U.S. sees renewable energy use doubling by 2030

By Tom Doggett

WASHINGTON (Reuters) - The United States will still rely on oil, natural gas and coal for its main energy supplies through 2030, but ethanol and other renewable energy sources will double during the period, the government's top energy forecasting agency said on Wednesday.

"The higher level of renewable energy consumption is partially a result of higher energy prices...but it also reflects a revised presentation of state renewable portfolio standards," the Energy Information Administration said in its annual long-term forecast.

U.S. ethanol consumption is forecast to grow from 5.6 billion gallons last year to 13.5 billion gallons in 2012, far more than the 7.5 billion gallons in 2012 required by Congress, the EIA said. Ethanol use grows to 17 billion gallons in 2030.

The agency also forecasts strong growth in ethanol imports after 2010 as U.S. tariffs on imported ethanol shipments are expected to expire.

State requirements for utilities to generate more of their electricity supplies from renewable sources like wind and solar power will double renewable energy consumption, excluding hydroelectric power, the agency said.

"The (most) growth will be wind and biomass," EIA chief Guy Caruso told reporters at a briefing on the forecast.

But because renewables represent such a tiny part of energy production, doubling their use will take only a small bite out of demand for fossil fuels. Petroleum, coal and natural gas will still meet 83 percent of total U.S. primary energy supply requirements in 2030, down only slightly from 85 percent in 2006.

"U.S. energy consumption will continue to be met predominantly by traditional fossil fuels," the EIA forecast said.

U.S. demand for petroleum, the main source for transportation fuels, is forecast to rise 0.8 percent a year, from 21 million barrels per day in 2008 to almost 25 million bpd in 2030.

The EIA said its forecast does not reflect legislation being considered by Congress to raise fuel efficiency standards for American cars and trucks by 40 percent by 2020.

If enacted, Caruso said the higher fuel standards would cut U.S. oil demand by 2 million bpd from forecast levels in 2030.

U.S. oil prices would gradually decline from current levels of $90 a barrel to $58 in 2016 ($70 in nominal dollars) and $72 in 2030 ($113 in nominal dollars), as investments in exploration brings new supplies to the world market.

The agency said it expects substantial increases in conventional oil production in several OPEC and non-OPEC countries over the next 10 years.

The Organization of Petroleum Exporting Countries is projected to increase its oil production at a rate that keeps the group's market share of world oil supplies in the range of 40 to 44 percent through 2030, the EIA said.

Highlights of the EIA's long-term forecast include: