EIA Projects a Clean Energy Shift that Stifles Oil Growth
The latest look into the future of U.S. energy use from DOE’s Energy Information Administration (EIA) projects a steady growth in renewable energy use, a dramatic shift toward cleaner vehicles, and a rapid growth of biofuels, resulting in virtually no growth in U.S. oil consumption through 2030.
The reference case for the EIA’s Annual Energy Outlook 2009, released on December 17, projects renewable energy use to increase steadily at 3.3% per year, with renewable energy power plants competing mainly with natural gas for new additions to the nation’s power generating capacity. The EIA’s crystal ball also reveals a significant decline in light truck sales and a sharp increase in the sale of unconventional vehicle technologies, as hybrid vehicles account for 38% of all new vehicle sales by 2030. That includes sales of plug-in hybrids, which account for 2% of all new vehicle sales by 2030.
Meanwhile, ethanol fuel use grows to 29.5 billion gallons in 2030, with nearly 60% of the fuel used in ethanol-rich blends for flex-fuel vehicles. The EIA expects more than 40% of the ethanol to come from cellulosic biomass by 2030. In addition, biodiesel and other renewable diesel fuels will provide another 7 billion gallons of fuel.
Unfortunately, the EIA projects that biofuel production levels will fall short of the federal Renewable Fuels Standard target of 36 billion gallons in 2022, landing closer to 30 billion gallons. By 2030, the EIA expects continued biofuel growth to push total biofuel production well above the target. According to the EIA, the key risk factor is the rate of development of cellulosic biofuels, and the subsequent growth in cellulosic biofuel production.
The EIA reference case is built on projected economic growth of about 2.5% per year, a steady growth in domestic natural gas production, and an assumed long-term increase in oil prices to $130 per barrel by 2030. Combined with energy efficiency and renewable energy, these trends shrink the U.S. dependence on imported liquid fuels from roughly 58% of our liquid fuel supply today to about 41% of our fuel supply in 2030. Unlike past EIA projections, the new report also expects natural gas imports to decline sharply by 2030.
The reference case also accounts for recently enacted state and regional policies to address greenhouse gas emissions, and anticipates a reluctance to invest in carbon-emitting technologies, but it does not assume that a national or international policy caps the total U.S. greenhouse gas emissions. The full report, which examines other scenarios, will be released in the near future. See the EIA press release and the tables and presentations relating to the EIA’s reference case.
Federal Tax Credits Return for Efficiency Improvements to Homes
As you’re ringing in the New Year, it might also be a good time to search your home for air leaks, insufficient insulation, or heating and cooling equipment that needs updating. That’s because the start of 2009 has also revived the federal tax credits for energy efficiency improvements to homes.
Although the original tax credit expired at the end of 2007, it was revived this year as part of the Emergency Economic Stabilization Act of 2008, which President Bush signed back in October 2008.
As noted by the Alliance to Save Energy (ASE), federal tax credits are now available for 10% of the cost of insulation, storm doors, and Energy Star-qualified "cool roofs," up to a limit of $500; for 10% of the cost of exterior windows and skylights, up to a limit of $200; for up to $300 on new high-efficiency air conditioners, heat pumps, water heaters, and corn-fueled stoves; and for up to $150 on high-efficiency furnaces and boilers. Those tax credits expire at the end of this year, but there’s also a tax credit for 30% of the cost of Energy Star-qualified geothermal heat pumps, up to a limit of $2,000, and that doesn’t expire until 2016. For details, see the ASE press release and tax credit Web page.
As noted by the Solar Energy Industries Association (SEIA), the Emergency Economic Stabilization Act also extended a federal tax credit for 30% of the cost of both residential and commercial solar energy installations, while eliminating a $2,000 cap on the tax credit for residential solar electric installations. The law also established a tax credit for 30% of the cost of residential wind energy systems, fuel cells, and microturbines, with different caps on each type of system, and all of these clean energy tax credits are good through 2016.
According to SEIA, the solar investment tax credit provisions will also allow filers of the Alternative Minimum Tax to still take the tax credit, although anyone planning to file for a tax credit should first seek the advice of a tax professional. See the SEIA press release and a summary of all the federal tax credits on the Energy Star Web site.
DOE Awards 16 Contracts for Energy Savings at Federal Facilities
DOE announced on December 18 that it will award 16 new Energy Savings Performance Contracts (ESPCs) that could result in up to $80 billion in energy efficiency, renewable energy, and water conservation projects at federally-owned buildings and facilities.
ESPCs are contracts under which a contractor designs, constructs, and obtains the necessary financing for an energy savings project, and the federal agency makes payments over time to the contractor from the savings in the agency’s utility bills. The contractor guarantees the energy improvements will generate savings, and after the contract ends, all continuing cost savings accrue to the federal agency.
The new contracts will be available to all U.S. federal agencies for use in federal buildings located in the United States and overseas, and each contract allows for up to $5 billion in energy- and water-saving projects, without any restrictions on the technologies used to achieve those savings.
The federal government is the largest single user of energy in the United States. The energy goals outlined in Executive Order 13423, the Energy Policy Act of 2005, and the Energy Independence and Security Act of 2007 require federal agencies to reduce their energy use per square foot of building space to 30% below their 2003 levels by 2015, while also reducing their water usage to 16% below their 2007 usage levels. Federal facilities are also required to draw on renewable energy for at least 7.5% of their electrical needs by 2013. Within DOE, the Transformational Energy Action Management (TEAM) Initiative was launched in 2007 to meet the energy intensity goal. See the DOE press release and the Web sites for the Federal Energy Management Program and the TEAM Initiative.
Residential Water Heaters now Carry the Energy Star Label
DOE announced that as of January 1, Energy Star-qualified residential water heaters are now available. Five types of residential water heaters will be allowed to carry the Energy Star label: high-efficiency, gas-fueled, storage water heaters; gas-fueled condensing water heaters; whole-home, gas-fueled, tankless water heaters; heat pump water heaters; and solar water heaters.
After space heating and cooling, water heating is the second largest energy expense in U.S. homes and represents up to 15.5% of all national residential energy consumption. Energy Star-qualified water heaters can reduce residential water heating bills from 7.5%-55%. Over the next five years, the new water heater criteria are expected to save U.S. consumers $823 million in utility costs, avoid 4.2 million tons of carbon dioxide emissions, and achieve cumulative energy savings of more than 3.9 billion kilowatt-hours of electricity and 270 million therms of natural gas – enough energy to power more than 375,000 homes for a year.
Energy Star is a joint program of DOE and the EPA that seeks to reduce air pollution through increased energy efficiency. More than 9,000 organizations have joined the Energy Star program as partners, and the Energy Star label appears on more than 50 kinds of consumer products.
The new criteria for water heaters was released on April 1, 2008, to allow manufacturers nine months to partner with Energy Star and submit qualifying models for the Energy Star label. Energy Star-qualified storage, whole-home tankless, and solar water heaters are theoretically available now, while gas condensing and heat pump models will be available later in the year. However, the Energy Star Web site currently lists only whole-home tankless versions, which are available from five manufacturers in 56 models, including models fueled with either natural gas or propane. See the DOE press release and the Energy Star Web site.
BLM Finalizes Plans to Open 190 Million Acres to Geothermal Power
The U.S. Department of Interior’s Bureau of Land Management (BLM) has made official its plans to open more than 190 million acres of federal lands for leasing and potential development of geothermal energy resources.
On December 18, the BLM published the "Record of Decision and Approved Resource Management Plan Amendments for Geothermal Leasing in the Western United States." The publication followed the release of the Final Geothermal Programmatic Environmental Impact Statement (PEIS), which the Interior Department published in October 2008. That PEIS was open to a 60-day review by the governors of the affected states, but none of the governors objected to the proposed plan amendments.
The newly issued Record of Decision amends 114 BLM resource management plans and allocates about 111 million acres of BLM-managed public lands as open for leasing. An additional 79 million acres of National Forest System lands are also legally open for leasing, although the U.S. Forest Service will need to evaluate its land use plans and amend them as needed through a separate environmental review process. The Record of Decision was published in the Federal Register on December 30.
The BLM’s Record of Decision and amendments of its resource management plans is intended to simplify the process for future geothermal leasing. From now on, when a BLM office receives a nomination or application for geothermal leasing, it will be able to quickly determine if the proposed leasing area falls within the scope of the new Record of Decision. If so, the office can proceed to evaluate the proposed leasing area without preparing further plan amendments or Environmental Impact Statements.
However, the BLM office will still need to conduct additional environmental reviews to comply with such laws as the Endangered Species Act and the National Historic Preservation Act, and to assure that no thermal or hydrological features of nearby National Park System lands would be affected by geothermal power development on the proposed lease areas. Of course, any lands that are administratively closed to geothermal leasing, such as wilderness areas and national parks, will remain unavailable for leasing. By the way, until recently there was no official name for BLM-managed lands, but as of December, they finally have a name: the National System of Public Lands. See the Interior Department’s press releases on the geothermal leasing and the National System of Public Lands, and for detailed information, see the official Record of Decision (PDF 2.3 MB).
DOE Offers up to $200 Million for Integrated Biorefineries
DOE is offering up to $200 million over the next six fiscal years, subject to annual appropriations, to support the development of pilot- and demonstration-scale integrated biorefineries, which employ a combination of non-food feedstocks and conversion technologies to produce advanced biofuels.
Integrated biorefineries may produce several biofuels and may also produce side products such as biobased chemicals, heat, and power. DOE is encouraging proposals to use advanced biomass feedstocks such as algae or to produce innovative biofuels such as bio-butanol or "green" gasoline. The agency anticipates making approximately 5-12 cost-shared awards under its Funding Opportunity Announcement, which was issued on December 22.
DOE plans to select biorefinery projects that will be operational within three to four years after the applicants are selected, and the facilities should be intended to lead to commercialization in the near term. Mandatory letters of intent are due by February 20, and completed applications are due by April 30. The new funding opportunity adds to the more than $1 billion DOE has already committed to research, development, and demonstration of cellulosic biofuels technology. See the DOE press release, as well as the full text of the Funding Opportunity Announcement on Grants.gov.
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Kevin Eber is the Editor of EREE Network News, a weekly publication of the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE).
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