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California Transportation Fuel Demand and Production Outlook & Issues

California Transportation Fuel Demand and Production Outlook & Issues. 6th California State Fleet Management Conference October 31, 2001 Double Tree Hotel - Sacramento. Pat Perez, Manager (pperez@energy.state.ca.us) Transportation Fuel Supply & Demand Office CALIFORNIA ENERGY COMMISSION.

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California Transportation Fuel Demand and Production Outlook & Issues

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  1. California Transportation Fuel Demand and Production Outlook & Issues 6th California State Fleet Management Conference October 31, 2001 Double Tree Hotel - Sacramento Pat Perez, Manager (pperez@energy.state.ca.us) Transportation Fuel Supply & Demand Office CALIFORNIA ENERGY COMMISSION

  2. Presentation Topics • Consumption of Transportation Fuels • Production of Transportation Fuels • Major Challenges Facing the Market • State Policies and Programs

  3. Use of Petroleum Fuels Continues to Grow

  4. Usage Influenced by • Population growth • Consumer taste • Commuting patterns-- the location of residences and work

  5. Usage Influenced by • Technological change • Regulations • The economy • Price of fuel

  6. Consumption of Gasoline Is Expected to Increase • Increase in Vehicle Fuel Efficiency has leveled off • Growth in Vehicle Miles Traveled (VMT) will directly result in higher consumption

  7. Vehicle Fuel Efficiency

  8. Vehicle Miles Traveled

  9. Statewide Gasoline Fuel Demand • CEC Staff forecast 22% increase in consumption between 2000 and 2010 • Growth from over 14 billion in 2001 to over 17 billion gallons annually • An increase of over 3 billion gallons

  10. Forecast of Gasoline

  11. Forecast of Demand for Diesel is Similar to Gasoline

  12. California Refinery Capacity is Located in Both the North and South

  13. Currently • Refineries have little spare capacity • Refineries report no large scale expansion plans

  14. California Refinery Capacity Has Increased through: • Higher Capacity Utilization • “De-bottlenecking” Existing processes

  15. Growth in Supply Expected to Come From • A somewhat slowing, but continuing de-bottlenecking” of existing processes • Growth in imports of finished products and blending components

  16. Major Challenges Facing The California Transportation Fuel Market • International Events and World Economy • Uncertainty surrounding the phase-out of MTBE and introduction of ethanol • Changing fuel specifications including Ultra-low Sulfur Diesel

  17. World Events and World Economy • Supply and Price of Oil will continue to react to International Events • A world-wide recovery or continued recession will directly impact the California transportation fuel market through the price of oil, impacts on the local economy, and price of gasoline

  18. Gasoline Price Volatility

  19. Uncertainty Surrounding the Phase-out of MTBE and Use of Ethanol in Gasoline • Cost Impacts • Supply Concerns • Ethanol Logistics

  20. California Ethanol Demand

  21. State Policies, Programs and Activities • Reports (recent) • Costs and Benefits of Biomass-to-Ethanol Industry • Full Fuel Cycle Efficiency Study • MTBE Phase-out Quarterly Report • USA Ethanol Survey

  22. State Policies, Programs and Activities • Reports (forthcoming) • Joint CEC-ARB Study: Strategies to Reduce Petroleum Dependency (AB 2076) • Strategic Fuel Reserve Feasibility Study (AB 2076) • Gulf-Coast to California Pipeline Feasibility Study (AB 2098)

  23. State Policies, Programs and Activities • Transportation Technology Programs • Green Star Vehicle Program (Up to $3,000 per vehicle) • Alternative Fuel Vehicle Infrastructure ($2.5 million) • Electric Vehicle Infrastructure Program (Up to $750 with another $750 in matching dealer incentives)

  24. Conclusions • Consumption will grow more than our ability to produce petroleum products in-state • Imports of petroleum products and gasoline blending components will rise • Opportunities for alternative fuels will grow

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