EIA Forecast Sees Growing Role for Bioenergy by 2035

This week, the Energy Information Agency (EIA) released its revised annual forecast for U.S. energy production and consumption through 2035. The agency increased its estimate for liquid biofuel consumption by 2035 and predicts that growth in electric power production using biomass will account for 30 percent of the growth in renewable electric power generation by 2035. If existing policy incentives are extended, the growth in bioenergy and other renewables will be even greater.

The EIA’s Annual Energy Outlook 2012 (AEO2012) projects that U.S. dependence on imported petroleum will fall even faster than in its 2011 forecast, thanks in large part to increased production of domestic biofuels. Imports would drop from 49 percent of consumption in 2010 to 36 percent in 2035. Other contributing factors would include increased domestic oil production and reduced growth in demand. The report notes that proposed increased fuel economy standards would reduce the need for imports even more.

The AEO2012 notes that the market for E10 ethanol is approaching saturation, and it is pessimistic about the prospects for rapidly developing advanced next generation cellulosic ethanol and drop-in biofuels. Nonetheless, the AEO2012 model predicts a slightly higher level of biofuel consumption in 2035 than it predicted in 2011.

In the electric power sector, the AEO2012 model projects that, “excluding hydroelectricity, renewable energy consumption in the electric power sector grows from 1.4 quadrillion Btu in 2010 to 3.4 quadrillion Btu in 2035, with biomass accounting for 30 percent of the growth and wind 44 percent.”

Renewable electric power production will grow even faster if current policies are extended, according to the report. "The share of U.S. electricity generation coming from renewable fuels (including conventional hydropower) grows from 10 percent in 2010 to 16 percent in 2035. In the AEO2012 Reference case, Federal subsidies for renewable generation are assumed to expire as enacted. Extensions of such subsidies could have a large impact on renewable generation."

In related news, at a briefing this week at the Center for Naval Analyses (CNA), a panel of retired top military officers underscored the importance of reducing U.S. oil dependence. The briefing presented the findings of a recent report "Ensuring America's Freedom of Movement: A National Security Imperative to Reduce U.S. Oil Dependence" .

For previous EESI posts on U.S. petroleum insecurity, click here and here .