Fuel Rules Could Cut Oil Dependence: U.S. Demand to Rise Through 2030, Energy Chief Says

By Justin Hyde, Detroit Free Press

Mar. 5–WASHINGTON — Tougher fuel economy standards enacted last year will reduce U.S. oil demand and make the country less reliant on foreign sources of energy, the head of the government’s energy forecasting service said Tuesday.

But Guy Caruso, head of the U.S. Energy Information Administration, also said the nation’s energy demand and global warming pollution would continue to grow through 2030, and warned that new forms of ethanol may not be ready to meet goals set by Congress.

The EIA’s annual energy forecasts are widely used by lawmakers, environmentalists and industries. But the EIA has been criticized in recent months for not forecasting the run-up in oil prices to more than $100 a barrel. Caruso said Tuesday the EIA expected oil prices to decline from today’s highs to $57 a barrel by 2016, but said speculation was playing some role in boosting prices today.

Caruso said the new fuel economy standards of 35 miles per gallon by 2020 for cars and trucks, with required increases afterward, would cut U.S. oil demand by 2.5 million barrels a day by 2030, or about 12% of today’s demand.

That decrease, along with new targets for biofuel production, reduces U.S. dependence on imported fuels from 60% of demand today to 51% in 2022, with a slight rebound to 54% in 2030.

What the new energy bill will not do is curb America’s thirst for energy, which will grow by about 0.7% a year through 2030. While the fuel economy standards save oil, those savings are overwhelmed by an increase in energy demand from more planes, trains and automobiles taking more trips.

Caruso also said the agency did not believe new forms of cellulosic ethanol from sources other than corn would ramp up quickly enough to meet the target set by Congress last year of 36 billion gallons of biofuels by 2022.

Despite more renewable sources of energy, the agency also expects the annual U.S. output of carbon dioxide and other global warming gases to grow by 0.6% a year through 2030, a 16% increase from today’s levels. Scientists have said worldwide carbon emissions would have to fall 60% to 80% by 2050 to contain global warming.

Contact JUSTIN HYDE at 202-906-8204 or jhyde@freepress.com.

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