Future Directions for Atlantic
Basin Diesel Demand through 2015
Diesel/gasoline demand ratio grows
Greenhouse gas driver
Switch from bunker fuel
Continued distillate growth higher than gasoline
Light duty diesel growth has small impact on demand growth
Switch from bunker
fuel to distillate
SPulling together the factors influencing diesel supply and
demand in the Atlantic Basin, we begin with demand for transportation fuels
As already mentioned, even with no further increase in penetration of
diesel vehicles, the ratio of diesel to gasoline demand will grow as the
fleet continues to change, moving toward the penetration rate.
Greenhouse gas concerns may also impact diesel demand.The EU set a target goal for CO2
reduction for road transportation, and has been relying on a voluntary plan
by automakers to achieve that goal.Despite some progress, mostly stemming from the switch from gasoline
to diesel-fueled vehicles, it is clear that progress is insufficient to
achieve their goal.
It now seems that mandatory requirements will be next.Discussions indicate more vehicle
efficiency requirements may be on the slate. But even with increased
efficiencies, new car penetration is slow to impact total demand.
Also, with the interest in reducing sulfur in ocean-going vessel
fuels, bunker fuel may be replaced with distillate increasing distillate
demand even more.
SNow look at the U.S.
Overall, most factors point to higher growth of diesel in the U.S.
than for gasoline.Diesel fuel demand
growth has been mainly due to increased demand from heavy-duty vehicles.
There may be some growth in the light-duty market, but it seems diesel
penetration will initially be in the heavier end of this light-duty market
the heavier luxury cars and SUVs for example.This could help push up diesel growth
relative to gasoline growth.
Hybrids and general efficiency improvements for gasoline fueled
vehicles will have a small impact on demand before 2010, but after 2010,
efficiency gains could begin to affect gasoline demand growth.
As in the case of Europe, any shift to distillate for ocean-going
vessels would also add to U.S. diesel demand.