This is an excerpt from EERE Network News, a weekly electronic newsletter.

April 01, 2009

EIA: High Oil Prices, GHG Controls Would Help Clean Energy Grow

The growth of renewable energy and renewable fuels in the United States will be significantly greater under scenarios involving high oil prices and stricter controls on greenhouse gas (GHG) emissions, according to DOE's Energy Information Administration (EIA). The EIA released its full Annual Energy Outlook on March 31, and it includes an examination of alternate scenarios for the future of U.S. energy. (See the article from the EERE Network News on the reference case, which was released in mid-December 2008.) One such alternate scenario involves oil prices that reach $200 per barrel by 2030, rather than $130 per barrel under the reference case. That higher price drives biofuel production up by about 10%, reaching 40 billion gallons in 2030. It also cuts the percentage of imported liquid fuels from 41% of U.S. fuel demand in 2030 in the reference case to only 30% of U.S. fuel demand in the case of high oil prices.

Likewise, limits on GHG emissions spur renewable energy production, particularly for electrical power supplies. Although the EIA report examines only one legislative scenario—the legislation proposed by Senators Lieberman and Warner in the 110th Congress—it found a strong shift toward renewable energy, nuclear power, and fossil fuels with carbon capture and storage under that scenario. In fact, the percentage of the nation's electricity generated with non-hydroelectric renewable energy sources doubles under the GHG controls, from a 9% share in 2030 in the reference scenario to an 18% share under the climate legislation. Note that the report doesn't account for legislation signed after November 2008, so it doesn't include the effects of the American Recovery and Reinvestment Act of 2009. See the EIA's Annual Energy Outlook 2009.