Nick Snow
OGJ Washington Editor
WASHINGTON, DC, Dec. 17 -- A significant increase in US biofuels production could make the nation less dependent on imported oil, the US Energy Information Administration said in an early release of its 2010 Annual Energy Outlook reference case.
The scenario, which EIA released on Dec. 14, did not include potential impacts of carbon dioxide emissions restrictions and other possible future policies. It also only included technologies that are commercially available or can reasonably be expected to become commercial in the next decade. EIA nevertheless forecast declining US reliance on imported liquid fuels.
“Our projections show that existing policies that stress energy efficiency and alternative fuels, together with higher energy prices, curb energy consumption growth and shift the energy mix toward renewable fuels,” EIA Administrator Richard G. Newell said. “However, assuming no new policies, fossil fuels would still provide about 78% of all the energy used in 2035.”
The reference case forecast a 16% increase in total US liquid fuels consumption, including both fossil liquids and biofuels, to an average 22 million b/d in 2035 from 19 million b/d in 2008. “Biofuels account for all of the growth, as consumption of petroleum-based liquids is essentially flat,” EIA said, adding, “As a result, reliance on imported oil declines significantly over the next 25 years.”
The scenario also envisioned US oil production climbing 20% from 5 million b/d in 2008 to more than 6 million b/d in 2027—where EIA expects it to remain through 2035. It cited more onshore production resulting from wider use of enhanced oil recovery and increased production offshore as primary causes.
It forecast that total US energy consumption would grow by 14% from 2008 to 2035 as fossil fuels’ share declines from 84% to 78%. “Recent federal and state policies, and rising energy prices could moderate growth in energy consumption and shift it to renewable fuels,” EIA indicated.
The forecast reflected changed assumptions at EIA about the domestic oil and gas resource base, including an updated characterization of natural gas shales to reflect evolving assessments and technology.
It predicted that shale gas and Alaska production would offset other US gas supply declines to meet growing demand and reduce import needs through 2035. The result under this reference case was that total US gas production would grow 13% from 20.6 tcf in 2008 to 23.2 tcf in 2035, including a 6 tcf shale gas contribution.
EIA also predicted that gas prices at the wellhead will begin to recover from their 2008-09 trough and gradually rise to around $8/Mcf by 2035. It expects oil costs to wide steadily and will include a wide range of prices when it releases its full 2010 Annual Energy Outlook early next year.
Contact Nick Snow at [email protected].
Rystad Energy.
