EIA: Energy market shifting towards nuclear, biofuels, coal-to-liquids mp2

The “Annual Energy Outlook 2007,” released Dec. 5 by the Energy Information Administration, reflects the evolution of energy markets in an era of high prices, the administration said.

The Annual Energy Outlook, projects growth in nuclear capacity and generation, more biofuels (both ethanol and biodiesel) consumption, growth in coal-to-liquids capacity and production, growing demand for unconventional transportation technologies, and accelerated improvements in energy efficiency throughout the economy in 2007.

(The full AEO2007 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 in early 2007, along with regional projections and a report on the major
assumptions underlying the projections, the EIA said.)

Despite the projected rapid growth of biofuels and other non-hydroelectric renewable energies and the expectation of the first new orders for nuclear power plants in over 25 years, oil, coal and natural gas are nonetheless projected to provide roughly the same 86 percent share of the total U.S. primary energy supply in 2030 as they did in 2005, absent changes in existing laws and regulations, the EIA said.

This reflects a situation in which rapid growth in the use of biofuels and other non-hydro renewable energy sources begins from a very low current share of total energy use, the share of a growing electricity market supplied from nuclear power falls despite projected new plant builds, and hydroelectric power production, which accounts for the bulk of current renewable electricity supply, is stagnant, the EIA said.

Here is a slightly condensed and edited version of the remainder of the Outlook for 2007:

Projected energy prices and recently enacted public policy help to support greater use of alternative fuels, such as ethanol, biodiesel and CTL. The Outlook projects that ethanol use grows from 4 billion gallons in 2005 to 11.2 billion gallons in 2012 and 14.6 billion gallons (about 8 percent of total gasoline consumption by volume) in 2030. Projected ethanol consumption in 2012 far exceeds the 7.5 billion gallon requirement of the Renewable Fuel Standard enacted as part of the Energy Policy Act of 2005 (EPACT 2005).

Alternative sources of distillate fuel are also projected to grow to over 7 percent of the total distillate pool by 2030, when consumption of biodiesel, also supported by tax credits in EPACT2005, reaches 0.4 billion gallons and distillate produced from CTL reaches 5.7 billion gallons.

The Outlook also forecasts growing penetration by unconventional vehicles technologies. Sales of flex-fuel vehicles, which are capable of using gasoline and E85, are projected to reach 2 million per year in 2030. Sales of hybrids, including both full and mild hybrids, are also projected to reach roughly 2 million per year 2030, while diesel vehicles sales reach 1.2 million. Including other unconventional vehicle technologies (e.g., gaseous, electricity, fuel cells), in total they account for almost 28 percent of projected total new light-duty vehicles sales in 2030, up from just over 8 percent in 2005.

Other highlights of the AEO2007 include:

*Total energy demand is projected to increase from 100.2 to 131.2 quads between 2005 and 2030, an average annual increase of 1.1 percent, in a scenario where the U.S. gross domestic product grows at an average annual rate of 2.9 percent.

*Real world crude oil prices (2005 dollars), which are expressed in terms of the average price of imported light low-sulfur crude oil to U.S. refiners, are projected to decline gradually from their 2006 average level through 2015 as new supplies come to market in response to the higher prices and expanded exploration and development investments. After 2015, real prices begin to rise as demand continues to grow and higher cost supplies are brought to market. In 2030, real world crude oil prices are projected to reach over $59 per barrel in 2005 dollars, or about $95 per barrel in nominal dollars.

*The net import share of total liquids supply, including crude oil and refined products, drops from 60 percent of total liquids supply in 2005 to 54 percent in 2009 and then increases, reaching 61 percent in 2030. Imports of refined petroleum products account for 20 percent of total net imports in 2030.

*Carbon dioxide emissions from energy use are projected to grow at an average annual rate of 1.2 percent per year, from 5,945 million metric tons in 2005 to 7,950 million metric tons in 2030, reflecting growth in fossil fuel demand. The carbon dioxide emissions intensity of the U.S. economy is projected to fall from 538 metric tons per million dollars of GDP in 2005 to 353 metric tons per million dollars of GDP in 2030, an average decline of 1.7 percent per year.