Availability of Gasoline Imports in the Short to Mid Term: U.S. Perspective Joanne Shore John Hackworth Charles Shirkey Energy Information Administration NPRA Annual Meeting San Antonio, Texas March

Capacity Utilization Is High Source: EIA

U.S. is Dependent on Gasoline Imports Source: EIA Data for Year 2001

Atlantic Basin is Important Source of Gasoline Imports Source: EIA

U.S. Situation Today: Change and Uncertainty Today’s gasoline imports essential to meet demand High utilization: Growth in capacity or imports? Changing product specifications -- reduces fungibility –Within the U.S. –Without the U.S.

Areas to be Covered U.S. Ability to Produce Gasoline Import Potential from Largest Import Sources U.S. Balance Issues in 2007

Factors Influencing Future U.S. Light Product Production Capacity Maximum Utilization Light Product Yield –Downstream Unit Capacity v Distillation –Product specifications –Loss of oxygenates and mandated oxygenate additions

U.S.Trends Leading to Today’s Capacity Balance Closures of small refineries Capacity reductions at operating refineries Expansion at 70% of refineries with continuing operations Shifts in capacity size Shifts in capacity ownership

Refinery Closures Continue Source: EIA

Growth of Refineries Remaining in Operation by Size & Region Source: EIA

Changing Distribution of Capacity By Size Source: EIA

Shifting Ownership Source: EIA

Distillation & Downstream Unit Capacity Trends for Operating Refineries Source: EIA

Distillation Capacity Forecast Time Period Annual Average Shutdown Capacity(*) (MB/CD) Growth of Continuously Operating Capacity % % % (*)Historical shutdowns are for years , Source: EIA

Maximum Utilization Limits Production Source: EIA

Average Utilization for All Months & Peak Months Source: EIA

Yet Total Mogas Yield Increased from Use of Other Components Source: EIA

Yields of Light Products from Crude & Unfinished Oils Source: EIA

Summary Of Future Gasoline Production Drivers Capacity – Net growth about 1.7% Maximum Utilization – About 95% Gasoline Yield from Crude & Unfinished Oils – Decline in MTBE Ban World

Import Potential from Major Atlantic Basin Import Sources “Dedicated” Supply Canada Venezuela Virgin Islands Opportunistic Supply Western Europe

Methodology: Domestic Balance Venezuela Gasoline Production & Demand Source: Olade and EIA Estimates

Methodology: Venezuelan Export Options

Europe to U.S. – Fewer Clean Streams But What About Canada to Europe?

Status Quo Scenario: Potential Growth in Total Gasoline Imports (PADD’s 1-3) Source: EIA

Details Show A Different Story Source: EIA

Western Europe RFG Supplies Could Diminish Significantly Under MTBE Ban Source: EIA

Putting Together U.S. Production Potential with Import Potential Source: EIA

U.S. Refinery Balance: With & Without MTBE (*) Base yield before adjustments to meet specification and oxygenate requirements. (**) Includes base ethanol blending of 106 MB/D in 2000.

California Can Resolve New Supply Needs in Various Ways Source: EIA

Conclusion Capacity and Imports Will keep up with growth in gasoline demand in the U.S. MTBE Ban Impacts Will significantly impact U.S. gasoline supply ›Net Loss of Production Capability ›Reduced Import Availability ›Increased Utilization ›Refinery Changes on Top of Low Sulfur Changes