Oil Demand Slowing, Says Energy Agency

(CBS/AP)  U.S. oil consumption is expected to level off with virtually no growth between now and 2030 because of increases in energy efficiency, greater use of renewable fuels and an expected rebound in oil prices, the government said Wednesday.

The Energy Information Administration said overall energy use will continue to increase but at a slower rate than predicted only a year ago.

The agency projected a 3 percent annual increase of renewable energy use, including solar, wind and biofuels such as ethanol.

As a result, U.S. dependence on foreign oil is expected to decline sharply, the EIA report predicted, with liquid fuel imports - primarily oil - accounting for only 40 percent of U.S. consumption by 2025, compared with 58 percent last year.

Cars that use less gasoline will further reduce oil demand, the agency said. The EIA analysts expect gas-electric hybrid cars to account for 38 percent of the market by 2030, compared with 2 percent last year.

Although oil prices have dropped below $50 a barrel from a high last July of $147 a barrel, the EIA predicts global crude oil costs will again rebound after the current economic problems subside. By 2030, nominal oil prices are expected to be $189 a barrel, equal to $130 in 2007 dollars, said the report.

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Read an early release of the report here.

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The agency's forecast assumes no changes in current laws or regulations, including any mandatory limits on carbon dioxide emissions, in response to climate change. But the agency said its projections assume some additional costs to build cleaner power plants that rely on carbon-intensive fuels and technologies.

If no limits are set on greenhouse gases, the EIA report said U.S. carbon dioxide emissions will continue to rise at an average of 0.3 percent a year, compared with an annual average increase of 1.1 percent since 1990.

President-elect Barack Obama reiterated Monday, as he announced members of his energy and environmental team, that he will push hard to shift the country away from fossil fuels and set limits on greenhouse gas emissions. Such actions could accelerate the reduction of fossil fuel use more than the EIA report anticipates.

Without limits on carbon emissions, the EIA projected that by 2030 the country would continue to rely heavily on fossil fuels, with coal, oil and natural gas accounting for 79 percent of energy use, compared with 85 percent today.

While total electricity use will increase, more of it will be produced from burning natural gas and from renewable sources such as wind, solar and geothermal energy, the report said. Coal will continue to provide 45 percent of electricity generation, a drop from about 50 percent today.

[barbaram99]

Some say they must have a car..Nope. As a people the car has made some too lazy to walk. Years ago my sister wanted to use the family to go next door. It was the house next to my parents. Mum told her to walk and she walked to the house. I was almost to the store and a friend wanted to give me a ride to the store. I said no as the store is front in of us. I can walk faster than cars as they are stuck in the lights. I have to walk or take the bus.

[dfwlexusguy]

Honestly I think alot of our economic problems are because of the oil companies and OPEC. We have less money to spend because of the $4 a gallon gas so the stock markes crumble and the oil companies make record profits. And then OUR tax dollars pay for the bailouts! The oil companies are the ones who need to pay for these bailouts!!!! Not us!

[brannigon]

By 2030, nominal oil prices are expected to be $189 a barrel, equal to $130 in 2007 dollars, said the report. I don''t get it. This is double talk. The price is declining and then they make that statement! If we won''t need the oil as much, why will it go up in 20 years? Just another bunch of bull from the government and the media!!!

[nincomp]

Does this article make ANY logical sense?
It touches on everything and says nothing.
What was the point in it?
Oil consumption will rise, the price of oil will
go up; however, alternatives will be in control.

Posted by rushlimpdrug at 11:12 PM : Dec 18, 2008

Yes, it makes no sense but it''s typical of analysts. You should rather be blaming the news organizations.

[nincomp]

In 2030, the sun will rise in the East. As to whether anyone will be here to see it,... eh?

Posted by Evian_Ycnan at 12:43 PM : Dec 18, 2008

It does so already. You don''t have to wait till 2030 to see sun rising from the East.

[alpine42]

I will go back to eating my donuts and Diet Coke now.
Posted by rushlimpdrug at 11:12 PM : Dec 18, 2008

Right, it may be defeating the purpose, but it''s still better than the donuts and a regular Coke.

[alpine42]

Wow! Imagine that! People start using less gas because of the economy and the price of gas goes down! Imagine if everybody switched to fuel efficient vehicles (and no, I''m not talking about those who need larger vehicles for work or who have larger families), maybe it would stay down. The car, through the decades has made itself a necessity. Having gas is a privilege not a right! It should be everyone%u2019s duty as an American citizen to conserve gas. It''s better for the economy.

[rushlimpdrug]

Does this article make ANY logical sense?

It touches on everything and says nothing.

What was the point in it?

Oil consumption will rise, the price of oil will
go up; however, alternatives will be in control.

Is that what the writer is saying?

I will go back to eating my donuts and Diet Coke now.

[cbscrash072]

Imagine its 1980 and you have to predict were the personal computer will be in twenty years. Keep in mind that it hasn''t even been invented yet. Thats what this report does so its absolutely worthless. Theres a guy in Canada and if his ideas bear fruit we won''t use any oil in 2030.

[barbaram99]

i don''t own a car as it is useless to me as a legally blind person. I hate cars. They put too many on the roads. Can ye do with out a car? Most can''t handle that. I am 54 and childless. I am mindful of the price of oil. Yep. we have to recycle. I could never understand the use it once and tosss it line. Some things have to be for health reasons. I thing the govt used more oil than us. They do.