New EIA Energy Outlook Projects Flat Oil Consumption to 2030, Slower Growth in Energy Use and Carbon Dioxide Emissions, and Reduced Import Dependence

The “Annual Energy Outlook 2009” reference case released today by the Energy Information Administration presents updated projections for U.S. energy consumption and production through 2030. 


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 2007to 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.


Total Primary Energy Use and Energy-Related Carbon Dioxide Emissions: 

Efficiency policies and higher energy prices in the report 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 report reference case, reaching a level of 6,410 million metric tons in 2030, as compared with 6,851 million metric tons in the reference case.


Oil Prices:  The assumption of a higher world oil price path in the 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 reference case. This rapid growth reflects the EIA renewable fuels 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.


Modeling Methodology:  The report 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.   


Other highlights of the EIA case projections include:


* Coal, oil, and natural gas meet 79 percent of total U.S. primary energy supply requirements in 2030, down from an 85-percent share in 2007.


* Total domestic production of natural gas reaches 23.7 trillion cubic feet by 2030. While exploration and production costs rise over time, higher natural gas prices support the projected level of production.  Onshore production of unconventional natural gas, including shale gas, increases from 9.2 trillion cubic feet in 2007 to 13.2 trillion cubic feet in 2030.


* Ethanol use for gasoline blending grows to 12.2 billion gallons and E85 consumption to 17.3 billion gallons in 2030. The ethanol supply from cellulosic feedstocks reaches 12.6 billion gallons (including both domestic and imported production) in 2030. Biodiesel and biomass-to-liquid diesel fuel use both rise significantly, reaching nearly 2 billion gallons and 5 billion gallons, respectively, in 2030.


* Total electricity consumption, including both purchases from electric power producers and on-site generation, grows from 3,903 billion kilowatthours in 2007 to 4,902 billion kilowatthours in 2030.


* New natural gas and renewable plants account for the majority of generating capacity additions. The natural gas share of electricity generation remains between 19 percent and 22 percent through 2030.  Coal’s generation share declines from 49 percent to 45 percent between 2007 and 2025, then rebounds slightly to 47 percent in 2030 as a small number of new coal plants are added.


Source: EIA


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2 comments on “New EIA Energy Outlook Projects Flat Oil Consumption to 2030, Slower Growth in Energy Use and Carbon Dioxide Emissions, and Reduced Import Dependence

  1. bethlehemsurvivor says:

    New Hampshire Business ReviewFriday March 14, 2008 Taking Credit for Carbon OffsetsIt’s nearly impossible to claim “carbon neutrality” without them by Bob SandersPam Hall, president of Normandeau Associates, a $20 million Bedford-based environmental consulting firm, gives away dozens of carbon offsets — or should we say “windbuilder certificates”? — to clients she does businesses with.

    The certificate reflects Hall’s purchase of offsets from Native Energy, a Vermont for-profit firm that is investing in a South Dakota wind farm being planned for development by the Rosebud Sioux tribe.

    Those credits are retired by Clean Air-Cool Planet, a nonprofit group that works with businesses to fulfill the last step of becoming “carbon-neutral,” not for any regulatory reason — that might come later – but to enhance a company’s image of an environmental steward.

    Actually, you can buy carbon credits that are generated closer to home, from an existing project, such as the North Country Environmental Services landfill in Bethlehem.

    The landfill’s owner – Vermont’s Casella Waste Systems – sold the gas rights to a firm in Boston, Commonwealth Resource Management Corp., which flares the methane, such a potent greenhouse gas that burning it offsets more than 20 tons of carbon monoxide emissions.

    Commonwealth markets those carbon credits or offsets to businesses worldwide through such intermediaries as the Chicago Climate Exchange, whose members sign legally binding contracts to voluntarily binding emission reductions, and through individuals, such as through Commonwealth’s Blue Horizon Web site, where 10 credits are sold for $50.

    Such marketing raises more than the eyebrows of Bethlehem Selectman Lon Weston, who asks, “Why should anyone pay them to do what they have to do, anyway?”

    “They have to torch the stuff,” he said. “If they didn’t burn it, it would stink up the whole town. What a corrupt way of doing business.”

    “It’s the only way they control the odors,” agreed Wayne Wheeler, an engineer with the state Department of Environmental Services’ Solid Waste Management program, who oversees the landfill.

    But on the other hand, the DES does certify that Commonwealth has been responsible for reducing the equivalent of more than 350,000 tons of carbon dioxide emissions since 1998. Other organizations have vouched for the program as well.

    “Capturing and destroying landfill gas is a good thing for the environment,” explained Commonwealth owner Anton Finelli, who said that his business model and the criteria he uses, are just as valid – if not more so – then investing in a new project that may or many not turn into a reality.
    Measuring footprints
    Welcome to the complex and evolving world of voluntary emissions trading, which is a prelude to the carbon credit trading that businesses can look forward to as governments start demanding offsets as part of proposed cap and trade regulatory schemes at the regional (the Regional Greenhouse Gas Imitative, or RGGI), national or even international level.

    “It’s like the Wild West out there,” said Bob Sheppard, chief operating officer and director of the business program for Clean Air-Cool Planet, which a few years ago started rating the myriad providers of carbon offsets.

    Such offsets are not required now, since these regulatory programs are not in place, but they are still desired for those firms and individuals wishing to become “carbon-neutral.”

    Offsets are supposed to be the last resort, not the first step, in neutralizing a carbon footprint. The first thing is to figure out how big that footprint is, and then what steps you can do to lower your company’s emission.

    But hardly any company can finish the job without them, especially when discovering – as yogurt manufacturer Stonyfield Farm, one of the pioneers of the field found — that it doesn’t just consist of direct facility emissions, but also the emissions of your suppliers, your workers, your distributors, even your customers, when using your product. It all depends on where you – and the consulting organization you are working with – draws the line.

    So after you’ve put in the largest solar array in the state (as Stonyfield did) and replaced mortgage closing documents with small compact discs delivered in a canvas bag with a “green earth in hands” logo (which Regency Mortgage does in Manchester) or give employees a $2,500 subsidy to buy a hybrid car (as does Regency and North American Specialty Insurance Company) you still end up contributing to global warming.

    And the only way to offset that contribution is to go out and buy offsets.

    What is accomplished?
    As more and more companies buy offsets, the offsets become more and more valuable, coming from an increasing array of sources. And that raises all sorts of question about what “counts” as a true offset.

    Is it a new project, like the wind farm in South Dakota? Or an existing one, like methane flares in Bethlehem, that would both have happened anyway, without any offsets to encourage them?

    Even some of the companies that profit from some offsets question them.

    Take the Concord Steam plant, located in the state’s capital. Once upon a time, it burned wood chips, but then the price of oil and gas plummeted, so in 1990 it burned those fuels instead.

    But in 2001, it was cheaper to burn wood chips again.

    Chopping down trees and burning them may not be what most people think about when they are fighting global warming, mused Peter Bloomfield, president of Carbon Steam, but wood chips are considered waste from trees that would be cut down anyway.

    In any case, after Carbon Steam switched to wood, it now has generated practically no carbon emissions. Compare that to the base year used on the Chicago Climate Exchange, and Concord Steam now is producing roughly $60,000 worth of carbon credits a year, at prices ranging from $2 to $3.50 a credit.

    As a business owner, Bloomfield is glad to take the money, “but I wonder if it’s really going to accomplish anything. It’s not enough money to support converting from oil to wood if wood wasn’t already cheaper. The reason people are doing it is not to save money, or because they care about environment, but because of the credit.”

    Ironically, Bloomfield might lose some credits because he is now burning waste oil from restaurants. Recycling such oil would be good for the environment, but the technology is too new to count on the exchange. Still, Bloomfield might go for it anyway, because it “offsets me from buying virgin oil.”

    But Sheppard, of Clean Air Cool Planet, thinks this is more than a feel-good exercise. They’ve worked with companies to actually reduce carbon emissions before there is any talk of buying offsets.

    Regency Mortgage, for instance, has taken steps to reduce its carbon footprint, including replacing most of its lighting and offering incentives to employees to buy hybrids, even before the company began to actually measure its activities.

    “I have a deep concern for climate change and how it is going to impact our world, particular in New Hampshire,” said Quentin Keefe, president of the company.

    Big footprints
    Eventually companies do want offsets, either to become completely carbon-neutral or for carbon-neutral events, such as to offset the impact of jet fuel used to attend a conference, for instance.

    Stonyfield Farm began tracking its energy use back in 1990. It starting buying credits in 1997 to offset its facility’s energy use, but soon realized that the facility only accounted for a small part of its footprint. Most came from methane produced in milk production and packaging and distribution.

    So it launched its Mission Action Plan to create teams addressing how to reduce waste and increase efficiency at every step in the process, from waste generation to packaging to milk production.

    Despite all this, Stonyfield continues to invest in carbon offsets with Clean Air-Cool Planet, which has been working with Native Energy for more than five years now on alternative developing energy projects on tribal lands.

    One project, the Rosebud Sioux wind farm, started as a simple windmill. Native Energy gave the developers $250,000 to purchase a 20-year supply of future credits in that one windmill.

    Now the developers are working on financing a full-scale wind farm. The Sioux tribe will not only get income from the turbines, but jobs to maintain them.

    “We prefer bringing new sources online,” said Sheppard.

    Above and beyond
    Contrast that to a landfill where trash has been dumped for years and methane has been flared for over a decade.

    Commonwealth didn’t just start out flaring the methane. For the first five years, it used that energy to evaporate the leachate from the trash in the landfill. By evaporating it, Commonwealth not only got rid of the methane, it also reduced the volume of the landfill’s liquid waste, saving trucking costs (and carbon emissions), as well as the cost and energy to treat it later.

    “But no good deed goes unpunished,” said Finelli.

    Some neighbors were concerned about the emissions: about 6.5 tons of particulates, including 2 tons of sulfur dioxide, 10.5 tons of nitrogen and 15.8 tons of carbon monoxide in 2007, according to DES.

    These numbers are relatively low, said Pam Monroe, compliance bureau administrator in the air resources divisions — but try telling that to some of the residents in the town.

    Furthermore, residents complained that the evaporator wasn’t burning hot enough, resulting in toxics getting into the air. DES inspected it, and found that the emissions were murky enough to warrant further testing of the ambient air, Monroe said. After some back and forth, the company agreed to test, but then Casella Waste Systems, owner the landfill, ended the contract, and the whole point became moot.

    “DES was finally about to test the air, and then they decided to shut it down,” said Weston.

    But Joe Fusco, vice president of Casella Waste Systems, said that testing had nothing to do with the decision to end the contract. First, the company made some technical improvements at the landfill and was not producing as much leachate, so there wasn’t as much to dispose of.

    Secondly, the company was moving to burning methane to produce electricity at its landfill.

    So for now, Commonwealth is simply flaring the methane, a fairly standard practice to control odors. But Finelli takes issue with the charge that his firm is just getting paid for what it has to do anyway. There is a difference between a requirement to burn the methane (as some larger landfills are required to do under federal regulations) and being required to monitor the methane and only mitigate it when it reaches a certain level. That, he contends, is the case here.

    Therefore, burning methane at the Bethlehem landfill goes above and beyond what is required, and to prove it, he points to the DES registry which gave him credit for reducing emissions.

    “Different programs have different criteria to qualify,” he said. “The main thing on the buy side is whether they are causing something that wouldn’t otherwise have happened. Under our model, the emission reductions have already occurred, and that is a good thing.”

    “A credit is just a credit,” adds Fusco. “People don’t care where it comes from. People get too wrapped up in the sexy part of environmentalism. The real gain is in everyday things.”


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