Availability of Gasoline Imports in the Short to Mid Term: U.S. Perspective

Availability of Gasoline Imports in the Short to Mid Term: U.S. Perspective Joanne Shore John Hackworth Charles Shirkey Energy Information Administration NPRA Annual Meeting San Antonio, Texas March 2002 www.eia.doe.gov

Capacity Utilization Is High Source: EIA

U.S. is Dependent on Gasoline Imports Source: EIA Data for Year 2001

Atlantic Basin is Important Source of Gasoline Imports Source: EIA

U.S. Situation Today: Change and Uncertainty • Today’s gasoline imports essential to meet demand • High utilization: Growth in capacity or imports? • Changing product specifications -- reduces fungibility • Within the U.S. • Without the U.S.

Areas to be Covered • U.S. Ability to Produce Gasoline • Import Potential from Largest Import Sources • U.S. Balance Issues in 2007

Factors Influencing Future U.S. Light Product Production • Capacity • Maximum Utilization • Light Product Yield • Downstream Unit Capacity v Distillation • Product specifications • Loss of oxygenates and mandated oxygenate additions

U.S.Trends Leading to Today’s Capacity Balance • Closures of small refineries • Capacity reductions at operating refineries • Expansion at 70% of refineries with continuing operations • Shifts in capacity size • Shifts in capacity ownership

Refinery Closures Continue Source: EIA

Growth of Refineries Remaining in Operation by Size & Region Source: EIA

Changing Distribution of Capacity By Size Source: EIA

Shifting Ownership Source: EIA

Distillation & Downstream Unit Capacity Trends for Operating Refineries Source: EIA

Distillation Capacity Forecast Source: EIA

Maximum Utilization Limits Production Source: EIA

Average Utilization for All Months& Peak Months Source: EIA

Yet Total Mogas Yield Increased from Use of Other Components Source: EIA

Yields of Light Productsfrom Crude & Unfinished Oils Source: EIA

Summary Of Future Gasoline Production Drivers • Capacity – Net growth about 1.7% • Maximum Utilization – About 95% • Gasoline Yield from Crude & Unfinished Oils – Decline in MTBE Ban World

Import Potential from Major Atlantic Basin Import Sources “Dedicated” Supply • Canada • Venezuela • Virgin Islands Opportunistic Supply • Western Europe

Methodology: Domestic BalanceVenezuela Gasoline Production & Demand 120-170 170 Source: Olade and EIA Estimates

Methodology: Venezuelan Export Options

Europe to U.S. – Fewer Clean Streams But What About Canada to Europe?

Status Quo Scenario: Potential Growth in Total Gasoline Imports(PADD’s 1-3) Source: EIA

Details Show A Different Story Source: EIA

Western Europe RFG Supplies Could Diminish Significantly Under MTBE Ban Source: EIA

Putting Together U.S. Production Potential with Import Potential Source: EIA

U.S. Refinery Balance: With & Without MTBE (*) Base yield before adjustments to meet specification and oxygenate requirements. (**) Includes base ethanol blending of 106 MB/D in 2000.

California Can Resolve New Supply Needs in Various Ways Source: EIA

Conclusion Capacity and Imports • Will keep up with growth in gasoline demand in the U.S. MTBE Ban Impacts • Will significantly impact U.S. gasoline supply • Net Loss of Production Capability • Reduced Import Availability • Increased Utilization • Refinery Changes on Top of Low Sulfur Changes

Availability of Gasoline Imports in the Short to Mid Term: U.S. Perspective