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Petroleum Industry News

Gasoline demand slips to lowest May level since 2003

May's domestic petroleum deliveries, a measure of demand, were up from prior year and prior month, but were at its second-lowest level for any May since 1999, the American Petroleum Institute reported recently.

The increase in deliveries was driven by distillate fuels, jet fuel, and residual fuel oils. Total gasoline deliveries were marginally lower compared with May 2009 and April 2010. On a year-to-date basis, deliveries were up from the same five month period in 2009. May's ultra low sulfur distillate deliveries, a good indicator of economic growth, jumped 5.6 percent from prior year and 2.4 percent from prior month.

Domestic crude oil production in May 2010 slipped from prior month but continued to remain near five-year highs for the fifth month in a row. At 5.48 million barrels per day – a production level at its highest for any May since 2005 – crude production was up by 3.1 percent from May 2009. This was a marginal decrease from last month by 28,000 barrels per day or 0.5 percent.

The average utilization rate at U.S. refineries in May improved from April and jumped to 86.0 percent for the first time this year. This was also the highest level since July 2009. Total motor gasoline production in May was at 9.1 million barrels per day. This was also the highest level for any May, a trend seen in all five months of this year.

U.S petroleum imports showed mixed results in crude and product imports. Total imports were up 0.8 percent in May compared with prior year. While crude imports were also up in May compared with last year, product imports showed double digit declines as inventory levels increased for total motor gasoline, jet fuels, and ultra low sulfur distillates.

NPRA: What’s needed in an energy bill

President of the National Petrochemical and Refiners Association (NPRA), Charles Drevna, released the following statement about what America needs in an energy bill:

"America needs an energy bill that will improve the lives of our people and strengthen our economic and national security. This legislation can only be effective if it is based on sound economics and science, rather than soundbites, slogans, and political posturing.

"Economically and scientifically sound legislation must acknowledge that there is no single answer to America's energy needs – not petroleum, not coal, not nuclear power, not natural gas, not ethanol, and not solar or wind energy. We need a realistic combination of all these energy sources and more.

“Economically and scientifically sound legislation must also recognize that every form of energy – not just petroleum – has its downsides, as well as its positive aspects. And the legislation must accept the reality that petroleum-based fuels and other products will play a crucial part in providing the world with energy and with critically important petrochemicals for many decades to come.

"Energy legislation should enable the production of safe, reliable, and efficient energy at the lowest possible cost right here at home. It should strengthen our economy by reducing our trade deficit and by preserving and creating good American jobs. And it should enhance our national security by making us less dependent on energy from unstable areas of the world.

“Energy legislation must also recognize that at this time of soaring federal deficits, taxpayers cannot continue digging deeper into their wallets to fund endless subsidies to forms of energy unable to compete on a level playing field in a free-market economy.

"All these things are popular with the American people and should be able to win enough support in Congress to become law.

"What's proven unpopular and what has deadlocked legislative action are ill-conceived and counterproductive proposals focusing on emissions of carbon dioxide. The carbon restrictions in the Kerry-Lieberman bill in the Senate and in legislation passed earlier by the House amount to crippling self-imposed economic sanctions on every American.

"A federal carbon cap-and-trade law would punish hard-working Americans by adding billions of dollars each year to the cost of filling up the family car and heating and cooling the family home. It would throw millions of Americans out of work by raising the cost of the energy that fuels our nation's economic strength and job-creation engine.

"Instead of making a headlong charge into harmful, expensive, and ineffective new carbon restrictions, legislation should enable America's energy companies to produce more energy of all types as cleanly, efficiently, safely and affordably as possible in the United States. Americans deserve no less."

API comments on EPA E15 decision delay

The American Petroleum Institute issued the following statement regarding the Environmental Protection Agency's (EPA) June 18 announcement that it will delay its decision to allow higher levels of ethanol in gasoline until the fall:

"API is pleased with EPA's decision to delay approval of the use of higher levels of ethanol in gasoline. As the impacts of higher ethanol blends will fall on consumers, API believes that no action regarding E15 should be made until its effects on emissions, engine durability, and consumer safety have been confirmed through scientific testing.

"We remain committed to finishing the extensive testing that is underway in order to find the right market solutions for renewable fuels, and we look forward to continuing our work with the EPA as it proceeds with important decisions about ethanol and biofuel blend rates."

New industry task forces on oil spill preparedness and response

The National Ocean Industries Association (NOIA), Independent Petroleum Association of America (IPAA), and the American Petroleum Institute (API) have formed two new task forces to address oil spill preparedness and response.

"A recurring theme raised by the ongoing spill in the Gulf of Mexico is that the technology exists to drill successfully in deeper and deeper water, but the technology to respond to the release of oil in these environments appears not to have kept pace," said NOIA President Randall Luthi. "These new task forces will address that question and others."

"Independent oil and natural gas producers hold 90 percent of the offshore leases. Offshore energy production is a safety net against increased reliance on foreign oil, but with this production comes important responsibilities like protecting the safety of our workforce and employing every technology possible to care for the environment. These new task forces will help us achieve these goals while creating jobs, producing American energy, and creating an important revenue stream for local, state, and federal treasuries," said IPAA President and CEO Barry Russell.

The task forces will review the ongoing spill response actions, both on the surface and subsea, and will make recommendations on how to improve future response and containment efforts. The task forces will seek input from top academics and researchers, state and federal agencies, and fellow trade associations, among others. Findings and recommendations of the task forces will be shared with Congress, the Presidential Investigative Commission, the industry, and the public at large.

NOIA and IPAA look forward to working with the Administration and members of Congress on this initiative.

© American Coalition for Ethanol, all rights reserved.
The American Coalition for Ethanol publishes Ethanol Today magazine each month to cover the biofuels industryís hot topics, including cellulosic ethanol, E85, corn ethanol, food versus fuel, ethanolís carbon footprint, E10, E15, and mid-range ethanol blends.
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