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EIA Forecasts Significant Shortfall in Cellulosic Biofuel Production Compared to Target Set by Renewable Fuel Standard

Under the EIA AEO2008 forecast, a shortfall in cellulosic ethanol production will trigger an adjustment of the RFS target. Click to enlarge.

The US Energy Information Administration (EIA) is forecasting a significant shortfall in the production of cellulosic biofuels required to meet the targets of the Renewable Fuel Standard established in the Energy Independence and Security Act of 2007 (EISA2007).

In testimony before the US Senate Committee on Energy and Natural Resources today, EIA Administrator Guy Caruso provided a summary of the agency’s Annual Energy Outlook 2008 (AEO2008) forecast, revised to factor in the different provisions of EISA2007, including the new RFS target of 36 billion gallons by 2022 and new CAFE requirements.

While the situation is very uncertain, the current state of the industry and our present view of projected rates of technology development and market penetration of cellulosic biofuel technologies suggest that available quantities of cellulosic biofuels prior to 2022 will be insufficient to meet the new RFS targets for cellulosic biofuels, triggering both waivers and a modification of applicable volumes as provided for by paragraphs 7(D) and 7(F), respectively, of Section 211(o) of the Clean Air Act as amended by EISA2007.

The modification of volumes reduces the overall target in 2022 from 36 billion gallons to 32.5 billion gallons. The modified cellulosic biofuel requirement is projected to be met by a combination of domestic cellulosic ethanol, imported cellulosic ethanol, and biomass-to-liquids diesel, but the specific mix is again highly uncertain.

—Guy Caruso

Overall, the EIA sees ethanol use grows from 5.6 billion gallons in 2006 to 24.3 billion gallons in 2030 (more than 16% of total gasoline consumption by volume).

Ethanol use for gasoline blending grows to 13.3 billion gallons and E85 consumption to 11.0 billion gallons in 2030. The ethanol supply is expected to be produced from both corn and cellulosic feedstocks, with corn accounting for 15.0 billion gallons of ethanol production in 2030. The AEO2008 reference case also expects strong growth in ethanol imports after 2010, reflecting the pending expiration of the tariff on imported ethanol in January 2009.

—Guy Caruso
Transportation dominates liquid fuel use. Click to enlarge.

The forecast puts biodiesel use at 1.3 billion gallons in 2030 (about 1.6% of total diesel consumption by volume), but the consumption of diesel liquids produced from biomass (BTL) at to 4.2 billion gallons in 2030, 4.9% of total diesel consumption by volume.

Other transportation-related highlights in the Administrator’s summary of the revised AEO2008 forecast include:

  • The total consumption of liquid fuels will grow at an average annual rate of 0.4% in the AEO2008 reference case, from 20.7 million barrels per day in 2006 to 22.8 million barrels per day in 2030 led by growth in transportation uses, which account for 68% of total liquid fuels demand in 2006, increasing to 73% in 203O. Improvements in the efficiency of vehicles, planes, and ships are more than offset by growth in travel.

  • Based on the new CAFE regulations, the average in-use fuel economy for the stock of light-duty vehicles in 2030 increases to 28.0 mpg, 38% above its 2006 level.

  • US crude oil production grows from 5.1 million barrels per day in 2006 to a peak of 6.3 million barrels per day in 2018, primarily due to increased production from the deep waters of the Gulf of Mexico and from the expansion of enhanced oil recovery operations in onshore areas supported by higher crude oil prices. Domestic production subsequently declines to 5.6 million barrels per day in 2030, as increased production from new smaller discoveries is inadequate to offset the declines in large fields in Alaska and the Gulf of Mexico.

  • Total domestic liquids supply, including crude oil, natural gas plant liquids, refinery processing gains, and other refinery inputs (e.g., ethanol, biodiesel, BTL, and liquids from coal) grows from 8.3 million barrels per day in 2006 to 10.5 million barrels per day in 2030.

  • The EIA forecasts as its base case real world crude oil prices (defined as the price of light, low-sulfur crude oil delivered in Cushing, Oklahoma, in 2006 dollars) decline gradually from current levels to $57 per barrel in 2016 ($68 per barrel in nominal dollars), as expanded investment in exploration and development brings new supplies to the world market. After 2016, real prices begin to rise, as demand continues to grow and higher cost supplies are brought to market. In 2030, the average real price of crude oil is $70 per barrel in 2006 dollars, or about $113 per barrel in nominal dollars.

A complete copy of the revised tables for the reference case will be posted on the web site on 5 March 2008. A revised version of the Overview to the AEO2008 will be posted in the next few weeks.



Billy K

We see from the report how futile government funding for cellulosic ethanol really is. "By 2030 15 billion gallons of corn ethanol" means only 38% of the ethanol by 2030 will use cellulose feedstocks. That is a drop in bucket!

A better use of the money would be in conservation. I'm sure we could reduce fuel use by at least 10% with the proper incentives. Thats better than producing an equivalent of 6% of transportation fuels from cellulose by 2030.

How about putting more money in mass transit and fixing this countries infrastructure? If we put some massive money into it we can reduce our gasoline use and save the depressed economy. Sounds better to me than giving it to Scientists to blow on their hobbies.


The way the previous ethanol percentage by year was set up, if the state could not make the targets for they year, they had to make it up the next year. It is one thing to set goals, but they should be meaningful and attainable goals and not just made up objectives.

The idea seems to be that the private sector will invest a lot to make cellulose ethanol and everything will be fine. The corn ethanol plants are now in a bind over high corn prices, they may not be in the mood for any more big investments anytime soon.


Changeover will depend on price, not upon mood.

When and if celluosic ethanol gets a cost advantage over corn ethanol then corn ethanol plants will have no choice.

There might be some attempts to block celluose politically. That won't work unless the methods can be shown unsafe.

Bio-oils are steadily looking better to me. Celluosic ethanol seems to never quite exist.

Maybe I am just gloomy; doing my income taxes today.


Private sector mood can be made up of economics, finance, risk, opportunity, the perception of opportunity, future projections and many other factors. The idea is that now that they are heavily invested in corn ethanol and find problems, they could be less likely to invest much more in the near future on other projects.


These estimates are based on a fantasy that peak oil is not going to happen even up to 2030. All the accelerated exploration so far has not found anywhere near enough oil to match ever increasing demand.


Latest estimates are for a very tight oil market about 2015. At that time, the world will have to produce more than 100 million barrels per day to meet demand and that will be very difficult to do.

Rafael Seidl

Perhaps EIA is not casting a wide enough net if it counts only liquid biofuels toward the total. The twin political objectives of reduced dependence on imported oil and reduced net CO2 emissions can be met more easily by delivering a fraction of total miles covered with vehicles running in part on renewable electricity or biomethane - not to mention reducing the number of miles in the first place.

There's not enough out of the box thinking here.


What a coincidence: this testimony comes at a time when the Oak Ridge National Lab releases its report about the benefits and potential of biofuel imports from Latin America.

March 04, 2008 : ORNL report: imports from Latin America may help US meet energy goals - 30 to 85 billion gallons available for export by 2017

Perfect timing...?

John Taylor

Hmmm ... so the EIA finally noticed that there was no inexhaustible supply of corn, and that they can't rely on technology that does not exist.

Of course we don't see any proposed alternatives yet.

Harvey D

Billy K

I agree with you.

Conservation, specially with widespread use of lower consumption Hybrids-PHEVs and BEVs will be required to keep present and future vehicle fleet on the roads.

Another study revealed that USA can only produce biofuel at the rate of about 8.0 million barrell/day (max) and still produce enough food for some 330 million people. The impact on (all) food prices will be significant.

By 2030, those 8.0 million barrel/day would not even represent 50% of the forecasted liquid fuels required.

Liquid fuels will become rare and very expensive unless we reduce consumption by at least 50% by 2030.

Fortunately, it can be easily done in most cases while reducing GHG. Electrification of many/most transportation vehicles (ground-water-air) could do even better.


Why do people think cellulosic biofuel competes with food production? It made from agriculture waste, forestry waste, perennial grasses on perennial grass land, carboard, paper, etc... do people eat those things? There a big difference between 1st generation biofuels (limited environmental sustainability, limited production) and 2nd generation biofuels (very low, neutral or negative CO2, potential to replace large percentage or even the whole oil market). The problem is price can the price of making 2nd generation biofuels be made competive with oil, we will just have to see how low technology can being the price down on 2nd Gen. and how high geology and the market can bring Oil prices up.


They want to persist with that because they want to. They will tell you it will ruin that land, use all the water resources and any phony excuse they can think of. They are doomers and no matter what you do you are harming something or someone....shame on you for not caring is what they are trying to say. THEY are the only ones that truly care.


This forecast is insanity. Oil prices will not decline to a nominal $57/bbl absent a world-wide depression. The expansion in US oil production is contrary to the last 37 years of experience (driven by geology), and growth in motor fuel consumption is already reversing.

If 24.3 billion gallons equals 16% of projected motor fuel consumption, it means total consumption would be in excess of 150 billion gal/yr. This may be very optimistic, but it is definitely the wrong approach; aiming for a fleet of nearly 100% PHEVs would allow fuel consumption to contract by as much as 80%, of which ethanol could easily be half.


That sounds like a better way. A representative in Congress from Maryland gives speeches on the floor of the House about oil and said that the U.S. has more wells in the ground than the whole rest of the world combined.

We peaked in the early 70s and even ANWR can not give us more than a few percent of what we use. You could drill off the California and Florida coasts and still only get a few percent.

It is time to make some MAJOR moves now. As if the oil shocks of the 70s were not enough of a wake up call, the quadrupling of oil prices should be a seismic shock of such a magnitude that we can not ignore it any longer.

We are in for some tough sledding in the years to come and we will need everything we have working together to get through this, or we can kiss what we know as a modern society goodbye.

Harvey D

1) Nobody can convince or force Americans to drive much less. Historically, Americans drive more and more every year just to go to work every day, vacation, visits, kill time etc.

2) USA does not have enough land to produce the feedstock and/or wastes required to produce more than 50% of the liquid fuel required for transportation by 2030.

3) Major reduction in fuel consumption (up to 75% and more) through massive use of PHEVs and BEVs seems to be the best all around solution.

4) It would be far more beneficial if some of the resources being used to produce oil, corn and cellulosic ethanol etc were redirected towards the production of better/cheaper batteries, PHEVs and BEVs.

5) Increased electrical energy production would follow automatically with increased demand. This is a well established mature technology and no subsidies are required.

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