|SIn recent years, the growth in ethanol was countered by the
loss of MTBE. But looking ahead,
ethanol will replace what would have been refinery-based gasoline output.
Both EIA and other forecasters see U.S. ethanol production growing towards
12-15 billion gallons per year, but the timing varies, and other critical
supply projections vary as well.
|SThe table on the right shows in the first column how the
incremental growth in gasoline was met between 2000 and 2005. The volumes show an average annual increase
for demand and for supply. Net imports
met about 58% of the demand growth.
|SThe second and third columns show two cases for how average
annual gasoline demand increases between 2005 and 2015 might be met.
|–The first case shows EIA’s 2007 Annual Energy Outlook. Average demand growth is 102 thousand
barrels per day. Only about 20% of the
increase is met by product imports, with the remaining 80% being met by
increased use of ethanol and refinery production. This case shows the need for some increased
refinery capacity over the next decade.
|–The second case is based on several forecasts and includes the IEA’s
projection for increased availability of gasoline from Europe. In this case, ethanol use is higher than in
the AEO case, hitting 15 billion gallons by 2015, which is an annual average
increase of 74 thousand barrels per day.
Increased use of lower-Btu ethanol results in a larger volume increase
in demand. Imports increase 50
thousand barrels per day, which could be met by Europe alone.
|SThe Combo Case shows little need for refinery gasoline
production increases, which indicates that the need for refinery expansion
capacity would be to meet the ten-year increase of 1.1 million barrels per
day of middle distillates. Total refinery capacity needs are less in this
case than in the AEO reference case, but even in the reference case,
expansion needs are modest.