Biomass in the United States Energy Economy - EIA

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Biomass in the United States Energy Economy

International Biomass Conference and Expo Dr. Richard Newell, Administrator May 03, 2011 | St. Louis, Missouri

U.S. Energy Information Administration

Independent Statistics & Analysis

www.eia.gov

Overview •







Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

The potential for biomass and biofuels –

Potential biomass supply chain



Biofuel corporate landscape



US biomass consumption by sector and type

Electricity sector –

Reference case power generation projections



Alternative cases

Liquid fuels sector –

Current state of industry



Reference case biofuel projections



Effects of fuel efficiency



Sensitivity on E15 penetration

EIA data available to the public –

Ethanol



Biodiesel & renewable diesel



Biomass for electricity

2

There are many sources and many uses for biomass Raw inputs

Feedstocks

Energy products

• • • • • • •

• • • • •

• • • • • • •

Corn Soy Other seed crops Livestock Forestry Energy crops Municipal solid waste

http://www.ranchomastatal.com/img_bank/phpgbb3eY_IMG_0182.JPG

Virgin oils Starch Fiber Fat & grease Lignocellulose

http://www.alabamapower.com/renewableenergy/biomass.asp

Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

FAME biodiesel Renewable diesel Ethanol Butanol Gasoline Diesel Heat & power

http://www.e85fuel.com/images/sized/images/uploads/blender_pump_prices700x231.jpg

3

Corporate landscape for 1st generation biofuels • Alcohol production – Vertically integrated majors: Archer Daniels Midland

– Large refiners: Poet Ethanol (throughout U.S.), Valero Refining (throughout U.S.), Green Plains Renewable Energy (Midwest), Flint Hills Resources, LLC (IA), Abengoa (KS, IL, NM, NE, IN) – Medium/small refiners: Big River (East IA, West IL), The Andersons (West OH, IN, South MI), White Energy (TX, KS), Aventine (Central IL, NE), Biofuel Energy (MN, NE)

Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

• Diesel blendstocks – Vertically integrated majors: Archer Daniels Midland – Large refiners: Renewable Energy Group, Renewable Biofuels, Imperium Renewables, Biodiesel of Las Vegas, Green Earth Fuels of Houston, Louis Dreyfus, Delta Biofuels, Inc – Medium/small refiners: Keystone BioFuels, Inc., Fina, LLC, AGP, American Energy Producers, Inc., Owensboro Grain, Lake Erie Biofuels, Delta American Fuel, LLC, Innovation Fuels

4

Next generation biofuel companies are developing numerous strategic relationships Technology Company Codexis Iogen Technology Legend 2nd generation alcohols

Virent

Products and co-products

Royal Dutch Shell

BP

Vercipia Butamax

2nd generation non-alcohol liquids

Danisco

Genetics companies

Solazyme

3rd generation biofuel producers

Partner

Zeachem

Du Pont Biofuels

Chevron

• Gasoline • Diesel • Ethanol • Butanol • Biodiesel • Lubricants

Valero

Mascoma Terrabon

Dow Chemical

Solix Algenol LS9 Amyris Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

Proctor & Gamble Chemicals

Tate & Lyle

• Polymers • Consumer products • Nutraceuticals

5

EIA projects that consumption of biomass for liquid fuels and power will increase significantly, driven primarily by cellulosic biofuels US biomass supply quadrillion Btu per year 10

8

Cellulosic biofuels + electric power

6

4

Grains, fats, & oils

2 Industrial CHP (primarily pulp & paper) 0 2010

2015

2020

2025

2030

2035

Source: EIA, Annual Energy Outlook 2011 Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

6

Despite this rapid growth, under current policies, fossil fuels still provide 78% of U.S. energy use in 2035 U.S. primary energy consumption quadrillion Btu per year

Shares of total U.S. energy

History

2009

Projections

120 100

7%

80

21%

60

25%

40

1%

20 0 1980

1985

1990

1995

2000

10%

Renewables (excluding liquid biofuels)

21%

Coal 24%

Natural gas Liquid biofuels

37%

Oil and other liquid fuels

9%

Nuclear

2005

2010

2015

2020

2025

3%

33%

8% 2030

2035

Source: EIA, Annual Energy Outlook 2011 Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

7

Policy and crude oil prices have worked in favor of biofuels US biofuels consumption million barrels per day 3.0

2.5 AEO2011 AEO2007

2.0

1.5

1.0

0.5

0.0 2010

2015

2020

2025

2030

2035

Source: EIA, Annual Energy Outlook 2007 and 2011 Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

8

The future market for biofuels depends on the world oil price path, which is highly uncertain annual average price of low sulfur crude oil real 2009 dollars per barrel 2009

History

Projections

225 High Oil Price

200 175 150 125

AEO2011 Reference

100 75 50

Low Oil Price

25 0 1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

Source: EIA, Annual Energy Outlook 2011 Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

9

In EIA projections, cellulosic biomass of three different types is consumed in liquid fuels and for power production cellulosic biomass consumption quadrillion Btu per year 2.5

2.0

Energy crops/ag residues Forestry residues Urban wood waste

1.5

1.0

0.5

0.0 2010

2015

2020

2025

2030

2035

Source: EIA, Annual Energy Outlook 2011 Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

10

Liquid fuels markets and electric power compete for the same biomass supply in EIA projections 2008 $ per dry ton

• Behind the projection, EIA has a large biomass potential supply over a range of prices

100

80

• As crop yields and other farm management practices improve, biomass available in a given year increases

60 2012

40

• But the liquid fuel sector does not have access to urban/mill residues and forestry residues from Federal lands, which limits some of the growth

2020 2030

20

0 0

200

400

600

800

Million Dry Tons per Year

Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

11

Electricity

Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

12

Natural gas, wind and other renewables account for the vast majority of capacity additions from 2009 to 2035 2009 capacity Nuclear 101 (10%)

Capacity additions 2009 to 2035

Coal 313 (30%)

Hydropower* 3 (1%)

Hydropower* 99 (10%)

Other renewables 28 (12%)

Other renewables 15 (1%) Wind 32 (3%)

Nuclear 6 (3%)

Wind 25 (11%) 1,033 gigawatts

End-use coal 4 (0.3%) Natural gas 351 (34%)

Other fossil 118 (11%)

Coal 14 (6%) End-use coal 12 (5%)

223 gigawatts

Other fossil 1 (0.4%)

Natural gas 135 (60%)

* Includes pumped storage

Source: EIA, Annual Energy Outlook 2011 Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

13

Non-hydro renewable sources grow nearly three-fold, meeting 22% of projected electricity generation growth non-hydropower renewable generation billion kilowatthours per year History

450

Projections

2009

400

350

Advanced biofuels cogeneration

300

Power sector

Biomass

250

Industrial CHP

200

Wind

150

Geothermal

100

Solar

50

0 1990

Waste 1995

2000

2005

2010

2015

2020

2025

2030

2035

Source: EIA, Annual Energy Outlook 2011 Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

14

In the Reference Case, power generation from biomass sources is limited in the electricity sector; main growth in co-generation biomass power generation billion kilowatt hours per year 175 150

125 End Use cogeneration

100 75 50 25 0 2010

Cofiring in coal power plants Dedicated biomass power plants 2015

2020

2025

2030

2035

Source: EIA, Annual Energy Outlook 2011 Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

15

When renewable tax credits are extended indefinitely, wind and solar capture market share at the expense of biomass and geothermal total electricity generation billion kilowatt hours per year 900

800 700 600

Hydro & other Wind Solar Biomass Geothermal

500 400 300 200 100 0 Current 2010

Reference 2035

No Sunset 2035

Source: EIA, Annual Energy Outlook 2011 Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

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Liquid fuels

Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

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The liquid fuels industry landscape has changed rapidly in recent history due to the economy, biofuels, fuel economy, and oil prices U.S. motor gasoline consumption million barrels per day 8.8 Ethanol

Petroleum Gasoline

8.4

• Makes them one of the most straightforward substitutes for petroleum

8

7.6

7.2

• But the path has been and remains challenging

6.8

6.4 2000

• Liquid biofuels provide blendable fuels for transportation

2005

Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

2010 18

The import share of liquids consumption drops over the projection due in part to increased fuel efficiency and biofuel production U.S. liquid fuels consumption million barrels per day

25

History

2009 4%

20

Projections Biofuels including imports 11%

10% Natural gas plant liquids

15

34%

Liquids from coal Petroleum supply

13% 3% 32%

10 52% 5

Net petroleum imports

41%

0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 Source: EIA, Annual Energy Outlook 2011 Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

19

Domestic biofuels production grows rapidly, displacing 1.25 million barrels per day of gasoline and 360,000 barrels per day of diesel by 2035 U.S. biofuels production million barrels per day

2.5

2.0

1.5

1.0 Starch ethanol (mostly corn)

0.5

0.0 2010

2015

2020

2025

2030

2035

Source: EIA, Annual Energy Outlook 2011 Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

20

New light duty vehicle fuel economy achieves almost 38 mpg by 2035 in the Reference case, slowing the growth of fuel demand miles per gallon History 45

Projections

2009

40 35

30 Summary of standards

25 20

2012-2016:

15

2020:

10

2017-2025:

34.1 mpg CAFE average (based on NHTSA vehicle footprint sales distribution) 35 mpg by statute Reference case does not include proposal planned for September 2011

5 0 2000

2005

2010

2015

2020

2025

2030

2035

Source: EIA, Annual Energy Outlook 2011 Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

21

FFVs make up the largest share of unconventional vehicles, which account for 40% of U.S. light-duty vehicle sales in 2035 U.S. light car and truck sales millions

20

15 Conventional gasoline Diesel Gaseous and fuel cell

10

Mild hybrid electric Hybrid electric Plug-in hybrid and all-electric

5

E85 flex fuel

0 2000

2009

2015

2020

2025

2030

2035

Source: EIA, Annual Energy Outlook 2011 Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

22

E85 infrastructure needs for meeting the RFS depend on the penetration of E15 into the marketplace Ethanol blending into E85 1000s of stations 45

40

Slow E15 Penetration

Reference Case

Fast E15 Penetration

35 30 25 20 15 10 5 0 2017

2022

2035

Source: EIA, Annual Energy Outlook 2011 Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

23

Summary and view to the future • Policy changes and higher oil prices are moving the United States to more use of biofuels • Uncertainties still lie ahead – Land use – Infrastructure changes – Technology development – Political and market uncertainties

Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

24

For more information U.S. Energy Information Administration home page | www.eia.gov Short-Term Energy Outlook | www.eia.gov/steo

Annual Energy Outlook | www.eia.gov/aeo International Energy Outlook | www.eia.gov/ieo

Monthly Energy Review | www.eia.gov/mer

EIA Information Center (202) 586-8800 | email: [email protected]

Richard Newell, Biomass Conference St. Louis, MO May 3, 2011

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Biomass in the United States Energy Economy - EIA

Biomass in the United States Energy Economy International Biomass Conference and Expo Dr. Richard Newell, Administrator May 03, 2011 | St. Louis, Mis...

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