EIA: US won't meet 2022 biofuels mandates

By Ron Kotrba | January 03, 2009
Web exclusive posted Dec. 21, 2008, at 11:55 a.m. CST

In its Annual Energy Outlook 2009, the U.S. Energy Information Administration projected virtually no growth in U.S. oil consumption through 2030 - something that hasn't been done in more than 20 years. More stringent Corporate Average Fuel Economy standards, the renewable fuels standard (RFS), and an assumed rebound in oil prices while the global economy recovers are all factors in achieving this "no growth" scenario, according to the EIA.

"With overall liquid fuel demand in the AEO2009 reference case growing by only one 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 EIA stated in its Dec. 17 report.

Because oil imports are used largely for the production of liquid transportation fuels like gasoline, the impact of ethanol and other renewable fuels is significant. In 2007, homegrown ethanol production and use of 6.5 billion gallons displaced 228 million barrels of imported oil, resulting in $16 billion spent in the U.S. instead of being sent to foreign oil producers.

The EIA also stated that America's ethanol industry wouldn't meet the cellulosic requirement of the RFS by 2022.

In a statement, the Renewable Fuels Association said the EIA, by its nature, is confined to analyzing the situation at present and can't take into account the speed with which America's ethanol industry is innovating. "The renewable fuels standard is an ambitious target and one America's ethanol industry is more than capable of meeting," said Bob Dinneen, president of the Renewable Fuels Association. "The investments being made and research being conducted at the private and public sector level will ensure this industry rises to meet this challenge."

The EIA does project steady, strong growth in renewable energy use through 2030, indicating a 3.3 percent annual growth rate - a reflection of the aggressive renewable fuels standard passed in the Energy Independence and Security Act of 2007, as well as the effectiveness of state renewable portfolio standards driving renewable power generation.

"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," EIA stated. "Hybrid vehicle sales (all varieties) increased from two percent of new light-duty vehicle sales in 2007 to 38 percent in 2030. Sales of plug-in hybrid electric vehicles (PHEVs) will grow to 90,000 vehicles annually by 2014, supported by recently enacted tax credits. By 2030, PHEVs account for two percent of new light vehicle sales."

An increased availability of domestic natural gas resources from unconventional onshore sources, the Outer Continental Shelf, and Alaska has led EIA to project that the net import share of total natural gas use will decline from 16 percent in 2007 to less than three percent in 2030.