High oil prices forecast to stay

? Oil prices will persist near or above $50 a barrel for years and force a shift to more fuel-efficient cars and alternative fuels, the government said Monday, discarding earlier predictions that costs would drop to around $30 a barrel.

The Energy Department forecast was more positive on natural gas prices. It said they would retreat from the recent spikes – to more than $14 per thousand cubic feet – and settle at under $5 in the long term as demand weakens, especially for electricity production.

The analysis reflected a significant change from the department’s projections a year ago when it predicted oil prices in constant dollars – not counting normal inflation – would retreat in the long term and settle at $31 a barrel by 2025.

The report issued Monday said that oil prices would remain in the mid-$40 range or higher in coming years and average $54 a barrel by 2025, increasing to an average of $57 a barrel by 2030 when adjusted for inflation. Crude oil prices have been hovering around $60 a barrel.

The long-term forecast, which attempts to gauge the nation’s energy picture 20 years from now, assumed no major policy shifts related to so-called “greenhouse” gases or potential oil exploration in the Arctic National Wildlife Refuge in Alaska.

With oil prices expected to remain high, the use of unconventional transportation fuels such as ethanol and biodiesel will grow in acceptance, the agency said. The EIA report also projected a sharp increase in the use of more efficient hybrid gasoline-electric cars and trucks and more fuel efficient diesel technology.