U.S. dependence on foreign oil will drop dramatically over the next two decades as Americans are expected to confront rebounding oil prices, use more biofuels like ethanol and drive more fuel-efficient cars, the Energy Department predicted Wednesday.
But the long-range energy forecast also said that coal, oil and natural gas — all of which produce gases linked to climate change — will provide nearly 80 percent of the country's energy in 2030, barring mandatory limits on carbon dioxide emissions that most likely would cause that percentage to decline.
The analysis by the department's Energy Information Administration projects virtually no growth in U.S. petroleum use through the year 2030 because of wider use of ethanol and biodiesel and a push toward greater automobile fuel efficiency including the growing popularity of gas-electric hybrid vehicles.
It is the first time in more than 20 years that petroleum demand in the United States is projected to be essentially flat for years to come, said Howard Gruenspecht, the EIA's acting director. It "breaks this trend" of steady annual petroleum demand increases dating back to the 1980s, he said. The reversal began this year with U.S. petroleum use expected to decline by a million barrels a day, or about 5 percent, compared with 2007.
As a result, net U.S. petroleum imports are expected to decline sharply, the EIA report predicted, with liquid fuel imports — primarily oil — accounting for only 40 percent of U.S. consumption by 2025, compared with 58 percent last year. That's still higher than what the United States imported in the early 1970s when foreign oil one year accounted for only 28 percent of domestic consumption.
But such an expected easing of U.S. reliance on imports comes at a time when greater energy independence has been at the center of both political and economic debate.
President-elect Barack Obama, in announcing his key energy and environment advisers on Monday, said America's heavy dependence on foreign oil is "eclipsed only by the long-term threat of climate change." Disputes over drilling in environmentally sensitive areas off the Atlantic and Pacific coasts and in an Alaska wildlife refuge have largely hinged on arguments over foreign oil addiction.
The EIA report says America's lessening of its oil appetite stems from an expected strong expansion of alternative fuels with a 3.3 percent a year growth in the use of renewable fuels — not only for electricity generation but also as a motor fuel.
Ethanol and biodiesel will be used much more widely as motor fuels and a new generation of cars hit showrooms. Sixty percent of car sales by 2030 are likely to be vehicles that rely heavily or exclusively on fuels other than gasoline including conventional hybrids, plug-in hybrids that are powered by the electric grid, and flex fuel vehicles that use 85 percent ethanol, said Gruenspecht.
The report said gas-electric hybrid cars, which automakers and consumers already have embraced, will account for 38 percent of the market by 2030, compared with 2 percent last year, the report suggests.
But oil prices also are expected to keep U.S. petroleum demand in check.
Although crude oil prices have fallen dramatically since their peak last July of $147 a barrel — tumbling below $40 a barrel Wednesday for the first time since 2004 — the EIA predicts global crude oil costs will rebound after current economic problems subside. By 2030, nominal oil prices are projected to be $189 a barrel, equal to $130 in 2007 dollars, said the report.
The agency's forecast assumes no changes in current laws or regulations, including any mandatory limits on carbon dioxide emissions in response to climate change.
Gruenspecht acknowledged that if Congress enacts limits on carbon emissions, some of the report's conclusions will change. But he said the report does not ignore the prospect of lawmakers putting a cost on carbon altogether because one cannot "assume this issue away."
Wilfrid Kohl, an energy and environment expert at Johns Hopkins University, said a limit on greenhouse gases "would obviously change" some of the EIA's projections. "It certainly would put a greater constraint on coal production and consumption," Kohl said in an interview. But he added that such a carbon cap would generally push energy use patterns in the same direction that the EIA report already is heading.
While total electricity use will increase, more of it will be produced from burning natural gas and renewable sources such as wind, solar and geothermal energy, the report said. Coal will continue to provide 45 percent of electricity generation, a drop from about 50 percent today.
On the Net:
Energy Information Administration: http://www.eia.doe.gov
Source: AP News