Tuesday, September 8, 2009

Biofuels forecast to account for 46,1% of ‘unconventional fuel’ growth in next 20-odd years

By: Leandi Cameron, 28th August 2009

The world’s liquid fuel supply will grow 22% from 86,2-million barrels per day (mbpd) in 2007 to 105,4 mbpd in 2030, according to projections by the US’s Energy Information Administration (EIA), published in the 2009 ‘Annual Energy Outlook’.

The EIA further projects that 42% of liquid fuel growth will be met with unconventional fuels, and that the remainder will constitute conventional sources.

Unconventional fuel sources include tar sands, extra-heavy crude, biofuels, coal-to- liquids, gas-to-liquids, oil shale and ‘other’ fuels.

Biofuels are projected to account for 46,1% of the unconventional fuel growth. However, if biofuels were not included in future fuel growth, unconventional sources such as bitumen (tar sands) would account for 55,5% of supply growth; extra-heavy crude, 10,7%; coal-to-liquids, 24,2%; gas-to-liquids, 5,6%; oil shale, 3,3%; and others would account for 0,7% of the fuel growth, according to projections made by the EIA.

“We used EIA’s global liquid fuel supply projections rather than US-only projections to account for the global nature of the liquid fuel supply and to address the issue of leakage, for example, the use of lower-carbon fuels in the US may serve only to ‘shuffle’ higher- carbon fuels and related emissions elsewhere in the global fuels market. However, it should be noted that the US liquid fuel mix in the future could be more carbon intensive than the global mix, owing to heavy reliance on oil imports, abundant domestic coal supplies and the proximity to Canadian tar sands,” reports the RFA.

In a worst-case scenario, if biofuels are left out of future unconventional fuel growth, the projected growth will be filled with marginal sources, with 58% being conventional and 42% being unconventional sources. In the best case, it is assumed that the void will be filled by the EIA’s overall projected growth mix of 69,6% conventional sources and the rest by unconventional sources.

“Fossil-based unconventional fuel sources, such as oil shale, coal-to-liquids, extra-heavy tar sands and gas-to-liquids, emit signifi- cantly more life-cycle greenhouse-gas (GHG) emissions than both biofuels and conventional fossil fuel sources. “Thus, an effect of replacing these marginal liquid fuel sources with biofuels is that signi- ficant future GHG emissions are avoided that would have otherwise occurred,” says the RFA.

The association adds that, based on the analysis, it can be argued that the use of biofuels between 2007 and 2030 will lead to the additional avoidance of 7,7 to 22 g CO2e for energy megajoule of new biofuels used above baseline petrol levels.

“The case could be made that without bio- fuels, fossil-based unconventional sources will account for a much larger share of future liquid fuel supply growth than analysed, and conventional sources will make up a much lower share. In fact, under the EIA’s 2009 Annual Energy Outlook ‘high price’ case, unconventional liquid fuel sources contribute 60% more volume to 2030 total supply than in the reference case. “Obviously, the avoided GHG emissions resulting from increased biofuels use under the ‘high price’ case will be significantly greater than in the scenarios discussed in our analyses,” concludes the RFA.