|SMost “reference case” or “business as usual”
forecasts today show petroleum demand in the United States continuing to grow
over the next 25 years or so, being driven by transportation fuels.
|SEIA’s reference case shows petroleum demand
for transportation fuels reaching a level in 2025 that is more than 50%
greater than petroleum transportation demand today. An additional 7 million barrels per day
will need to be supplied, which argues for more capacity.
|SWe know factors can change this outlook. I would venture to say that a significant
slowing in demand growth or a significant shift in the mix between diesel and
gasoline could have tremendous impacts on the shape of the refining industry
in the future.
|SBut do such scenarios merit consideration? History can provide some insights. For example, in the early 1980’s, high
prices, a recession, and improved vehicle fuel efficiencies acted to reduce
|SThe next slides consider the impact fuel
efficiencies alone can have.