Annual Energy Outlook 2009: No Growth In U.S. Oil Consumption

Dec 17: The Energy Information Administration (EIA) has released its Annual Energy Outlook 2009 (AEO2009) reference case that presents updated projections for U.S. energy consumption and production through 2030. EIA notes that 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. The following is a brief EIA summary of major issues.

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.

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.

Oil Prices: 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).

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.

Vehicle Characteristics: 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.

The Union of Concerned Scientists (UCS) completed an initial review of the AEO2009 and reports that it contains a "dramatic turnaround" in the projection of new coal-fired power plants which are significantly reduced from earlier projections. UCS says, "EIA has reduced its 2030 projection of new coal plants from 104 GW to 46 GW. . . This is the equivalent of nearly 100 typical-size new coal plants (600 MW), and indicates that EIA expects the trend of coal plant cancellations and rejections to continue."

Access a release from EIA (click here). Access links to a summary presentation and the various AEO2009 tables (click here). Access a release from UCS and brief analysis (click here). [*Energy, *Climate]