In the AEO2008 reference case, real (2006 dollars) world crude oil prices decline gradually from current levels to $58 per barrel in 2016, as expanded investment brings new supplies to the world market. After 2016, real prices rise as higher cost supplies are brought to market. In 2030, the average real price of crude oil is $72 per barrel in 2006 dollars.

As result of higher energy prices and slower US economic growth (gross domestic product grows at 2.6% per year between 2006 and 2030 in AEO2008 compared to 2.9% per year in AEO2007), total primary energy consumption in the AEO2008 reference case grows more slowly then in previous AEOs, increasing at an average rate of 0.9% per year, from 100.0 quadrillion Btu in 2006 to 123.8 quadrillion Btu in 2030—7.4 quadrillion Btu less than in the AEO2007 reference case.

Delivered energy consumption in the transportation sector grows to 36.6 quadrillion Btu in 2030 in the AEO2008 reference case, 2.7 quadrillion Btu lower than in AEO2007. The lower projected level of consumption predominantly reflects the influence of slower economic growth, but it also reflects higher fuel prices.

Travel demand for light-duty vehicles is a significant determinant of total transportation energy demand, and over the past 20 years it has grown at an average rate of 2.6% per year. In the AEO2008 reference case, travel demand is projected to grow by 1.6% per year through 2030. The slower rate of growth reflects both demographic factors (for example, a slowdown in growth in labor force participation by women) and higher energy prices.

The projected average fuel economy of new light-duty vehicles in the AEO2008 reference case does not reflect the revisions to CAFE standards that now appear likely to be enacted into law. The new CAFE regulations will specify an average new fleet fuel economy of 35 mpg by 2020. The current AEO2008 reference case assumes average new fleet fuel economy of 30 mpg in 2030, reflecting the effect of the increased sale of flex-fuel, hybrid, and diesel vehicles and a slowdown in the sales of new light trucks.

The AEO2008 reference case projects greater renewable energy use than AEO2007. Marketed renewable energy consumption between 2006 and 2030 grows from 6.8 to 12.2 quadrillion Btu, compared with 9.9 quads in the AEO2007 reference case. The higher level of renewable energy consumption is partially a result of higher energy prices in the AEO2008 reference case, but it also reflects a revised representation of State renewable portfolio standards. The updated representation of these programs results in significant additional growth of renewable generation from wind, biomass, and geothermal resources.

Without changes in current carbon emissions policies that are not assumed in the AEO2008 reference case, carbon dioxide (CO2) emissions grow sharply, but to lower levels than in AEO2007 because of lower primary energy consumption. Energy-related CO₂ emissions are projected to grow by 25% in the AEO2008 between 2006 and 2030, compared to 35% in the AEO2007 reference case.

Other highlights of the AEO2008 reference case projections include:

• US crude oil production increases from 5.1 in 2006 to a peak of 6.4 million barrels per day in 2019, as a result of increased production from the deep waters of the Gulf of Mexico and onshore enhanced oil recovery projects. Domestic production subsequently declines to 5.6 million barrels per day by 2030, as increased production from new smaller discoveries are inadequate to offset the declines in large fields in Alaska and the Gulf of Mexico.

• Between 2006 and 2010, the net import share of total liquids supplied drops from 60% to 55%; it stays relatively stable through 2020 before increasing to 59% in 2030.

• Total domestic natural gas production increases from 18.6 to 20.2 trillion cubic feet (tcf) between 2006 and 2021, before declining to 19.9 tcf in 2030. Lower 48 offshore natural gas production grows from 3.0 tcf in 2006 to a peak of 4.5 tcf in 2019 as new resources come online in the Gulf of Mexico. After 2019, lower 48 offshore production declines to 3.5 tcf feet in 2030.

• The Alaska natural gas pipeline is completed in 2020. After the pipeline begins operation, total Alaskan natural gas production increases from 0.4 tcf in 2006 to 2.0 tcf in 2021 and then to 2.4 tcf in 2030 as the result of a subsequent expansion.

• Ethanol consumption grows from 5.6 billion gallons in 2006 to 13.5 billion gallons in 2012, far exceeding the required 7.5 billion gallons in 2012 in the Renewable Fuel Standard enacted as part of the Energy Policy Act of 2005. It grows to 17 billion gallons in 2030. Almost all of the ethanol is used in gasoline blending.

• Total electricity consumption, including both purchases from electric power producers and on-site generation, grows from 3,821 billion kWh (kWh) in 2006 to 5,149 billion kWh in 2030, increasing at an average annual rate of 1.3 percent in the AEO2008 reference case.

• The natural gas share of electricity generation (including generation in the end-use sectors) remains between 20% and 21% through 2018, before falling to 14% in 2030. The coal share declines slightly, from 49% in 2006 to 48% in 2017, before increasing to 55% in 2030.

• Nuclear generating capacity increases from 100.2 gigawatts (GW) in 2006 to 118.8 GW in 2030. The increase includes 20 GW of capacity at newly built nuclear power plants and 2.7 GW expected from uprates of existing plants, partially offset by 4.5 GW of retirements.

The EIA will release the full publication of the long-term projections of energy supply, demand, and prices through 2030, including complete documentation and over 30 additional cases examining energy markets, in early 2008.

Resources

• Annual Energy Outlook 2008 (Early Release)