Biofuels to account for fuel production growth: EIA

WASHINGTON — As energy consumption grows, there will be a greater use of renewable fuels over the next 25 years within the transportation sector, according to the U.S. Energy Information Administration.

In its Annual Energy Outlook 2010, the EIA analyzed energy trends between now and 2035.

"The growth in consumption of renewable fuels is primarily a result of federal and state programs-including the federal renewable fuels standard (RFS), various state renewable portfolio standard (RPS) programs, and funds in ARRA-together with rising fossil fuel prices," the EIA said.

Over the next 25 years, fossil fuels’ share of overall energy use is expected to drop from 84 percent in 2008 to 78 percent in 2035.

According to the report, rising oil prices and government incentives will drive the growth of biofuels, which will account for all the growth in liquid fuel consumption, while use of petroleum-based liquids will remain flat.

"The role played by petroleum-based liquids could be further challenged if electric or natural-gas-fueled vehicles begin to enter the market in significant numbers," the EIA said.

In the shorter term, the EIA raised its predictions for diesel and oil prices on more optimistic economic growth forecasts.

In its Short-Term Energy Outlook, the agency said it expects diesel retail prices to average $3.05 a gallon in 2010, and $3.20 in 2011, up from the previous forecasts of $2.95 and $3.12 per gallon, respectively.

Diesel prices have been on the rise for the last six weeks, increasing by 18.8 cents a gallon. 


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