EIA Projects Renewable Energy, Biofuels to Slow Oil Consumption Through 2030
January 23, 2009 // Published as a news service by IHS
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The reference case for the EIA's Annual Energy Outlook 2009 (AEO2009), released in December 2008, projects renewable energy use to increase steadily at 3.3% per year, with renewable energy power plants competing mainly with natural gas for new additions to the nation's power generating capacity.
With overall liquid fuel demand in the AEO2009 reference case growing by only 1 million barrels per day between 2007 and 2030, increased use of domestically produced biofuels and rising domestic oil production spurred by higher prices, the net import share of total liquids supplied - including biofuels - declines from 58% in 2007 to less than 40% in 2025 before increasing to 41% in 2030, according to the AEO2009.
The AEO2009 also reveals a decline in light truck sales and a sharp increase in the sale of unconventional vehicle technologies such as flex-fuel, hybrid and diesel vehicles. Experts estimate hybrid vehicles will account for 38% of all new vehicle sales by 2030, including sales of plug-in hybrid electric vehicles, which account for 2% of all new vehicle sales by 2030.
Meanwhile, ethanol fuel use will grow to 29.5 billion gallons in 2030, with nearly 60% of the fuel used in ethanol-rich blends for flex-fuel vehicles. The EIA expects more than 40% of the ethanol to come from cellulosic biomass by 2030.
In addition, biodiesel and other renewable diesel fuels will provide another 7 billion gallons of fuel. The EIA projects that biofuel production levels will fall short of the federal Renewable Fuels Standard target of 36 billion gallons in 2022, landing closer to 30 billion gallons.
By 2030, the AEO2009 projects continued biofuel growth to push total biofuel production well above the target. According to the EIA, the key risk factor is the rate of development of cellulosic biofuels and the subsequent growth in cellulosic biofuel production.
Other highlights of the AEO2009 reference case projections include:
- Coal, oil and natural gas will meet 79% of total U.S. primary energy supply requirements in 2030, down from an 85% share in 2007.
- Total domestic production of natural gas will reach 23.7 trillion cubic feet by 2030. While exploration and production costs will rise over time, higher natural gas prices will support the projected level of production. Onshore production of unconventional natural gas, including shale gas, will increase from 9.2 trillion cubic feet in 2007 to 13.2 trillion cubic feet in 2030.
- Ethanol use for gasoline blending will grow to 12.2 billion gallons and E85 consumption to 17.3 billion gallons in 2030. The ethanol supply from cellulosic feedstocks will reach 12.6 billion gallons (including both domestic and imported production) in 2030. Biodiesel and biomass-to-liquid diesel fuel use will both rise, reaching nearly 2 billion gallons and 5 billion gallons, respectively, in 2030.
- Total electricity consumption, including both purchases from electric power producers and onsite generation, will grow from 3,903 billion kilowatt hours in 2007 to 4,902 billion kilowatt hours in 2030.
- New natural gas and renewable plants will account for the majority of generating capacity additions. The natural gas share of electricity generation will remain between 19% and 22% through 2030. Coal's generation share declines from 49% to 45% between 2007 and 2025, then rebounds slightly to 47% in 2030, as a small number of new coal plants are added.
Combined with energy efficiency and renewable energy, these trends shrink the U.S. dependence on imported liquid fuels from roughly 58% of liquid fuel supply today to about 41% of fuel supply in 2030, according to the AEO2009.
Unlike past EIA projections, the report also projects natural gas imports to decline sharply by 2030. The reference case also accounts for recently enacted state and regional policies to address greenhouse gas (GHG) emissions and anticipates a reluctance to invest in carbon-emitting technologies. However, it does not assume that a national or international policy caps the total U.S. GHG emissions.