It’s the 1 million barrel per day question.
By 2035, US petroleum imports could drop as low as one in every four barrels consumed, but achieving that much import reduction depends heavily on raising vehicle mileage standards.
“The American economy does not have an oil addiction,” said Emil Frankel, visiting scholar at the Bipartisan Policy Center (BPC). “The American transportation system has an oil addiction.”
Speakers at the BPC’s June 27 forum on the Energy Information Administration’s (EIA) just-released Annual Energy Outlook all agreed with its forecast that crude oil imports will continue to drop as domestic supply rises and demand falls.
The US peak for imports was 2005-06, when Americans imported 60% of oil consumed. That has dropped to 49% in 2010, and the EIA’s “reference case,” its median forecast, foresees petroleum imports down to 36% by 2035.
But EIA says a variety of factors could make that percentage as high as 41% or as low as 24%, a difference of about 2.5 million barrels/day.
Fuel Efficiency a Crucial Factor in Reducing Oil Imports
Key factors shifting the numbers include how much oil is produced from shales and other unconventional sources whose potential is just being uncovered, how much more biofuels and natural gas liquids can be substituted for crude in fuels and industrial feedstocks, and how much more efficient buildings are made.
But the largest single demand-side factor is vehicle efficiencies – how much petroleum Americans burn in their cars, trucks, and buses. Some 70% of Americans’ current oil consumption – about 13.5 million b/d – goes for transportation.
The Obama administration in 2009 got industry agreement to increase auto fleet efficiency through 2016 to about 34 miles per gallon average, raising the so-called CAFE standards for the first time in decades. Last year, the administration proposed increasing the standard up to an effective 54 mpg by 2025.
Auto manufacturers have brought out an array of new models, including gasoline-only models that get 40 mpg and a wider choice of hybrids.
…the peak appears to be in the rear-view mirror.” – Turnure, EIA
Because the 2017-2025 proposal isn’t final, EIA didn’t include it in the reference case that led to the 36% imports projection. But the agency did test out what enactment of the standard could mean for US oil use, as the numbers of more efficient vehicles on the road increased.
The difference, by 2035, comes out to a reduction of 1.6 million barrels a day in petroleum and other liquid fuels like ethanol and biodiesel. How much each fuel is affected depends on the interplay of federal requirements for renewable fuels and blending as well as on how fast more efficient autos get into consumers’ garages.
Find additional Breaking Energy coverage of alternative transportation fuels here and here.
EIA’s Jim Turnure said even the auto efficiency gains made just in the last couple of years are “a big deal” for oil consumption. Increasing numbers of cars are either hybrids or fully fueled with alternatives like biodiesel, E85 ethanol and electricity, and improvements in gasoline engine efficiency are continuing.
Turnure said motor gasoline remains the dominant transportation fuel, “but the peak appears to be in the rear-view mirror.”
