U.S. to rely less on oil for energy by 2035

WASHINGTON (Reuters) - U.S. oil demand through 2035 is not expected to return to the peak levels reached before fuel consumption fell sharply due to high petroleum prices and the recession, the government's top energy forecasting agency said on Monday.

U.S. oil demand reached a high of 20.8 million barrels per day in 2005, and oil consumption is forecast to remain "near" its current level of about 19 million bpd through 2035, the Energy Information Administration said.

"We do not think it will go back to what previous levels have been," EIA Administrator Richard Newell said at a briefing on the agency's new long-term energy forecast.

Globally, crude oil demand is expected to grow 1 percent a year over the period to 111.7 million bpd from this year's level of 84.5 million bpd, the agency said.

U.S. energy consumption is expected to increase 14 percent by 2035, but the nation will rely less on oil and other fossil fuels, according to the EIA.

The fossil fuel share of U.S. energy demand over the next quarter century is expected to fall from the current 84 percent to 78 percent, the EIA said.

Ethanol is forecast to account for 17 percent of U.S. gasoline consumption by 2035, the agency said.

U.S. crude oil production is expected to rise from about 5 million barrels per day to more than 6 million bpd by 2027, due to additional offshore output and enhanced onshore oil recovery techniques, and remain at that level through 2035.

Higher oil production and nearly flat petroleum demand will help cut U.S. fuel imports to just 45 percent of demand in 2035 compared with about 65 percent now.

The price of crude oil is forecast to rise to about $133 a barrel, in 2008 dollars, by 2035.

The United States will rely more on solar, wind and other renewable energy sources to meet its energy needs, the EIA said.

"Our projections show that existing policies that stress energy efficiency and alternative fuels, together with higher energy prices, curb energy consumption growth and shift the energy mix toward renewable fuels," Newell said.

The EIA noted its forecast assumed no change in current climate change policies and regulations.

However, the United States is expected to eventually adopt policies that would reduce its greenhouse gas emissions, which should increase demand for alternative energy sources even more.

(Editing by Walter Bagley)

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