EIA projects that biofuels will fall short of the 2022 RFS target, but will exceed 36 billion gallons by the early 2030s. AEO2012 also projects that efficiency improvements mostly offset underlying drivers of growth in transportation services.

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While the reference case generally assumes current laws and regulations, there are some gray areas. EIA added a premium to the capital cost of CO₂-intensive technologies to reflect current market behavior regarding possible future policies to mitigate greenhouse gas emissions. It also assumed implementation of existing regulations that enable the building of new energy infrastructure and resource extraction.

The Reference case includes technologies that are commercial or reasonably expected to become commercial over next decade or so, including projected technology cost and efficiency improvements, as well as cost reductions linked to cumulative deployment levels. It does not assume any revolutionary or breakthrough technologies.

Under the Reference case, domestic crude oil production is expected to grow by more than 20% over the coming decade; already, domestic crude oil production increased from 5.1 million barrels per day in 2007 to 5.5 million barrels per day in 2010. Over the next 10 years, continued development of tight oil (e.g., shale oil) combined with the development of offshore Gulf of Mexico resources are projected to push domestic crude oil production to 6.7 million barrels per day in 2020, a level not seen since 1994.

Other findings from the AEO2012 Reference case include:

• US production of natural gas is expected to exceed consumption early in the next decade. The United States is projected to become a net exporter of liquefied natural gas (LNG) in 2016, a net pipeline exporter in 2025, and an overall net exporter of natural gas in 2021. The outlook reflects increased use of LNG in markets outside of North America, strong domestic natural gas production, reduced pipeline imports and increased pipeline exports, and relatively low natural gas prices in the United States compared to other global markets.

• Use of renewable fuels and natural gas for electric power generation rises. The natural gas share of electric power generation increases from 24% in 2010 to 27% in 2035, and the renewables share grows from 10% to 16% over the same period.

  In recent years, the US electric power sector’s historical reliance on coal-fired power plants has begun to decline. Over the next 25 years, the projected coal share of overall electricity generation falls to 39%, well below the 49% share seen as recently as 2007, because of slow growth in electricity demand, continued competition from natural gas and renewable plants, and the need to comply with new environmental regulations.

• Total US energy-related CO₂ emissions remain below their 2005 level through 2035. Energy-related CO₂ emissions grow by 3% from 2010 to 2035, reaching 5,806 million metric tons in 2035. They are more than 7% below their 2005 level in 2020 and do not return to the 2005 level of 5,996 million metric tons by the end of the projection period.

  Emissions per capita fall by an average of 1% per year from 2005 to 2035, as growth in demand for transportation fuels is moderated by higher energy prices and Federal fuel economy standards.

  Proposed fuel economy standards covering model years 2017 through 2025 that are not included in the Reference case would further reduce projected energy use and emissions. Electricity-related emissions are tempered by appliance and lighting efficiency standards, State renewable portfolio standard requirements, competitive natural gas prices that dampen coal use by electric generators, and implementation of the Cross-state Air Pollution Rule.

• World oil prices rise in the Reference case, as pressure from growth in global demand continues. In 2035, the average real price of crude oil in the Reference case is $146 per barrel in 2010 dollars. World liquids consumption grows from 87.1 million barrels per day in 2010 to 109.7 million barrels per day in 2035, driven by growing demand in China, India, the Middle East and other developing economies.

• Total US primary energy consumption, which was 101.4 quadrillion Btu in 2007, grows from 98.2 quadrillion Btu in 2010 to 108.0 quadrillion Btu in 2035. The fossil fuel share of energy consumption falls from 83% of total US energy demand in 2010 to 77% in 2035.

• Net imports of energy meet a declining share of total US energy demand as domestic energy production increases. The projected net import share of total U.S. energy consumption in 2035 is 13%, compared with 22% in 2010 and 29% in 2007.

The full AEO2012 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 late Spring 2012, along with regional projections.

Resources

• AEO2012 Early Release presentation

• Reference case projections from the Early Release Overview of the AEO2012