emissions 2000-2020 (lbs.): 6,111; High 

emissions case: Percent change 2000-2020: 31.



Region: 10; EIA reference case: Change in emissions 2000-2020 (lbs.): 

375; EIA reference case: Percent change 

2000-2020: 7; [Empty]; Low emissions case: Change in emissions 2000-

2020 (lbs.): 377; Low emissions case: Percent change 2000-2020: 7; 

[Empty]; Revised reference case: Change in emissions 2000-2020 (lbs.): 

377; Revised reference case: Percent change 2000-2020: 7; [Empty]; High 

emissions case: Change in emissions 2000-2020 (lbs.): 802; High 

emissions case: Percent change 2000-2020: 15.



Region: 11; EIA reference case: Change in emissions 2000-2020 (lbs.): 

1,058; EIA reference case: Percent change 

2000-2020: 46; [Empty]; Low emissions case: Change in emissions 2000-

2020 (lbs.): 666; Low emissions case: Percent change 2000-2020: 29; 

[Empty]; Revised reference case: Change in emissions 2000-2020 (lbs.): 

1,055; Revised reference case: Percent change 2000-2020: 47; [Empty]; 

High emissions case: Change in emissions 2000-2020 (lbs.): 1,467; High 

emissions case: Percent change 2000-2020: 65.



Region: 12; EIA reference case: Change in emissions 2000-2020 (lbs.): 

1,286; EIA reference case: Percent change 

2000-2020: 40; [Empty]; Low emissions case: Change in emissions 2000-

2020 (lbs.): 1,090; Low emissions case: Percent change 2000-2020: 34; 

[Empty]; Revised reference case: Change in emissions 2000-2020 (lbs.): 

1,283; Revised reference case: Percent change 2000-2020: 40; [Empty]; 

High emissions case: Change in emissions 2000-2020 (lbs.): 1,308; High 

emissions case: Percent change 2000-2020: 41.



Region: 13; EIA reference case: Change in emissions 2000-2020 (lbs.): 

32; EIA reference case: Percent change 

2000-2020: 3; [Empty]; Low emissions case: Change in emissions 2000-

2020 (lbs.): 222; Low emissions case: Percent change 2000-2020: 29; 

[Empty]; Revised reference case: Change in emissions 2000-2020 (lbs.): 

221; Revised reference case: Percent change 2000-2020: 29; [Empty]; 

High emissions case: Change in emissions 2000-2020 (lbs.): 1,013; High 

emissions case: Percent change 2000-2020: 134.



Region: Total U.S.; EIA reference case: Change in emissions 2000-2020 

(lbs.): 7,240; EIA reference case: Percent change 

2000-2020: 9; [Empty]; Low emissions case: Change in emissions 2000-

2020 (lbs.): 5,700; Low emissions case: Percent change 2000-2020: 7; 

[Empty]; Revised reference case: Change in emissions 2000-2020 (lbs.): 

8,240; Revised reference case: Percent change 2000-2020: 10; [Empty]; 

High emissions case: Change in emissions 2000-2020 (lbs.): 17,000; High 

emissions case: Percent change 2000-2020: 21.



Note: The regions included in the table are:



1. East Central (East Central Area Reliability Coordination Agreement),

2. Texas (Electric Reliability Council of Texas),

3. Mid-Atlantic (Mid-Atlantic Area Council),

4. Western Great Lakes (Mid-America Interconnected Network),

5. Upper Midwest (Mid-Continent Area Power Pool),

6. New York (Northeast Power Coordinating Council/ New York),

7. New England (Northeast Power Coordinating Council/ New England),

8. Florida (Southeastern Electric Reliability Council/ Florida),

9. Southeast (Southeastern Electric Reliability Council /excluding 

Florida),

10. Lower Midwest (Southwest Power Pool),

11. Northwest (Western Systems Coordinating Council/ Northwest Power 

Pool Area),

12. Southwest (Western Systems Coordinating Council/ Rocky Mountain 

Power Area), and

13. California (Western Systems Coordinating Council/ California-

Southern Nevada Power).



Source: EIA.



[End of table]



Table 4: Projections of Emissions of Nitrogen Oxides under Four Cases, 

2000-2020:



Region: 1; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): -182; EIA reference case: Percent change 

2000-2020: -16; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): -228; Low emissions case: Percent change 2000-

2020: -20; [Empty]; Revised reference case: Change in emissions 2000-

2020 (thousand tons): -193; Revised reference case: Percent change 

2000-2020: -17; [Empty]; High emissions case: Change in emissions 2000-

2020 (thousand tons): -207; High emissions case: Percent change 2000-

2020: -18.



Region: 2; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): -31; EIA reference case: Percent change 

2000-2020: -11; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): -30; Low emissions case: Percent change 2000-

2020: -11; [Empty]; Revised reference case: Change in emissions 2000-

2020 (thousand tons): -31; Revised reference case: Percent change 2000-

2020: -11; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): -30; High emissions case: Percent change 2000-2020: -

11.



Region: 3; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): -6; EIA reference case: Percent change 

2000-2020: -3; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): -3; Low emissions case: Percent change 2000-2020: 

-1; [Empty]; Revised reference case: Change in emissions 2000-2020 

(thousand tons): 0; Revised reference case: Percent change 2000-2020: 

0; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): 1; High emissions case: Percent change 2000-2020: 0.



Region: 4; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): 44; EIA reference case: Percent change 

2000-2020: 13; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): 33; Low emissions case: Percent change 2000-2020: 

10; [Empty]; Revised reference case: Change in emissions 2000-2020 

(thousand tons): 34; Revised reference case: Percent change 2000-2020: 

11; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): 29; High emissions case: Percent change 2000-2020: 9.



Region: 5; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): 60; EIA reference case: Percent change 

2000-2020: 23; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): 56; Low emissions case: Percent change 2000-2020: 

22; [Empty]; Revised reference case: Change in emissions 2000-2020 

(thousand tons): 59; Revised reference case: Percent change 2000-2020: 

23; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): 66; High emissions case: Percent change 2000-2020: 25.



Region: 6; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): -10; EIA reference case: Percent change 

2000-2020: -15; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): -9; Low emissions case: Percent change 2000-2020: 

-15; [Empty]; Revised reference case: Change in emissions 2000-2020 

(thousand tons): -9; Revised reference case: Percent change 2000-2020: 

-14; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): -8; High emissions case: Percent change 2000-2020: -

12.



Region: 7; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): -12; EIA reference case: Percent change 

2000-2020: -18; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): -14; Low emissions case: Percent change 2000-

2020: -21; [Empty]; Revised reference case: Change in emissions 2000-

2020 (thousand tons): -12; Revised reference case: Percent change 2000-

2020: -19; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): -3; High emissions case: Percent change 2000-2020: -4.



Region: 8; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): -24; EIA reference case: Percent change 

2000-2020: -11; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): -34; Low emissions case: Percent change 2000-

2020: -16; [Empty]; Revised reference case: Change in emissions 2000-

2020 (thousand tons): -23; Revised reference case: Percent change 2000-

2020: -11; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): -5; High emissions case: Percent change 2000-2020: -2.



Region: 9; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): -30; EIA reference case: Percent change 

2000-2020: -3; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): -36; Low emissions case: Percent change 2000-

2020: -4; [Empty]; Revised reference case: Change in emissions 2000-

2020 (thousand tons): -28; Revised reference case: Percent change 2000-

2020: -3; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): -22; High emissions case: Percent change 2000-2020: -

2.



Region: 10; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): 11; EIA reference case: Percent change 

2000-2020: 4; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): 13; Low emissions case: Percent change 2000-2020: 

5; [Empty]; Revised reference case: Change in emissions 2000-2020 

(thousand tons): 11; Revised reference case: Percent change 2000-2020: 

4; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): 16; High emissions case: Percent change 2000-2020: 6.



Region: 11; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): 32; EIA reference case: Percent change 

2000-2020: 20; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): 10; Low emissions case: Percent change 2000-2020: 

6; [Empty]; Revised reference case: Change in emissions 2000-2020 

(thousand tons): 32; Revised reference case: Percent change 2000-2020: 

20; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): 40; High emissions case: Percent change 2000-2020: 25.



Region: 12; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): 34; EIA reference case: Percent change 

2000-2020: 15; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): 26; Low emissions case: Percent change 2000-2020: 

12; [Empty]; Revised reference case: Change in emissions 2000-2020 

(thousand tons): 34; Revised reference case: Percent change 2000-2020: 

15; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): 38; High emissions case: Percent change 2000-2020: 17.



Region: 13; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): 10; EIA reference case: Percent change 

2000-2020: 11; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): 9; Low emissions case: Percent change 2000-2020: 

11; [Empty]; Revised reference case: Change in emissions 2000-2020 

(thousand tons): 8; Revised reference case: Percent change 2000-2020: 

10; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): 45; High emissions case: Percent change 2000-2020: 54.



Region: Total U.S.; EIA reference case: Change in emissions 2000-2020 

(thousand tons): -104; EIA reference case: Percent change 

2000-2020: -2; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): -204; Low emissions case: Percent change 2000-

2020: -5; [Empty]; Revised reference case: Change in emissions 2000-

2020 (thousand tons): -118; Revised reference case: Percent change 

2000-2020: -3; [Empty]; High emissions case: Change in emissions 2000-

2020 (thousand tons): -41; High emissions case: Percent change 2000-

2020: -1.



Note: The regions included in the table are:



1. East Central (East Central Area Reliability Coordination Agreement),

2. Texas (Electric Reliability Council of Texas),

3. Mid-Atlantic (Mid-Atlantic Area Council),

4. Western Great Lakes (Mid-America Interconnected Network),

5. Upper Midwest (Mid-Continent Area Power Pool),

6. New York (Northeast Power Coordinating Council/ New York),

7. New England (Northeast Power Coordinating Council/ New England),

8. Florida (Southeastern Electric Reliability Council/ Florida),

9. Southeast (Southeastern Electric Reliability Council /excluding 

Florida),

10. Lower Midwest (Southwest Power Pool),

11. Northwest (Western Systems Coordinating Council/ Northwest Power 

Pool Area),

12. Southwest (Western Systems Coordinating Council/ Rocky Mountain 

Power Area), and

13. California (Western Systems Coordinating Council/ California-

Southern Nevada Power).



Source: EIA.



[End of table]



Table 5: Sulfur Dioxide Emissions Projections under Four Cases, 2000-

2020:



Region: 1; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): -950; EIA reference case: Percent change

 2000-2020: -29; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): -888; Low emissions case: Percent change 2000-

2020: -27; [Empty]; Revised reference case: Change in emissions 2000-

2020 (thousand tons): -982; Revised reference case: Percent change 

2000-2020: -29; [Empty]; High emissions case: Change in emissions 2000-

2020 (thousand tons): -987; High emissions case: Percent change 2000-

2020: -31.



Region: 2; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): 28; EIA reference case: Percent change

 2000-2020: 8; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): 29; Low emissions case: Percent change 2000-2020: 

8; [Empty]; Revised reference case: Change in emissions 2000-2020 

(thousand tons): -21; Revised reference case: Percent change 2000-2020: 

-5; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): 80; High emissions case: Percent change 2000-2020: 23.



Region: 3; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): -298; EIA reference case: Percent change

 2000-2020: -29; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): -428; Low emissions case: Percent change 2000-

2020: -42; [Empty]; Revised reference case: Change in emissions 2000-

2020 (thousand tons): -472; Revised reference case: Percent change 

2000-2020: -47; [Empty]; High emissions case: Change in emissions 2000-

2020 (thousand tons): -485; High emissions case: Percent change 2000-

2020: -47.



Region: 4; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): -207; EIA reference case: Percent change

 2000-2020: -21; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): -252; Low emissions case: Percent change 2000-

2020: -25; [Empty]; Revised reference case: Change in emissions 2000-

2020 (thousand tons): -128; Revised reference case: Percent change 

2000-2020: -14; [Empty]; High emissions case: Change in emissions 2000-

2020 (thousand tons): -202; High emissions case: Percent change 2000-

2020: -21.



Region: 5; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): 38; EIA reference case: Percent change

 2000-2020: 8; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): 28; Low emissions case: Percent change 2000-2020: 

6; [Empty]; Revised reference case: Change in emissions 2000-2020 

(thousand tons): 51; Revised reference case: Percent change 2000-2020: 

11; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): 37; High emissions case: Percent change 2000-2020: 8.



Region: 6; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): -96; EIA reference case: Percent change

 2000-2020: -35; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): -118; Low emissions case: Percent change 2000-

2020: -42; [Empty]; Revised reference case: Change in emissions 2000-

2020 (thousand tons): -89; Revised reference case: Percent change 2000-

2020: -33; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): -80; High emissions case: Percent change 2000-2020: -

28.



Region: 7; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): -76; EIA reference case: Percent change

 2000-2020: -32; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): -98; Low emissions case: Percent change 2000-

2020: -40; [Empty]; Revised reference case: Change in emissions 2000-

2020 (thousand tons): -79; Revised reference case: Percent change 2000-

2020: -32; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): -16; High emissions case: Percent change 2000-2020: -

6.



Region: 8; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): -102; EIA reference case: Percent change

 2000-2020: -27; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): -158; Low emissions case: Percent change 2000-

2020: -41; [Empty]; Revised reference case: Change in emissions 2000-

2020 (thousand tons): -93; Revised reference case: Percent change 2000-

2020: -26; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): -47; High emissions case: Percent change 2000-2020: -

12.



Region: 9; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): -376; EIA reference case: Percent change

 2000-2020: -12; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): -304; Low emissions case: Percent change 2000-

2020: -9; [Empty]; Revised reference case: Change in emissions 2000-

2020 (thousand tons): -248; Revised reference case: Percent change 

2000-2020: -8; [Empty]; High emissions case: Change in emissions 2000-

2020 (thousand tons): -380; High emissions case: Percent change 2000-

2020: -12.



Region: 10; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): 33; EIA reference case: Percent change

 2000-2020: 8; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): 33; Low emissions case: Percent change 2000-2020: 

8; [Empty]; Revised reference case: Change in emissions 2000-2020 

(thousand tons): 38; Revised reference case: Percent change 2000-2020: 

9; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): 38; High emissions case: Percent change 2000-2020: 9.



Region: 11; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): -59; EIA reference case: Percent change

 2000-2020: -36; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): -67; Low emissions case: Percent change 2000-

2020: -41; [Empty]; Revised reference case: Change in emissions 2000-

2020 (thousand tons): -59; Revised reference case: Percent change 2000-

2020: -36; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): -56; High emissions case: Percent change 2000-2020: -

33.



Region: 12; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): -1; EIA reference case: Percent change

 2000-2020: 0; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): -5; Low emissions case: Percent change 2000-2020: 

-3; [Empty]; Revised reference case: Change in emissions 2000-2020 

(thousand tons): -2; Revised reference case: Percent change 2000-2020: 

-1; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): -1; High emissions case: Percent change 2000-2020: 0.



Region: 13; EIA reference case: Change in emissions 2000-2020 (thousand 

tons): -21; EIA reference case: Percent change

 2000-2020: -23; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): -5; Low emissions case: Percent change 2000-2020: 

-8; [Empty]; Revised reference case: Change in emissions 2000-2020 

(thousand tons): -5; Revised reference case: Percent change 2000-2020: 

-9; [Empty]; High emissions case: Change in emissions 2000-2020 

(thousand tons): 12; High emissions case: Percent change 2000-2020: 20.



Region: Total U.S.; EIA reference case: Change in emissions 2000-2020 

(thousand tons): -2,088; EIA reference case: Percent change

 2000-2020: -19; [Empty]; Low emissions case: Change in emissions 2000-

2020 (thousand tons): -2,088; Low emissions case: Percent change 2000-

2020: -19; [Empty]; Revised reference case: Change in emissions 2000-

2020 (thousand tons): -2,088; Revised reference case: Percent change 

2000-2020: -19; [Empty]; High emissions case: Change in emissions 2000-

2020 (thousand tons): -2,088; High emissions case: Percent change 2000-

2020: -19.



Note: The regions included in the table are:



1. East Central (East Central Area Reliability Coordination Agreement),

2. Texas (Electric Reliability Council of Texas),

3. Mid-Atlantic (Mid-Atlantic Area Council),

4. Western Great Lakes (Mid-America Interconnected Network),

5. Upper Midwest (Mid-Continent Area Power Pool),

6. New York (Northeast Power Coordinating Council/ New York),

7. New England (Northeast Power Coordinating Council/ New England),

8. Florida (Southeastern Electric Reliability Council/ Florida),

9. Southeast (Southeastern Electric Reliability Council /excluding 

Florida),

10. Lower Midwest (Southwest Power Pool),

11. Northwest (Western Systems Coordinating Council/ Northwest Power 

Pool Area),

12. Southwest (Western Systems Coordinating Council/ Rocky Mountain 

Power Area), and

13. California (Western Systems Coordinating Council/ California-

Southern Nevada Power).



Source: EIA.



[End of table]



[End of section]



Appendix III: Comments from the Energy Information Administration:



Department of Energy Washington, DC 20585:



John B. Stephenson:



Director, Natural Resources and Environment 

General Accounting Office

441 G Street NW Washington, DC 20548:



Dear Mr. Stephenson:



The Energy Information Administration (EIA) appreciates the opportunity 

to assist the General Accounting Office (GAO) in responding to its 

request from Senators Jeffords and Lieberman. We agree with the general 

results of the GAO report that power sector emissions over the next 20 

years are uncertain and sensitive to many factors, among them the rate 

of growth in the demand for electricity and the price of natural gas. 

It is because of this uncertainty that EIA’s Annual Energy Outlook 

(AEO) includes 30 cases with alternative assumptions about the cost and 

performance of energy supply and consumption technologies, economic 

growth, world oil prices and electricity demand growth. EIA encourages 

readers of the AEO to review the full breadth of cases presented rather 

than concentrating solely on the reference case. As stated in the 

report:



“The projections in AE02002 are not statements of what will happen but 

of what might happen, given the assumptions and methodologies used. The 

projections are business-as-usual trend forecasts, given known 

technology, technological and demographic trends, and current laws and 

regulations. Thus, they provide a policy-neutral reference case that 

can be used to analyze policy initiatives. EIA does not propose, 

advocate, or speculate on future legislative and regulatory changes. 

All laws are assumed to remain as currently enacted; however, the 

impacts of emerging regulatory changes, when defined, are reflected.”’:



While we generally agree with the results presented, there are areas of 

the report that readers may misunderstand or find confusing without 

more information. These areas are summarized below:



The discussion of the process used to identify individuals who were 

requested by GAO to review EIA’s analysis in the 5T’ paragraph of the 

report does not include the names and affiliation of the individuals 

who participated. The information is provided in Appendix I of the 

report, but it would be helpful to provide a citation to the appendix 

here so that readers could evaluate the reviewers’ comments based on 

who they are and their affiliation.



In the Results in Brief section (1st full paragraph on page 3) the 

report states, “The projected mercury emissions could decrease, 

however, once the Environmental Protection Agency (EPA) proposes 

mercury limits, which are required by 2004 and which EIA’s modeling did 

not take into account”. The final clause in the sentence gives the 

impression that EIA failed to include an existing regulation, which is 

untrue. Our policy, as noted in the AEO, is to incorporate laws and 

regulations once they have been finalized. Thus, until EPA issues final 

rules on mercury limits, EIA would not incorporate them in its 

reference case forecasts.



In the Results in Brief section (bottom of page 4) the report states, 

“Separately, in working with EIA’s model we found that the agency had 

not used the most current data on certain emissions limits.” The same 

point is repeated using similar language on pages 16 (1S‘ paragraph) 

and 18 (underlined statement). These statements give the impression 

that EIA made a critical mistake, which is not the case. EIA’s analysis 

incorporated nitrogen oxide limits that take effect in 19 states (22 

states were originally included but 3 are involved litigation of this 

issue) and the District of Columbia beginning in 2004, by assuming 

values that had been published by EPA in the Federal Register prior to 

final adjustments. EIA used an assumed limit of 488,000 tons based on 

the original EPA Federal Register notice instead of the 473,000 ton 

final limit (a 3-percent difference). Although EIA meets regularly with 

industry and government experts, including EPA staff, in the 

development of its forecasts, these changes were not brought to our 

attention. Comparing the results in the AEO reference case to those in 

the GAO reference case presented in this report shows that correcting 

this oversight has negligible impact. The final limit will be 

incorporated in EIA’s Annual Energy Outlook 2003.



The report asserts that the cost and performance assumptions for 

nitrogen oxide (NOx) removal equipment (discussed on page 17) used 

outdated information. We disagree and feel the most widely accepted 

information available was used. We used nitrogen oxide control costs 

developed by EPA in 1995. In discussions with industry, the Department 

of Energy’s (DOE) Office of Fossil Energy and the National Energy 

Technology Center (NETL), we found that these equipment cost and 

performance assumptions were generally accepted. EPA updated this 

information in 2001, mainly increasing its estimates for both the cost 

and performance of selective catalytic reduction (SCR), a key NOx 

removal technology. We found that industry groups and experts in DOE 

and NETL did not agree with these updates, because the cost of 
achieving 

the higher level of removal assumed by EPA in its revised estimates 
was, 

in their opinion, under-estimated.Estimates of the costs of recently 

installed SCRs received from industry also supported this view. For 

this reason, we continued to use the earlier cost and performance 

estimates.



In the Background section (bottom of page 5) the report states, “EIA’s 

2002 projections are based on federal, State, and local laws and 

regulations in effect on September l, 2001; its model does not 

incorporate pending legislation.” We believe that this statement gives 

the impression that we do not include existing laws or regulations that 

take effect in the future, which is untrue. A clearer statement would 

be that EIA’s projections include existing laws and regulations that 

have been fully implemented. EIA’s analysis does not include laws and 

regulations where required standards, limits, or compliance programs 

have not been established.



The comment from the report advisors (page 17, middle paragraph) on 

EIA’s projected natural gas prices states, “One of them noted that 

EIA’s methodology relied on the extrapolation of recent trends and, 

therefore, depends heavily on how well the future market matches this 

historical pattern.” This statement completely mis-characterizes the 

methodology we use to estimate future natural gas prices. The National 

Energy Modeling System (NEMS) incorporates an extremely detailed 

representation of the natural gas exploration, production, and delivery 

sectors together with equally detailed representations of the 

residential, commercial, industrial, transportation and electricity 

consumption sectors. The cost of finding, developing and delivering 

natural gas from the known resource base are represented. Resource 

estimates are regularly updated using official government estimates, 

and parameters related to exploration and production are re-estimated 

each year. In any given year the balancing of natural gas supply and 

demand, using a Gauss-Seidel integrating algorithm, determines the 

price of natural gas. For those interested in more detail the 

documentation can be found at: http://www.eIa.doe.gov/bookshelf/
docs.html.



The report states (page 17, last sentence), “According to an EIA 

official, higher gas prices increase the reliance on coal plants.” This 

statement needs more clarification. Higher natural gas prices would not 

be expected to have much impact on the operation of existing coal 

plants. Existing coal plants are quite economical and are expected to 

operate intensively under most circumstances. Higher natural gas prices 

would make new natural gas plants less economical and could likely lead 

to the construction of more new coal plants in the future to meet new 

capacity demand.



The first paragraph at the top of page 19 describes the cases in this 

analysis, saying “At our request, EIA developed ....” A better 

description is, “With assumptions provided by GAO, EIA prepared 

alternative emissions projection cases.”:



In the Conclusions section (page 27) the report states, “And while the 

advisors disagreed with some of EIA’s values for future electricity 

demand and fuel price trends, they, and EIA, recognize that forecasting 

is imprecise and that it is difficult to determine which set of 

alternative assumptions is most likely to occur.” We think that it 

would be useful to point out that EIA includes 30 cases with 

alternative assumptions about the cost and performance of energy supply 

and consumption technologies, economic growth, world oil prices and 

electricity demand growth in its AEO to address the uncertainty 

inherent in mid-to long-term forecasting and that EIA continually 

strives through technical working groups and other regular meetings to 

insure that we are using the best available information and 

methodologies in our analyses.



We appreciate the opportunity to comment.



Sincerely,



Signed by Guy F. Caruso :



Guy F. Caruso 

Administrator 

Energy Information Administration:



[End of section]



Appendix IV: GAO Contacts and Staff Acknowledgments:



GAO Contacts:



John B. Stephenson (202) 512-3841

Eileen R. Larence (202) 512-6510:



Acknowledgments:



In addition to the individuals named above, Michael Hix, Vincent Price, 

and Laura Yannayon made key contributions to this report. Important 

contributions were also made by Frank Rusco and Amy Webbink.



FOOTNOTES



[1] EIA’s electricity supply regions are based on the North American 

Electricity Reliability Council’s (NERC) regional divisions. NERC is a 

not-for-profit corporation, consisting of members from all segments of 

the electric industry, including investor-owned utilities; federal 

power agencies; rural electric cooperatives; state, municipal, and 

provincial utilities; independent power producers; power marketers; and 

end-use customers.



[2] The other principal pollutants are carbon monoxide, lead, and 

particulate matter.



[3] Ozone is a regulated pollutant that forms when nitrogen oxides 

react with volatile organic compounds in the presence of heat and 

sunlight. 



[4] 63 Fed. Reg. 57356 (Oct. 27, 1998). The states were: Alabama, 

Connecticut, Delaware, Georgia, Illinois, Indiana, Kentucky, Maryland, 

Massachusetts, Michigan, Missouri, New Jersey, New York, North 

Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, 

Virginia, West Virginia, and Wisconsin. The District of Columbia 

Circuit Court later vacated the NOx SIP call for Georgia, Missouri, and 

Wisconsin. Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000).



[5] 65 Fed. Reg. 2674 (Jan. 18, 2000).



[6] These percentages exclude electricity that is generated by 

industrial and other facilities that is then sold to electric 

utilities.



[7] EIA has developed an alternative case based on an annual 

electricity demand growth rate of 2.5 percent.



[8] The modeling results listed here focus on the low and high 

emissions cases because the results of the revised reference case did 

not vary substantially from EIA’s reference case.



[9] These include electricity demand, new plant costs, the fuel mix for 

electricity production, expected fuel prices, pollution control 

equipment costs, and retirements of older plants.



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