National Petroleum News (NPN) has been the independent voice of the petroleum industry since 1909 as the opposition to Rockefeller’s Standard Oil. So, motor fuels marketing and retail is not just a sideline for us, it’s our core competency.
Issue link: https://read.dmtmag.com/i/116555
API's group director for downstream and industry operations, Bob Greco, said in a Feb. 21 statement: "We've filed this petition because the D.C. Circuit incorrectly concluded that none of the 17 petitioners had standing to challenge the E15 partial waivers – not the engine manufacturers whose products will run on this new fuel blend, not the petroleum industry who must undertake massive infrastructure changes to accommodate the blend and meet the renewable fuel mandate, and not the food producers who now face significantly greater competition in the commodities market for corn, the conventional feedstock for ethanol. "Had EPA stayed within its statutory authority and followed proper procedures, it would have waited until ongoing E15 testing on engines and fuel systems was completed before allowing the use of E15. Then it would have discovered that E15 is not safe for millions of vehicles now on the road. "Although we hope the court will resolve the E15 problem, we also believe our experience here represents only one of many underlying problems with the Renewable Fuel Standard, so we are calling on Congress to repeal the program." API is a national trade association that represents the oil and natural gas industry. INDUSTRY ANNOUNCEMENTS n NACS publishes assessment of fuels market through 2040 Liquid fuels will continue to be the dominant fueling option for drivers for the next two-plus decades, but the composition of these fuels will undergo significant change, according to a report released by the National Association of Convenience Stores (Alexandria, Va.). The new 46-page report, "Future of Fuels 2013," analyzes projections made by the U.S. Energy Information Administration (EIA) in its 2013 Annual Energy Outlook. NACS publishes the annual industry analysis to help retailwww.npnweb.com n NPN Magazine ers understand where the market is heading and which fuels are likely to be the dominant products consumed in the coming years so that informed investment decisions can be made. The market share of liquid fuels (gasoline, diesel fuel and E85) will maintain an overwhelming 99.1 percent share of the fuels market in 2040, according to the NACS report. However, the volumes of liquid fuels sold will change as fuel efficiency will increase and overall gasoline demand will fall 18.4 percent by 2040. "For fuels retailers, there are both positive news and concerns in the projections. The positive news is that liquid fuels will continue to dominate and these fuels are largely compatible with today's fuels infrastructure. The concern is that there will be significant changes in which fuels are sold, and these changes will not be driven by consumer demand but by government regulation," said NACS Vice President of Government Relations John Eichberger, who authored the NACS report. "Elected officials do a lot of great things, but what they don't do well is predict market dynamics and develop programs that help the market work as efficiently as possible. When we consider the fuels market, we must remember that market solutions must be sustainable both economically and environmentally, or they will not work," said Eichberger. "To do this, we must take an objective look at future trends, identify the challenges and opportunities that exist, and develop strategies to address them. This report is one tool to help us do this." "Future of Fuels 2013" evaluates government forecasts for fuel consumption, vehicle inventories and consumer demand based upon full implementation of federal corporate average fuel economy (CAFE) standards and the renewable fuels standard (RFS). The analysis shows that gasoline demand will see a sharp decrease through 2040, while diesel fuel demand will increase 27.4 percent and E85 demand will increase 1,000 percent. Even with these projections, gasoline will remain the dominant liquid fuel, with 88.2 percent of the market, compared to 3.8 percent for diesel fuel and 8.0 percent for E85. Here are other key findings from the NACS "Future of Fuels 2013" report: • Overall demand for transportation energy is expected to increase only 1.8 percent by 2040. The amount of energy required to travel one mile will decrease 27.2 percent by 2040, largely offsetting an increase in vehicles and miles driven. • Demand for liquid fuels will peak at 12.49 million barrels per day in 2016, but will decline 7.4 percent from this peak by 2040. Non-liquid energy sources like natural gas, propane, electricity and hydrogen will contribute 0.86 percent to lightduty vehicle transportation energy. • Hybrid, plug-in and electric vehicles will represent 7.4 percent of the light duty vehicles inventory in 2040. • By the time the RFS reaches maturity in 2022, gasoline will need to contain, on average, 27.4 percent ethanol to satisfy the mandate, a level nearly three-fold higher than that in 2012. "The Renewable Fuels Standard requires the use of 36 billion gallons of qualified renewable fuels by 2022," Eichberger said. "This requirement when combined with the new CAFE standards, presents a host of challenges to the market, not the least of which is incompatibility of the infrastructure and vehicles." "EIA's Annual Energy Outlook is the best assessment of how the fuels market might mature assuming that there are no major adjustments in regulations, disruptions in market dynamics or technology breakthroughs. Retailers who want to maintain customer transaction counts as demand declines must pay attention to the developing trends," said Eichberger. "Above all, we need to make sure that infrastructure challenges are March 2013