Energy Agency: Oil Demand Slowing

U.S. oil consumption is expected to level off with virtually no growth between now and 2030 due to increases in energy efficiency and a rebound in oil prices, the government said.

WASHINGTON (AP) -- U.S. oil consumption is expected to level off with virtually no growth between now and 2030 because of increases in energy efficiency, greater use of renewable fuels and an expected rebound in oil prices, the government said Wednesday.

The Energy Information Administration said overall energy use will continue to increase but at a slower rate than predicted only a year ago.

The agency projected a 3 percent annual increase of renewable energy use, including solar, wind and biofuels such as ethanol.

As a result, U.S. dependence on foreign oil is expected to decline sharply, the EIA report predicted, with liquid fuel imports -- primarily oil -- accounting for only 40 percent of U.S. consumption by 2025, compared with 58 percent last year.

Cars that use less gasoline will further reduce oil demand, the agency said. The EIA analysts expect gas-electric hybrid cars to account for 38 percent of the market by 2030, compared with 2 percent last year.

Although oil prices have dropped below $50 a barrel from a high last July of $147 a barrel, the EIA predicts global crude oil costs will again rebound after the current economic problems subside. By 2030, nominal oil prices are expected to be $189 a barrel, equal to $130 in 2007 dollars, said the report.

The agency's forecast assumes no changes in current laws or regulations, including any mandatory limits on carbon dioxide emissions, in response to climate change. But the agency said its projections assume some additional costs to build cleaner power plants that rely on carbon-intensive fuels and technologies.

If no limits are set on greenhouse gases, the EIA report said U.S. carbon dioxide emissions will continue to rise at an average of 0.3 percent a year, compared with an annual average increase of 1.1 percent since 1990.

President-elect Barack Obama reiterated Monday, as he announced members of his energy and environmental team, that he will push hard to shift the country away from fossil fuels and set limits on greenhouse gas emissions. Such actions could accelerate the reduction of fossil fuel use more than the EIA report anticipates.

Without limits on carbon emissions, the EIA projected that by 2030 the country would continue to rely heavily on fossil fuels, with coal, oil and natural gas accounting for 79 percent of energy use, compared with 85 percent today.

While total electricity use will increase, more of it will be produced from burning natural gas and from renewable sources such as wind, solar and geothermal energy, the report said. Coal will continue to provide 45 percent of electricity generation, a drop from about 50 percent today.

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