Transportation Market Trends Opportunities for Additional GHG - PowerPoint PPT Presentation

Transportation Market Trends Opportunities for Additional GHG Reductions From Petroleum Transportation Fuels Workshop Sacramento, CA August 20, 2018 Siva Gunda Energy Assessments Division California Energy Commission Siva.Gunda@energy.ca.gov

Outline • Crude oil production trends & CA sources • Transportation fuel trends • Improving efficiency & rising use of EVs 8/20/2018 8/20/2018 2

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California & U.S. Production 1981-2018 12,000 Outside of California, U.S. oil production has increased 135.6 percent between the low point 9.989 million of 2007 (unrelated to hurricanes) and April 2018 primarily through greatly expanded barrels per day development of domestic shale oil deposits, steadily improving drilling efficiency & a dramatic increase of hydraulic fracturing. California output has declined 27.8 percent. 10,000 Although California contains some shale oil deposits (according to EIA & USGS), a similar rebound of oil production in the state has not occurred due to more complex geological formations that greatly increase development costs & a significant downward revision in the Thousands of Barrels Per Day volume of technically recoverable oil. 8,000 4.240 million barrels per day 6,000 7.535 million barrels per day 4,000 1.005 million barrels per day U.S. Less California California + Outer Continental Shelf 2,000 0.478 million barrels per day Source: Energy Information Administration (EIA) 0 Jan-1981 Jan-1982 Jan-1983 Jan-1984 Jan-1985 Jan-1986 Jan-1987 Jan-1988 Jan-1989 Jan-1990 Jan-1991 Jan-1992 Jan-1993 Jan-1994 Jan-1995 Jan-1996 Jan-1997 Jan-1998 Jan-1999 Jan-2000 Jan-2001 Jan-2002 Jan-2003 Jan-2004 Jan-2005 Jan-2006 Jan-2007 Jan-2008 Jan-2009 Jan-2010 Jan-2011 Jan-2012 Jan-2013 Jan-2014 Jan-2015 Jan-2016 Jan-2017 Jan-2018 8/20/2018 4

Change in Crude Oil Production January 2010 vs. March 2018 3,500 U.S. crude oil production has changed from 5.391 million barrels per day in January 3,069 2010 to a record10.474 million barrels per day during March 2018 3,000 2,500 Thousands of Barrels Per Day Crude oil production gains are from shale oil (tight oil) formations. 2,000 California & Alaska fields are conventional formations that have been producing for many decades (older fields). 1,500 915 1,000 455 389 500 347 168 0 Texas North Dakota New Mexico Oklahoma Colorado Rest of U.S. California Alaska -132 -128 Source: Energy Information Administration (EIA) -500 8/20/2018 5

California Refinery Oil Sources (1982–2017) 800 1.71 million barrels per day in 2017 – foreign receipts expected to grow as California’s output continues to decline. 700 600 Foreign 354.1 Million Barrels Millions of Barrels Alaska 500 77.1 Million Barrels 56.7 % 400 300 12.3 % California& Other 200 Domestic Lower 48 Sources 31.0 % 100 193.8 Million Barrels Sources: DOGGR, Energy Information Administration, Class 1 Railroads and the California Energy Commission. 0 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 8/20/2018 6

Annual Crude Oil Receipts into California Nearly 69 percent of oil processed in CA refineries Domestic Crude-by- 450,000 during 2017 was delivered via marine vessels. Rail Other Domestic Marine 400,000 Alaska 350,000 Saudi Arabia Ecuador Thousands of Barrels per Year 300,000 Iraq Waterborne receipts 250,000 Columbia of oil rising & diversity of foreign Brazil 200,000 sources increasing. Angola 150,000 INDONESIA 100,000 MEXICO KUWAIT 50,000 CANADA 0 ALL OTHERS 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sources: Energy Information Administration and the California Energy Commission. 8/20/2018 7

Canadian Crude Oil Imports – California & SF Bay Area 50% Contrary to the national trend, California refiners have 43.24% collectively not been increasing their use of Canadian 45% crude oils. The trend appears to be declining since 2010. Even if greater use of Canadian oil occurs over 40% time, refiners are expected to offset with other types of Percentage of Total Foreign Imports oil to maintain consistent average blended properties. 35% 30% 25% 20% Source: Energy Information Administration 15% Northern California Califiornia United States 10% 4.40% 5% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 8/20/2018 8

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California Total Gasoline Consumption Rebounds with Improved Economy 16,000,000 California Unemployment Rate 14% 13% 12.0 Percent 15,800,000 Percent of Labor Force Unemployed Unemployed 12% 11% 15,584,894 10% 15,600,000 9% 8% 15,491,961 4.9 Percent Thousands of Gallons 7% Unemployed 15,400,000 6% 5% 4% 15,200,000 3% Source:U.S. Bureau of Labor Statistics. 15,107,812 2% Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 15,000,000 Highest level since 2007. 14,800,000 14,701,647 14,606,188 14,600,000 14,540,241 14,486,190 14,400,000 Source: California Energy Commission analysis of State Board of Equalizationdata. 14,200,000 2011 2012 2013 2014 2015 2016 2017 8/20/2018 10

California Gasoline Consumption Steady Renewable Content 18,000,000,000 Base Gasoline Ethanol 16,000,000,000 14,000,000,000 12,000,000,000 10,000,000,000 Renewable content was an average concentration of 10.1 Gallons percent by volume for each gallon of finished gasoline consumed in the state during 2017. Blend wall of 10 8,000,000,000 percent can be exceeded through additional E85 sales. 6,000,000,000 4,000,000,000 2,000,000,000 0 2011 2012 2013 2014 2015 2016 2017 Sources: California Energy Commission analysis of data from the State Board of Equalization, Energy Information Administration & California Air Resources Board. 8/20/2018 11

California Diesel Fuel Consumption Increasing Renewable Content 4,000,000,000 3,500,000,000 3,000,000,000 2,500,000,000 California policies such as the Low Carbon Fuels Standard are compelling greater use of renewable fuel, attaining an Gallons average concentration of 13.4 percent by volume for each 2,000,000,000 gallon of diesel fuel consumed in the state during 2017. 1,500,000,000 1,000,000,000 Diesel Fuel Renewable Diesel Biodiesel 500,000,000 0 2011 2012 2013 2014 2015 2016 2017 Sources: California Energy Commission analysis of data from the State Board of Equalization, Energy Information Administration & California Air Resources Board. 8/20/2018 12

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California Gasoline Consumption 630 Annual Use Per Licensed Driver 625.7 625 Gallons of Gasoline Per Year Per Driver 620 615 612.2 610 605 598.6 600 596.2 595 592.5 591.7 591.3 California continues to 590 reduce gasoline use per driver, assisted by growing 585 sales of alternative vehicles. Sources: California Energy Commission analysis of State Board of Equalizationand Federal Highway Administration data. 580 2010 2011 2012 2013 2014 2015 2016 8/20/2018 14

CA vs. US - Gasoline Consumption Annual Use Per Licensed Driver 660 California U.S. Less California 653.3 652.2 650 644.9 644.5 Gallons of Gasoline Per Year Per Driver 70% 640 64.7 percent of total sales 636.0 634.1 65% Percentage of Total New Vehicle Sales 60% 630 52.3 percent of total sales Opposite trend outside 55% California as consumers 50% preferentially purchase less 620 fuel-efficient light trucks. 45% 612.2 Light Trucks as Percentage 40% of New Vehicle Sales 610 35% 30% Jan 2011 Apr 2011 Jul 2011 Oct 2011 Jan 2012 Apr 2012 Jul 2012 Oct 2012 Jan 2013 Apr 2013 Jul 2013 Oct 2013 Jan 2014 Apr 2014 Jul 2014 Oct 2014 Jan 2015 Apr 2015 Jul 2015 Oct 2015 Jan 2016 Apr 2016 Jul 2016 Oct 2016 Jan 2017 Apr 2017 Jul 2017 Oct 2017 598.6 600 596.2 592.5 591.7 591.3 590 Sources: California Energy Commission analysis of State Board of Equalizationand Federal Highway Administration data. 580 2011 2012 2013 2014 2015 2016 8/20/2018 15

Thank You For technical questions, please contact Gordon Schremp Transportation fuels expert Gordon.Schremp@energy.ca.gov Sudhakar Konala EV expert Sudhakar.Konala@energy.ca.gov 8/20/2018 16