Issues in Focus

59.  The AEO2007 near-term world oil prices (for 2006 and 2007) are those published in EIA’s September 2006 Short-Term Energy Outlook, web site www.eia.doe. gov/pub/forecasting/steo/oldsteos/sep06.pdf. 

60.  The USGS provides three point estimates for undiscovered and inferred resources: the mean, a 5-percent confidence interval, and a 95-percent confidence interval, with no price relationship. AEO2007 assumes that proven reserves are not subject to much uncertainty. 

61.  Includes crude oil, condensates, natural gas liquids, and refinery gains. 

62.  M.S. Crandall, Energy, Economics, and Politics in the Caspian Region (Westport, CT: Praeger Security International, 2006), p. 64. 

63.  International Energy Agency, Oil Market Report (October 6, 2006), p. 24, web site http://omrpublic.iea.org. 

64.  BP, Statistical Review of World Energy 2006, web site www.bp.com/productlanding.do?categoryId=6842&contentId=7021390 (October 12, 2006). 

65.  Global Insight, “Brazil Country Brief” (October 18, 2006). 

66.  International Energy Agency, Oil Market Report (October 6, 2006), p. 22, web site http://omrpublic.iea.org. 

67.  American Petroleum Institute, Joint Association Survey on Drilling Costs (1996-2004), web site www.api. org/statistics/accessapi/surveys/survey-description.cfm. 

68.  This well category—that is, a natural gas development well drilled between 7,500 feet and 9,999 feet—was chosen because: (1) about 75 percent of the wells drilled in the United States are natural gas wells; (2) more than 18 development wells are drilled for every exploration well; (3) exploration wells can have significant and unforeseen cost overruns, whereas the drilling of development wells is a more routine operation; and (4) the depth category of 7,500 to 9,999 feet accounts for the greatest number and proportion of natural gas development wells drilled. Consequently, this category is reasonably representative of the oil industry overall. 

69.  ODS-Petrodata, Inc., web site https://www.ods-petrodata.com/RigPoint. 

70.  Oil & Gas Journal, Nelson-Farrar Cost Indices (published quarterly in January, April, July, and October). 

71.  Source: Bureau of Labor Statistics, Seasonally Adjusted Producer Price Indices (PPI), Series WPS101. In May 2002, the iron and steel PPI was 112.9; by June 2006 it had risen to 194.0 (preliminary). 

72.  Baker-Hughes, Inc., “North American Rotary Rig Count,” web site www.bhinet.com/investor/rig/rig_na.htm. 

73.  U.S. Census Bureau, web site www.census.gov/industry/ma333f05.xls, product code 3331311 for underground mining machinery. 

74.  Peabody Energy, Inc., web site www.peabodyenergy.com/pdfs/05_AR_FINANCIALS.pdf. 

75.  Peabody Energy, Inc., web site www.peabodyenergy.com/pdfs/05_AR_FINANCIALS.pdf. 

76.  CONSOL Energy, web site http://media.corporate-ir.net/media_files/irol/66/66439/pdfs/AR05.pdf. 

77.  Massey Energy Company, web site http://library.corporate-ir.net/library/10/102/102864/items/195646/ 2005AR.pdf. 

78.  The subsidiaries of Joy Global manufacture mining machinery that includes continuous miners, longwall shearers, powered roof supports, armored face conveyors, shuttle cars, flexible conveyor trains, roof bolters, electric mining shovels, rotary blasthole drills, and walking draglines. 

79.  R. Barrett, “Mining Boom Brightens Joy Global Profits, Developments in China, Milwaukee Journal Sentinel (February 25, 2005). 

80.  BNSF Railway, 2005 Annual Report, web site www.bnsf.com/investors/annualreports/2005annrpt.pdf. 

81.  BNSF Railway, 2005 Annual Report, web site www.bnsf.com/investors/annualreports/2005annrpt.pdf. 

82.  Toby Kolstad, Rail Theory Forecasts, LLC, personal communication, October 22, 2006. 

83.  “Acquisitions by Railroads and Others,” Progressive Railroading, Vol. 48, No. 5 (May 2005), p. 49. 

84.  Imputed from the number and value of backlogged orders reported in Freight Car America’s 2005 Annual Report, web site www.johnstownamerica.com. 

85.  Freight Car America, 2005 Annual Report, web site www.johnstownamerica.com. 

86.  P. Foran, “Powergrabs: Traffic Volumes Prompt Railroads To Pursue Locomotive Power—and Lots of It,” Progressive Railroading, Vol. 48, No. 5 (May 2005), pp. 50-51. 

87.  BNSF Railway, 2005 Annual Report, web site www.bnsf.com/investors/annualreports/2005annrpt.pdf. 

88.  Surface Transportation Board, U.S. Department of Transportation, “Statistics of Class I Freight Railroads in the United States,” web site www.stb.dot.gov/econdata.nsf. 

89.  BNSF Railway, 2005 Annual Report, web site www. bnsf.com/investors/annualreports/2005annrpt.pdf. 

90.  Reviews of energy demand elasticities include C. Dahl, A Survey of Energy Demand Elasticities in Support of the Development of the NEMS, Contract Number DE-AP01-93EI23499 (Washington, DC, October 1993). 

91.  Federal Energy Regulatory Commission, Assessment of Demand Response and Advanced Metering, Staff Report, Docket AD-06-2-000 (Washington, DC, August 2006), web site www.ferc.gov/legal/staff-reports/demand-response.pdf. 

92.  Energy Information Administration, Commercial Buildings Energy Consumption Survey (2003 data), web site www.eia.doe.gov/emeu/cbecs. 

93.  L.J. Sandahl, T.L. Gilbride, M.R. Ledbetter, H.E. Steward, and C. Calwell, Compact Fluorescent Lighting in America: Lessons Learned on the Way to Market, PNNL-15730 (Richland, WA: Pacific Northwest National Laboratory, June 2006), web site www.eere.energy.gov/buildings/info/documents/pdfs/ cfl_lessons_learned_web.pdf. 

94.  Web sites www.energystar.gov and www.eere.energy. gov/buildings/building_america. 

95.  K.A. Hanson, “Seasonality of Moves and Duration of Residence,” U.S. Census Bureau, Current Population Reports, Household Economic Studies (October 1998), web site www.census.gov/prod/3/98pubs/p70-66.pdf. 

96.  R. Nevin and G. Watson, “Evidence of Rational Market Valuations for Home Energy Efficiency,” Appraisal Journal (October 1998). 

97.  Apparently, some very low-cost projects are never undertaken. See S.T. Anderson and R.G. Newell, “Information Programs for Technology Adoption: The Case of Energy-Efficiency Audits,” Resource and Energy Economics, Vol. 26, No. 1 (March 2004), pp. 27-50. See web site www.rff.org/~newell/ ResEnergyEcon.pdf. 

98.  R.B. Lung, A. McKane, and M. Olszewski, “Industrial Motor System Optimization Projects in the US: An Impact Study,” TAPPI, web site www.tappi.org/s_tappi/sec_publications.asp?CID=4583&DID= 510344; and U.S. Department of Energy, Office of Industrial Technologies, “Georgia Pacific’s Insulation Upgrade Leads to Reduced Fuel Costs and Increased Process Efficiency,” web site www1.eere.energy.gov/ industry/bestpractices/pdfs/insulation.pdf. 

99.  Based on data from the U.S. Census Bureau’s 2004 Annual Survey of Manufactures, published in Statistics for Industry Groups and Industries: 2004, M04(AS)-1 (Washington, DC, December 2005), web site www.census.gov/mcd/asm-as1.html. 

100.  Based on data from EIA’s 2002 Manufacturing Energy Consumption Survey (MECS), Tables 10.2 to 10.13, web site www.eia.doe.gov/emeu/mecs/mecs2002/data02/shelltables.html. Petrochemical feedstocks are not reported separately in MECS but are included in this calculation. 

101.  See W.A. Pizer, W. Harrington, R.J. Kopp, R.D. Morgenstern, and J-S Shih, “Technology Adoption and Aggregate Energy Efficiency,” Discussion Paper 02-52 (Washington, DC: Resources for the Future, December 2002), web site www.rff.org/Documents/RFF-DP-02- 52.pdf. 

102.  Electricity demand for commercial office equipment is an end-use category separate from miscellaneous consumption. 

103.  TIAX LLC, Commercial and Residential Sector Miscellaneous Electricity Consumption: Y2005 and Projections to 2030 , EIA contract report (September 2006). 

104.  The decline in electricity use per unit is driven by the new California standard that requires less electricity use while in standby mode, which accounts for more than 99 percent of hours of use over the course of a year. See California Energy Commission, 2006 Appliance Efficiency Regulations, CEC-400-2006-002 (Sacramento, CA, January 2006). 

105.  Alaska’s former governor, Frank Murkowski, supported 20-percent equity ownership for the State, which would also bear 20 percent of the construction costs. 

106.  The Northern Pipeline Act awarded Foothills Pipe Lines Ltd. the certificate for construction of the Canadian portion of the Alaska Natural Gas Transportation System along the Alaska Highway. After the passage of the Northern Pipeline Act, TransCanada purchased Foothills Pipe Line. 

107.  BP, ExxonMobil, and ConocoPhillips, “Alaska Producer Pipeline Update” (May 2002), Slide 15, web site www.arcticgaspipeline.com/Reference/Documents& Presentations/ProducerInformation/5-02AlaskaProducerUpdate.ppt. 

108.  U.S. Department of Labor, Bureau of Labor Statistics, Seasonally Adjusted Producer Price Indices (PPI), Series WPS101. In May 2002 the PPI for iron and steel was 112.9; in June 2006 it was 194.0. 

109. Energy Information Administration, “Coal Distribution Back Issues,” web site www.eia.doe.gov/cneaf/ coal/page/coaldistrib/coal_distributions.html.

110. EIA’s coal distribution data for 2004 indicate that the mode of transportation for 28 million tons (3 percent) of domestic coal shipments was “unknown.”

111. Energy Information Administration, “Coal Transpor-tation: Rates and Trends in the United States, 1979-2001 (with Supplementary Data to 2002),” Table 2.06, web site www.eia.doe.gov/cneaf/coal/page/trans/ratesntrends.html.

112. U.S. Senate, Committee on Energy and Natural Resources, “Coal-Based Generation Reliability,” Statement of David Wilks, President of Energy Supply, Xcel Energy, on behalf of the Edison Electric Institute and Consumers United for Rail Equity (May 25, 2006).

113. Average transportation rates are imputed from the difference between average delivered prices, excluding imports, and average minemouth prices.

114. BNSF Railway Company, Quarterly Report (June 30, 2006) web site www.bnsf.com/investors/secfilings/10Q_Railway_2Q_2006.pdf.

115. U.S. Government Accountability Office, Freight Railroads: Industry Health Has Improved, But Concerns about Competition and Capacity Should Be Addressed, GAO-07-94 (Washington, DC, October 2006), web site www.gao.gov/new.items/d0794.pdf.

116. U.S. Senate, Subcommittee on Surface Transportation and Merchant Marine, “Economics, Service and Capacity in the Freight Railroad Industry,” Statement of W. Douglas Buttrey, Chairman, Surface Transportation Board (June 21, 2006).

117. Surface Transportation Board, web site www.stb.dot.gov.

118. N. Carey, “Margins, Fuel Charges Boost Union Pacific 4th Qtr,” Reuters.com (January 2006).

119. Norfolk Southern, web site www.nscorp.com/nscorphtml/marketing/pricing/NS8003_terms.html.

120. CSX, web site http://shipcsx.com/public/ec.shipcsx public/Main?module_url=/ec.pricingpublic/About.

121. Surface Transportation Board Decision, Rail Fuel Surcharges, Ex Parte No. 661 (August 3, 2006), web site www.stb.dot.gov. 122.Surface Transportation Board, Rail Fuel Surcharge, Comments of BNSF Railway (October 2, 2006).

122.Surface Transportation Board, Rail Fuel Surcharge, Comments of BNSF Railway (October 2, 2006).

123.  “CSX STB Fuel Surcharge Filing” (October 3, 2006) web site www.csx.com. 

124.  U.S. Senate, Committee on Energy and Natural Resources, “Coal-Based Generation Reliability,” Statement of Howard Gruenspecht, Deputy Administrator, Energy Information Administration (May 25, 2006). 

125.  R. Smith and D. Machalaba, “As Utilities Seek More Coal, Railroads Struggle To Deliver,“ Wall Street Journal (March 15, 2006), p. A1; and “Coal Stocks Outperform S&P, Metals Securities,” Platts Coal Trader (November 15, 2005), pp. 2-3. 

126.  S. Bobb, Group Vice President of Coal Marketing, BNSF Railway, “June 2006 Coal Update,” paper presented to staff at the Energy Information Administration (Washington, DC, June 27, 2006). 

127.  U.S. Senate, Committee on Energy and Natural Resources, “Coal-Based Generation Reliability,” Statement of Edward Hamberger, President and Chief Executive Officer, Association of American Railroads (May 15, 2006); and S. Bobb, Group Vice President of Coal Marketing, BNSF Railway, “June 2006 Coal Update,” paper presented to staff at the Energy Information Administration (Washington, DC, June 27, 2006). 

128.  A.J. Cebula, Vice President of Planning & Engineering, CANAC Inc., “Southern Powder River Basin, BNSF/UP Joint Line, Towards Sustainable Operations of 500 mmT,” paper presented at the National Coal Transportation Association Annual Fall Meeting & Conference (Denver, CO, September 13, 2006). 

129.  “CANAC Sees 50 Percent Jump in SPRB Output by 2012,” Argus Coal Transportation, Vol. 25, No. 17 (September 14, 2006), p. 1. 

130.  Personal communication to EIA from Doug Conway, General Manager–Coal, DM&E and IC&E Railroads (November 16, 2006). 

131.  O. Port, “Not Your Father’s Ethanol,” Business Week (February 21, 2005), web site www.businessweek.com/ magazine/content/05_08/b3921117.htm. 

132.  National Renewable Energy Laboratory, Lignocellulosic Biomass to Ethanol Process Design and Economics Utilizing Co-Current Dilute Acid Prehydrolysis and Enzymatic Hydrolysis for Corn Stover, NREL/ TP-510-32438 (Golden, CO, June 2002), web site www. nrel.gov/docs/fy02osti/32438.pdf. 

133.  National Biodiesel Board, “Biodiesel—Commonly Asked Questions,” web site www.nbb.org/pdf_files/ fuelfactsheets/CommonlyAsked.PDF. 

134.  U.S. Department of Energy, Energy Efficiency and Renewable Energy, Alternative Fuels Data Center, “State and Federal Incentives and Laws,” web site www.eere.energy.gov/afdc/progs/view_ind_mtx.cgi?in/TAX/US/0.

135.  U.S. Department of Agriculture, The Economic Feasibility of Ethanol Production from Sugar in the United States (Washington, DC, July 2006), Table 19, web site www.usda.gov/oce/EthanolSugarFeasibilityReport3.pdf. 

136.  U.S. Department of Agriculture, USDA’s 2002 Ethanol Cost-of-Production Survey (Washington, DC, July 2005), Table 3, web site www.usda.gov/oce/reports/energy/USDA_2002_ETHANOL.pdf. 

137.  Promar International, Evaluation and Analysis of Vegetable Oil Market: The Implication of Increased Demand for Industrial Uses on Markets & USB Strategy (November 2005), pp. 37-41, web site www.nbb.org/resources/reportsdatabase/reports/gen/20051101_ gen-368.pdf. 

138.  National Renewable Energy Laboratory, Biomass Oil Analysis: Research Needs and Recommendations, NREL/TP-510-34796 (June 2004), Table 23, web site www.nrel.gov/docs/fy04osti/34796.pdf. 

139.  In 2005, the wholesale price of gasoline was imputed to be $1.74 per gallon and the wholesale price of diesel $1.78 per gallon. In 2012, the average U.S. wholesale prices are projected to be $1.52 and $ 1.48 per gallon, respectively, as some of the unusual margins of the refinery market are projected to return to the historical pattern.

140. U.S. Department of Agriculture, USDA’s 2002 Ethanol Cost-of-Production Survey (Washington, DC, July 2005), Table 3, web site www.usda.gov/oce/reports/energy/USDA_2002_ETHANOL.pdf.

141. S. Howell, “Time To Take the Biodiesel Plunge?” Render Magazine (February 2005), pp. 10-14.

142. R. Pruszko, “Rendered Fats and Oils as a Biodiesel Feedstock: The Opportunities and Challenges,” Render Magazine (February 2006), pp. 10-12.

143. K. Collins, Chief Economist, U.S. Department of Agriculture, “Statement Before the U.S. Senate Committee on Agriculture, Nutrition, and Forestry” (January 10, 2007), p. 2, web site www.usda.gov/oce/newsroom/congressional_testimony/Collins_011007.pdf.

144. A. Baker and S. Zahniser, “Ethanol Reshapes the Corn Market,” Amber Waves Magazine, Vol. 4, No. 2 (2006), pp. 30-35, web site www.ers.usda.gov/AmberWaves/April06/Features/Ethanol.htm.

145. Promar International, Evaluation and Analysis of Vegetable Oil Market: The Implication of Increased Demand for Industrial Uses on Markets & USB Strategy (November 2005), pp. 25-35, web site www.nbb.org/resources/reportsdatabase/reports/gen/20051101_ gen-368.pdf. 146.U.S. Department of Agriculture, 2002 Census of Agriculture (Washington, DC, June 2004), Vol. 1, Chapter 1, “U.S. National Level Data,” Table 8, “Land: 2002 and 1997,” web site www.nass.usda.gov/census/census02/volume1/us/st99_1_008_008.pdf. 147.U.S. Department of Agriculture, Summary Report: 1997 National Resources Inventory (Washington, DC, December 2000), Figure 1, “How Our Land Is Used, 1997,” web site www.nrcs.usda.gov/Technical/NRI/ 1997/summary_report/figures.html#figure1.

146. U.S. Department of Agriculture, 2002 Census of Agriculture (Washington, DC, June 2004), Vol. 1, Chapter 1, “U.S. National Level Data,” Table 8, “Land: 2002 and 1997,” web site www.nass.usda.gov/census/census02/volume1/us/st99_1_008_008.pdf.

147. U.S. Department of Agriculture, Summary Report: 1997 National Resources Inventory (Washington, DC, December 2000), Figure 1, “How Our Land Is Used, 1997,” web site www.nrcs.usda.gov/Technical/NRI/1997/summary_report/figures.html#figure1.

148. For a description of the Conservation Reserve Program, see web site www.nrcs.usda.gov/programs/crp.

149. U.S. Department of Agriculture, Baseline Projection (Washington, DC, February 2006), Tables 8 and 13, “Planted Acres, 2005/06 Marketing Year.”

150. Historic crop yields tabulated by U.S. Department of Agriculture, National Agriculture Statistics Service, web site www.nass.usda.gov/Data_and_Statistics/Quick_Stats/index.asp.

151. Average yield increase calculated from 30-year historic data supplied by U.S. Department of Agriculture, National Agriculture Statistics Service.

152. U.S. Department of Agriculture and U.S. Department of Energy, Biomass as a Feedstock for a Bioenergy and Bioproducts Industry: The Technical Feasibility of a Billion-Ton Annual Supply, DOE/GO-102995-2135 (Washington, DC, April 2005), web site http:// feedstockreview.ornl.gov/pdf/billion_ton_vision.pdf.

153. Renewable Fuels Association, From Niche to Nation: Ethanol Industry Outlook 2006 (Washington, DC, February 2006), pp. 14-15, web site www.ethanolrfa.org/objects/pdf/outlook/outlook_2006.pdf.

154. Promar International, Evaluation and Analysis of Vegetable Oil Market: The Implication of Increased Demand for Industrial Uses on Markets & USB Strategy (November 2005), pp. 25-35, web site www.nbb.org/resources/reportsdatabase/reports/gen/20051101_ gen-368.pdf.

155. National Biodiesel Board, “Biodiesel Production,” web site www.nbb.org/pdf_files/fuelfactsheets/Production.pdf.

156. F. Luxem, “Glycerin as a C-3 Raw Material,” presented at the 2006 National Biodiesel Conference.

157. National Corn Grower’s Association, “How Much Ethanol Can Come From Corn?” (May 2006), web site www.ncga.com/ethanol/pdfs/2006/HowMuchEthanolCanComeFromCorn.v.2.pdf.

158. U.S. Department of Agriculture, “Agricultural Baseline Projections 2006-2015,” web site www.ers.usda.gov/Briefing/Baseline/crops.htm.

159. National Corn Growers Association, “U.S. Corn Usage by Segment, 2005” (pie chart), web site www.ncga. com/WorldOfCorn/main/consumption1.asp.

160. U.S. Department of Energy, Energy Efficiency and Renewable Energy, Alternative Fuels Data Center, web site www.eere.energy.gov/afdc/progs/reg_matrx.cgi.

161. K. Collins, Chief Economist, U.S. Department of Agriculture, “Statement before the U.S. Senate Committee on Environment and Public Works” (September 6, 2006), p. 8, web site www.usda.gov/oce/newsroom/congressional_testimony/Biofuels Testimony 9-6-2006.doc.