The analysis looks at a reference case, which assumes current laws and regulations remained unchanged throughout the projections. The EIA also looks at 38 sensitivity cases, which explore potential changes in policies, markets and technologies that could affect the U.S. energy economy.
"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 in the U.S., while use of petroleum-based liquids will remain flat. The report found that consumption of liquid fuels, including fossil fuel and biofuels, will rise from about 20 million barrels per day in 2008 to 22 million barrels a day in 2035.
"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. "Rising oil prices, together with growing concerns about climate change and energy security, are leading to increased interest in alternative-fuel vehicles (AFVs), but both electric and natural gas vehicles face significant challenges."
While the EIA projects carbon dioxide emissions to increase over the next 25 years, it will be slower compared to population growth. In the reference case, CO2 emissions grow on average by 0.3 percent per year, or a total of 9 percent. Meanwhile, the population should grow an average of 0.9 percent per year. Emissions per capita are expected to fall by 0.6 percent per year.
To view the entire report, visit www.eia.gov/oiaf/aeo/index.html.