The American Petroleum Institute, a national trade organization that represents all aspects of the oil and natural gas industry, recently held a blogger’s conference call detailing the state of the industry in the U.S.
“Our 2008 year-end figures on U.S. supply and demand…show the largest decline in U.S. petroleum
consumption in 28 years,” said Ron Planting, Manager of Statistics for the American Petroleum Institute. “Rising prices earlier in the year and the weakening economy later in the year [created] a double-barreled effect….We’ve seen a decline in imports for the year. We’ve also seen refinery activity slowing down because demand was slowing down but they still produced an all-time record amount of diesel fuel for the year. And, finally, we saw another decline of oil production.”
John Felmy, API’s chief economist also indicated that China played a significant role in this year’s market fluctuations, stating that China’s demand for fuel pre-Olympics was very high followed by a sharp decline.
API also addressed how the declining demand was impacting the industry’s ability to be environmentally friendly…and how they are readjusting their focus to “new” fuels.
“Companies are very, very focused on meeting their environmental requirements,” said Felmy. “There’s an interest in moving more and more to diesel because the world is moving more toward diesel fuel. And with the new ultra-low sulfur diesel that we have in the United States, it may present an opportunity to start to increase diesel use in the fleet.”
Despite the economic numbers indicating that the demand for fuel was less, API called on the Obama administration to expand domestic oil and gas production.
“With population growth of about 24 percent by 2030, with GDP growth of 75 percent, we’re going to need more energy, even if we do dramatically improve energy efficiency in the economy – and it’s projected to improve by roughly a third,” said Felmy. “As long as we have 250 million cars out there that run on gasoline and diesel fuel and airplanes that run on jet fuel and diesels on diesel fuel for those railroads and so on, we’re going to need more oil and gas.”
Felmy continued by saying that by 2030, oil and gas is still going to be about 59 percent of U.S. energy supply…only down from 63 percent today. He also stated that even with improved fuel economy, petroleum will be 40 percent of the auto sector.
Felmy called for increasing exploration and production of domestic oil and gas, while at the same time upholding its environmental reputation.
“We’ve been environmentally sound,” he said. “Let’s look at our record versus the rhetoric.”
API indicated that there was another reason for supporting domestic fuel production – it employs nearly 6 million people and is part of the investment and retirement portfolio of millions more.
“The public strongly supports developing our own oil and gas resources…it can help in terms of more employment, reduced imports – a better balance of trade – and good-paying jobs for our economy,” said Felmy.
