|January 26, 2009|
Annual Energy Outlook 2009
|(Globe-Net) - Last month the U.S. Energy Department’s Energy Information Administration (EIA) published its early release version of the Annual Energy Outlook 2009 Report (AEO2009). It provides updated projections for U.S. energy consumption and production through 2030. A number of significant points were contained in the new draft, which will be of interest to business leaders in preparing mid to long term business strategies. |
Oil Use and Import Dependence
For the first time in more than 20 years, the new AEO reference case projects virtually no growth in U.S. oil consumption, reflecting the combined effect of recently enacted CAFE standards, requirements for increased use of renewable fuels, and an assumed rebound in oil prices as the world economy recovers.
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 percent in 2007 to less than 40 percent in 2025 before increasing to 41 percent in 2030.
Natural Gas Use and Import Dependence
The reference case raises EIA’s projection for U.S. production and consumption of natural gas, reflecting increased availability of resources and higher demand for electric power generation. With growing production of natural gas from unconventional onshore sources, the Outer Continental Shelf, and Alaska, the net import share of total natural gas use also declines, from 16 percent in 2007 to less than 3 percent in 2030 (Figure 2).
Total Primary Energy Use and Energy-Related Carbon Dioxide Emissions
Efficiency policies and higher energy prices in AEO2009 slow the rise in U.S. energy use, which is projected to grow from 101.9 quadrillion Btu in 2007 to 113.3 quadrillion Btu in 2030. When combined with the increased use of renewables and a reduction in projected additions of new coal-fired conventional power plants, this slows the growth in energy-related GHG emissions.
Energy-related CO2 emissions grow at 0.3 percent per year from 2007 to 2030 in the AEO2009 reference case, reaching a level of 6,410 million metric tons in 2030, as compared with 6,851 million metric tons in the AEO2008 reference case (Figure 3).
The assumption of a higher world oil price path in the AEO2009 reference case reflects tighter constraints on access to low cost oil supplies in a setting where the forces driving growth in long-term demand in non-OECD countries remains as strong as previously expected. In 2007 dollars, the world crude oil price, averaging near $60 in 2009, rises as the global economy rebounds and global demand once again grows more rapidly than non-OPEC liquids supply. In 2030, the average real price of crude oil is $130 per barrel in 2007 dollars ($189 per barrel in nominal dollars) (Figure 4).
Renewable Energy Use
Total consumption of marketed renewable fuels - including wood, municipal waste, and biomass in the end use sectors; hydroelectricity, geothermal, municipal waste, biomass, solar, and wind for electric power generation; ethanol for gasoline blending; and biomass-based diesel - grows by 3.3 percent per year in the AEO2009 reference case. This rapid growth reflects the EISA2007 renewable fuel standard and strong growth in the use of renewables for electricity generation that is spurred by renewable portfolio standards for electricity generators in many States.
A sharp increase in the sale of unconventional vehicle technologies, such as flex-fuel, hybrid, and diesel vehicles, and a significant decline in the new light-truck share of total light-duty vehicle sales are projected. Hybrid vehicle sales (all varieties) increase from 2 percent of new light-duty vehicle sales in 2007 to 38 percent in 2030. Sales of plug-in hybrid electric vehicles (PHEVs) grow to 90,000 vehicles annually by 2014, supported by recently enacted tax credits. By 2030, PHEVs account for 2 percent of new light vehicle sales (Figure 5).
The AEO2009 reference case assumes no changes in current laws and regulations. However, it reflects the behavior of investors and regulators who, in their investment evaluation process, are implicitly (or explicitly) adding a cost to many proposed power plants that employ GHG-intensive technologies. Additions of new coal-fired power plants are significantly reduced from earlier projections.
The reference case projections from the Early Release Summary of AEO2009 are available at www.eia.doe.gov/oiaf/aeo/index.html. The full AEO2009 report, including projections with differing assumptions on the price of oil, the rate of economic growth, and the characteristics of new technologies, will be released later in 2009, along with regional projections.
Portions of the early release report are available for download.