EIA’s recently released preview of its Annual Energy Outlook 2011 showcases an updated reference scenario for US energy production and consumption through 2035.  The predictions highlight the complex relationship between the goals of energy independence and renewable deployment. Petroleum and natural gas are now predicted to contribute slightly more to domestic energy production, largely due to updated assumptions about greater availability of domestic shale gas and oil which will coincide with lower prices.

While this is good news for US energy independence, meaning lower reliance on energy imports, it is bad news for renewable energy deployment.  The EIA reduced the outlook for the renewable energy contribution (not including biomass or hydropower) to total energy production for both 2025 and 2035. “Other” renewable energy, including solar, wind, and geothermal, decreased from 4% to 3% of total energy production from the 2010 to the 2011 reports. Biomass and hydropower have slightly increased contributions.

Renewable energy production is still projected to grow by 2.9% per year to eventually have a 14% share by 2035, in part a result of the renewable fuel standards for transport fuels and state-level renewable portfolio standards. Unfortunately this business as usual growth rate is insufficient to counteract the influence of predicted lower petroleum and natural gas prices.

As a result of low levels of ambition in renewable energy deployment and increasing use of fossil fuels, US GHG emissions are predicted to rise by 6% between 2005 and 2035. In order for the US to meet any sort of medium term emissions reduction target, additional legislation will therefore be necessary. Any policy mechanism would have to seek to address the business as usual trend of low renewable energy penetration.

President Obama has indicated his determination to pass federal legislation that would reduce US dependence on fossil fuels in 2011.  What that legislation would look like, when the Republican House is considered, is still a guess. Setting a federal renewable energy target, similar to the EU’s goal 20% renewable energy consumption by 2020, would be a great first step towards ensuring that the future outlined in the AEO 2011 preview does not come to pass. Yet, RES proposals with a chance to pass both houses, such the Bingaman and Brownback bill introduced in September, call for only a 15% reduction by 2021 with 4% coming from efficiency.  Both Republicans and Democrats will have to look for middle ground in order to enact legislation which can assist in the deployment of these crucial technologies, while also creating jobs in America.

The full report, to be release in March, will likely account for a variety of alternate policy scenarios. But a 5% rise in GHG emissions into 2035 is an unacceptable outcome, both environmentally and politically. The US must act through new policy, to fulfill its international obligations under the UNFCCC and its domestic obligations to a robust renewable energy industry.

__

Emily McGlynn is a Policy Fellow with Americans for Energy Leadership.