The U.S. DOE’s Energy Information Administration released its Annual Energy Outlook 2011 on Dec. 16, which contains its base energy forecasts for the next year. The full report, which will contain differing assumptions, such as high or low prices for oil, will be released in the spring, said Peter Gross, EIA analyst. 

Gasoline prices are forecasted to increase from $2.35 per gallon in 2009 to $3.69 by 2035. The number is lower than what was forecasted by the EIA last year. By 2022, the retail price of gas is predicted to be $3.43 per gallon, compared to $2.68 for E85. Because gas has a higher energy content, the prices are actually similar per mile traveled, the report said. 

Prices for E85 are expected to shift from a volumetric basis to an energy-equivalent basis compared to the energy content in gas. Gross told EPM he sees this happening as E85 becomes more prevalent in the marketplace and consumers gain awareness about the fuel. He envisions a day when consumers don’t pay as much attention to price per gallon of fuel, rather judging E85 by how many miles traveled for the price.

The EIA’s projections for cellulosic biofuel are different than what was projected last year, with forecasts for some biofuels up, such as cellulosic ethanol, and others down, Gross said. Although it’s difficult to know for certain, the EIA projects that overall there won’t be enough cellulosic biofuels to meet the renewable fuel standard targets by 2022. The report forecasted the 2022 target of 36 billion gallons would be modified to 25.7 billion gallons. 

U.S. consumption of liquid fuels, both fossil and biofuels, is projected to increase from 18.8 million barrels per day, in 2009 to 22 million barrels per day in 2035. As always, the transportation sector sucks up the lion’s share of liquid fuels, at 72 percent of total consumption in 2009 with a slight increase to 74 percent in 2035. 

The forecast also called for imports to meet a major but declining share of total U.S. energy demand. In 2005, U.S. dependence on imported liquid fuels reached 60 percent and by 2009 it had decreased to 52 percent. That percentage, which is measured as a share of total liquid fuel use, is expected to continue declining to 42 percent in 2035, the report said. This decrease is thanks to increased use of renewable fuels produced domestically; the adoption of efficiency standards, which reduces demand; and rising energy prices. “Rising fuel prices also spur domestic energy production across all fuels, which moderates growth in energy imports,” the report said. 

For example, production of U.S. crude oil was at 5.4 million barrels per day in 2009 and is projected to increase to 6.1 million barrels per day by 2019. However, it will decline slightly from that level to 5.7 million barrels per day in 2035. “Production increases come from onshore enhanced oil recovery projects and shale oil plays,” the report said.

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