Chapter
Key Regulations Affecting the Domestic Refining Industry
CAFE and GHG Vehicle Emission Standards
Tier 3 Motor Vehicle Emission and Fuel Standards
Stationary Source GHG Requirements
Market Changes and Key Environmental Regulations Likely Affected the Refining Industry
Increased Crude Oil Production Has Lowered Crude Oil Costs for Some Refiners
Domestic Consumption of Petroleum Products Has Declined
Two Key Regulations Have Likely Contributed to Declining Fuel Consumption and Compliance with One Has Increased Some Refiners’ Costs
CAFE and GHG Vehicle Emission Standards
RFS Has Had Three Main Effects
Regulatory Development Processes Contribute to EPA Delays in Issuing RFS Standards
Industry Outlook Depends on a Number of Factors
Uncertain Future Domestic Consumption
Extent to Which Refiners Can Export and Compete in Foreign Markets
Refiners Projected to Continue to Rely on Foreign Markets
Foreign Markets Could Present Both Challenges and Opportunities for U.S. Refiners
Recommendations for Executive Action
Agency Comments and Our Evaluation
Appendix I: Scope and Methodology
Appendix II: List of Stakeholders
Appendix III: Further Information Regarding the Renewable Fuel Standard, Compliance Credits, and the Blend Wall
Chapter 2: Energy Markets: Increasing Globalization of Petroleum Products Markets, Tightening Refining Demand and Supply Balance, and Other Trends Have Implications for U.S. Energy Supply, Prices, and Price Volatility(
The United States Is the Largest Consumer of Crude Oil and Petroleum Products, but Global Demand Has Grown Significantly in Recent Years
Key Aspects of the Petroleum Product Markets: Refining, Inventories, and Infrastructure
Pipeline and Marine Supply Infrastructure System
Several U.S. Agencies Regulate and Monitor the Downstream and Midstream Oil Industry and Petroleum Product Markets
Petroleum Products Markets Have Become Increasingly Global with Greater Trade and Prices Increasingly Linked across Countries
International Trade in Petroleum Products Has Expanded Significantly
Growth in International Trade of Petroleum Products Is Expected to Continue but Growth in Biofuel use May Limit or Change the Patterns of Trade
Global and Domestic Refining Capacity Have Not Kept Pace with Demand, Leading to Tight Demand and Supply Balance and Recently Contributing to Higher Petroleum Product Prices
Demand for Petroleum Products Has Grown More Quickly than Has Refinery Capacity, Tightening the Supply and Demand Balance Worldwide
Current Market Tightness Has Contributed to Higher Petroleum Product Prices, Higher Price Volatility, and Higher Industry Profits
Increased Profit Margins Have Led to More Investment, but Future Market Tightness Will Depend on Several Factors
Domestic and OECD Inventories of Petroleum Products and Crude Oil Have Declined Relative to Demand, with Mixed Effects on Prices and Price Volatility
Inventory Levels of Petroleum Products in the United States and Other OECD Countries have Generally Fallen over the Past Two Decades
A Number of Factors Have Contributed to the Long-Term Decrease in Inventory Levels Since 1980
Long-Term Inventory Cost Reductions have Likely Reduced Prices of Gasoline and Other Petroleum Products, but, In the Short Term, Reductions in Inventory Levels below Normal Ranges Can Lead to Higher Prices during Supply Shortfalls
U.S. Supply Infrastructure Is Constrained in Key Areas and Likely to Become Increasingly Constrained, Thereby Increasing Prices and Price Volatility unless Timely Investments Are Made
The Nation’s Supply Infrastructure Is Constrained in Key Areas and Likely to Become More Constrained
Infrastructure Disruptions Lead to Increases in Prices and Price Volatility and Constraints in Supply Infrastructure Could Exacerbate Price Effects
Expansions in Supply Infrastructure Are Planned, but High Construction Costs, Investment Risk, and a Complex Regulatory Environment Can Deter or Delay These Needed Infrastructure Investments
Recommendations for Executive Action
Agency Comments and Our Evaluation
Appendix I: Scope and Methodology
U.S. Petroleum Refining Industry and the Globalization of Petroleum Products
( Energy Science, Engineering and Technology )
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