EIA: US Oil Production at 20-Year High, Cellulosic Biofuels Begin to Flow

The US Energy Information Administration says US monthly oil production has topped 7 million barrels per day (bpd) for the first time in 20 years, and the EIA also this week said cellulosic biomass output was growing, albeit not as fast as hoped.

EIA’s new Petroleum Supply Monthly report revised up crude oil production for November 2012 from 6.893 million bpd to 7.013 million bpd, marking the first time any US monthly oil output was above 7 million bpd since December 1992. Crude oil production for December 2012 was even higher at 7.030 million bpd. For all of 2012, US yearly oil production averaged 6.474 million bpd, the highest yearly output level since 1995, according to the report.

In other news, the EIA says several companies combined to produce about 20,000 gallons of fuels using cellulosic biomass (e.g., wood waste, sugarcane bagasse) from commercial-scale facilities in late 2012. EIA estimates this output could grow to more than 5 million gallons in 2013, as operations ramp up at several plants. Additionally, several more plants with proposed aggregate nameplate capacity of around 250 million gallons could begin production by 2015 (see map).

Although cellulosic biofuels volumes are expected to grow significantly relative to current levels, they will likely remain well below the targets envisioned in the Energy Independence and Security Act of 2007. That law set a target level of 500 million gallons of cellulosic biofuels for 2012 and 1 billion gallons for 2013, growing to 16 billion gallons by 2022.

The projects identified on the map were designed to produce ethanol or drop-in biofuels (i.e., fuels that are direct replacements for petroleum-based gasoline or distillate fuels) as well as steam. Using technology known as combined heat and power, this steam can both be consumed internally as a process-heat source and used to generate power. The power can also be used internally to operate pumps and other electrical equipment or sold to the electrical grid, giving these projects the potential to consume no fossil fuels.

Despite the growth potential over the next several years, the path to commercial biofuels has not been smooth. A number of biofuels projects, including one from BP Biofuels in Highlands County, Fla., have been canceled before starting major construction. In addition, many projects have experienced delays in their commercialization attempts. Several reasons underpin slow growth in the commercialization of biofuels:

  • Difficulties obtaining financing in the aftermath of the debt crisis
  • Technology scale-up difficulties at startup companies
  • Strategic corporate shifts because of increased availability of low-cost natural gas
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