The Road Ahead for Light Duty Vehicle Fuel Demand Joanne Shore Energy Information Administration...
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Transcript of The Road Ahead for Light Duty Vehicle Fuel Demand Joanne Shore Energy Information Administration...
The Road Ahead for Light Duty The Road Ahead for Light Duty Vehicle Fuel DemandVehicle Fuel Demand
Joanne Shore
Energy Information Administration
July 7, 2005
Refining Capacity Surplus Shrank As Refining Capacity Surplus Shrank As Demand Grew, Creating Future ChallengesDemand Grew, Creating Future Challenges
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U.S. Refining Capacity & Inputs
Gross Inputs
Operable Capacity
Source: EIA
Demand – A Crucial Factor Affecting Demand – A Crucial Factor Affecting Capacity DecisionsCapacity Decisions
• Transportation is major growth sector
• What could affect future growth?
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Transportation
Total End Use
U.S.Petroleum Consumption
Source: EIA
Future: U.S. Transportation Demand Future: U.S. Transportation Demand Growth Drives EIA’s Reference CaseGrowth Drives EIA’s Reference Case
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1
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2005 2010 2015 2020
LDV Demand Total Transportation
Increases in U.S. Petroleum Use for Transportation
Total Transportation Demand14.4 MMB/D in 2005
Source: EIA, Annual Energy Outlook 2005
Presentation OverviewPresentation Overview
• U.S. history and factors affecting light duty vehicle fuel demand
• European experience: Can diesel-fueled vehicles play a similar role in the U.S.?
• U.S. future: Reference Case & variations– Modest changes in vehicle technology can
slow demand growth significantly – but not quickly
– Hybrids and diesel vehicles can add to this impact
– But stopping demand growth is unlikely– Policy changes are needed to slow growth
Factors Affecting Light Duty Vehicle Factors Affecting Light Duty Vehicle (LDV) Petroleum Fuel Consumption(LDV) Petroleum Fuel Consumption
Efficiency (MPG)Miles Traveled
-Driving population
-Miles driven per driver
-Personal Income
-Cost to drive
-Other (Age, sex, etc.)
-Technology
-Power Train
-Hybrids
-Diesel
-Vehicle Mix (Cars v trucks)
Alternative Fuels
-Hydrogen, All Electric, All Ethanol, Natural Gas
VMT: More Vehicles Per Driver and VMT: More Vehicles Per Driver and More Miles Per DriverMore Miles Per Driver
Individual Driver Information
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5
10
15
20
25
30
35
1969 1977 1983 1990 1995 2001
Mil
es p
er D
ay
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
Veh
icle
s p
er D
rive
r
Daily VMT per Driver Vehicles per DriverNote: VMT – Vehicle miles traveled.
Source: Summary of Travel Trends, 2001 National Household Travel Survey, ORNL
Vehicles per Driver
MPG: Efficiency Improvements MPG: Efficiency Improvements Leveled OffLeveled Off
10
15
20
25
30
35
40
1970 1980 1990 2000 2010
Fu
el E
con
om
y (M
iles
Per
Gal
lon
) CAFE Estimates (Adjusted EPA)
Cars
Total LDV
Trucks
Fleet
Weight
4060 lbs
Fleet
Weight
3271 lbs
Fleet
Weight
3612lbs
Note: LDV weights are for 1975, 1985, 1995, 2004
Source: U.S EPA, Light-Duty Automotive and Fuel Economy Trends: 1975-2004, April 2004.
Fleet
Weight
4066 lbs
MPG: Historical Efficiencies Affected MPG: Historical Efficiencies Affected Demand Relatively QuicklyDemand Relatively Quickly
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
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78
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87
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lio
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all
on
s
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0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
Tri
llio
n M
ile
s
Light Duty Vehicle Fuel Use & Miles Traveled 1978-1987
Light Duty Trucks
Cars
Miles TraveledTotal Fuel Use
Source: Department of Transportation, FHA, Highway Statistics 2001, Table VM-1.
MPG: LDV Performance & Weight MPG: LDV Performance & Weight Countered EfficiencyCountered Efficiency
3000
3500
4000
4500
1975 1980 1985 1990 1995 2000 2005
9
10
11
12
13
14
15Weight (LBS) 0-60 Time (Sec)
0-60 Time (Sec)
Weight (LBS)
Source: U.S EPA, Light-Duty Automotive and Fuel Economy Trends: 1975-2004, April 2004.
MPG: Growing LDV Truck Share of MPG: Growing LDV Truck Share of Sales Hindered Fleet EfficiencySales Hindered Fleet Efficiency
20%
53%
0%
20%
40%
60%
80%
100%
1976 1980 1985 1990 1995 2000 2003
U.S. Car & Light Truck Sales Shares
Cars Light trucks
Source: Oak Ridge National Laboratory, Light Vehicle MPG and Market Shares System, Oak Ridge, TN, 2004, Wards AutoInfoBank
Jan-May Ward’s Sales
2004 2005
Cars 45.5% 46.2%
Light Trucks
54.5% 53.8%
Hybrid Vehicle Sales Picking UpHybrid Vehicle Sales Picking Up
• Toyota Prius– 2002 sales 20,119– 2003 sales 24,627– 2004 sales 53,991– 2005 projected sales ~100,000
• Toyota introducing Hybrid Lexus RX and Highlander
Source: Automotive News Market Data Book 2004, 2005
Recent Trends Recent Trends European Union-15 & U.S.European Union-15 & U.S.
15
20
25
30
35
40
4519
95
1996
1997
1998
1999
2000
2001
2002
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es P
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allo
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EU-15 LDDiesel
EU-15 LDV
EU-15Gasoline
US Cars
US LDV
US LD Trucks
Light Duty Vehicle New Sales Efficiencies
Source: Data Transportation Data Book (ORNL); ACEA (Michael Walsh)
European ModelEuropean Model
• Goal to reduce demand, carbon dioxide emissions (greenhouse gas) concerns
• Increased diesel preference over gasoline– Fuel savings while preserving performance (35% more
efficient than gasoline vehicles)– New LDV diesel penetration more than doubled in 6
years: 22% in 1997 to 44% in 2003
• Tax incentives plus targets– High fuel taxes and taxes favoring diesel– Purchase incentives for more efficient vehicles– Economics favor technology improvements
• Voluntary industry CAFÉ standards
Diesel PM and NOx Standards Diesel PM and NOx Standards Higher in U.S. than EuropeHigher in U.S. than Europe
Diesel PM and Nox Standards
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0.1
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0 0.01 0.02 0.03 0.04 0.05 0.06 0.07
PM (g/km)
NO
x (g
/km
)
U.S. Pre 2004
U.S. Today
EU-5?2010
EU 3Pre 2000
EU 4Today
JapanToday
Source: Michael Walsh, Motor Vehicle Pollution Controls, European Conference of Ministers of Transport, January 2000
European Preference for Diesel Grew European Preference for Diesel Grew Quickly since Late 1990s Quickly since Late 1990s
43.7
0
10
20
30
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50
Per
cen
t o
f N
ew
Reg
istr
atio
ns
1990 1992 1994 1996 1998 2000 2002
W. Europe Diesel-Fueled Vehicle Share of New Passenger Car Registrations
Source: ACEA www.acea.be
EU-15 Demand Mix Projected to See EU-15 Demand Mix Projected to See Declining Gasoline DemandDeclining Gasoline Demand
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100
150
2001
990
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20
00
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20
10
20
15
Mill
ion
To
nn
es/
Ye
ar Diesel Fuel
Gasoline
EU-15 Demand Mix
Source: History IEA; Forecast Purvin & Gertz
Factors Affecting LDV Efficiency (2003)Factors Affecting LDV Efficiency (2003)
44%
GasolineDiesel
2%
11%53%
EU U.S.
Diesel Share of
New Sales
LD Truck Share of
New Sales
Source: ACEA, ORNL Transportation Data Book, CCFA
U.S. & EU Trends Affecting EfficiencyU.S. & EU Trends Affecting Efficiency
Values in 2002Percent Change
1995-2002
EU-15 U.S. EU-15 U.S.
Population (Millions)
380.4 288.4 2.0% 8.3%
LDVs per
1000 Population488 766 14.8% 5.5%
Vehicle Weight (pounds)
2,677 3,951 10.3% 9.4%
Fuel Economy (MPG)
35.6 24.7 15.2% -0.8%
Sources: ACEA, ORNL Transportation Data Book, EPA Automotive and Fuel Technology Trends 75-04, Michael Walsh
Factors Improving EfficiencyFactors Improving Efficiency
Europe (EU-15)• Diesel vehicle share growth• Commitment to CO2
reduction– Voluntary CAFE by
manufacturers
– High fuel taxes, but lower taxes for diesel
• Technology improvements both diesel and gasoline
• Less stringent PM & NOx standards
U.S.• Small increase in light
truck CAFE• Recent fuel cost increases• Technology improvements
in gasoline vehicles• Hybrid interest
Factors Decreasing EfficiencyFactors Decreasing Efficiency
Europe• Increasing vehicle
size and performance• Increase in cost for
efficiency improvements
U.S.• Increase in vehicle
performance and size• Increased share of LD
trucks• Low fuel tax and few
efficient vehicle purchase incentives
• Manufacturers’ opposition to CAFE
• Small LD diesel market, strict NOx and PM
EU Lessons? EU Lessons? • Diesel may play larger role in the U.S. future
– Environmental emissions being overcome– Consumer issues overcome in Europe, and could
become a positive relative to gasoline– But fuel cost advantage may diminish
• Basic population growth and car-dependency issues will make slowing U.S. demand a larger challenge than in EU.
• U.S. would need to improve efficiency on large fraction of new vehicles to see impact– Europe’s diesel momentum in 1995 helped produce a
15% improvement in MPG in 7 years– Would unlikely be achievable in the US during next 7
years
U.S. Future: Three CasesU.S. Future: Three Cases
• Reference Case: Continuing trends
• CAFÉ: Evolutionary (not revolutionary) changes – Technology changes– Affects all vehicles in small ways
• CAFÉ + Hybrid/Diesel: Extreme case– Early, high penetration of hybrid and diesel vehicles– Affects small number of vehicles in large way– Illustrates practical limits to impacts on demand
Reference Case: Future MPG Improvements Reference Case: Future MPG Improvements Hindered by Continuing Shift Towards TrucksHindered by Continuing Shift Towards Trucks
Reference Case LD Vehicle Efficiency
23.8
22.3
18.517.2
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27
30
2005 2010 2015 2020
Mile
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allo
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0%
12%
24%
36%
48%
60%Percent TruckSales
Average CarMPG
Average TruckMPG
Average LDVMPG
Source: EIA, Annual Energy Outlook 2005
New Vehicle MPG ProfilesNew Vehicle MPG Profiles
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45
50
2005 2010 2015 2020
EP
A M
iles
Per
Gal
lon
Reference
CAFÉ
CAFÉ+Hybrid/Diesel
New Car Efficencies
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10
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40
45
50
2005 2010 2015 2020
EP
A M
iles
Per
Gal
lon
Reference
CAFÉ
CAFÉ+Hybrid/Diesel
New Light Duty Trucks Efficencies
Source: EIA
CAFÉ+Hybrid/Diesel Case Far Exceeds Even CAFÉ+Hybrid/Diesel Case Far Exceeds Even Europe’s High Diesel Penetration RatesEurope’s High Diesel Penetration Rates
Hybrid and Diesel Share of New LDV Sales
0
10
20
30
40
50
60
2005 2010 2015 2020
Pe
rce
nt
Reference Case
CAFE Case
CAFÉ+Hybrid/Diesel
Source: EIA
MPG: New Cars Represent 7.5%-8.0% of MPG: New Cars Represent 7.5%-8.0% of Total Stock Each Year, But Are Driven Total Stock Each Year, But Are Driven
Slightly More Than Older CarsSlightly More Than Older Cars
Fleet Age and Use Distribution
Vehicle Age Fleet SharePercent Miles
Driven
0-2 yrs 15% 21%
3-5 yrs 22% 25%
6-10 yrs 28% 29%
11 or more 35% 25%
Source: Summary of Travel Trends, 2001 National Household Travel Survey, ORNL
Even Fast Penetration of High Efficiency Even Fast Penetration of High Efficiency Vehicles Can’t Change Total Stock QuicklyVehicles Can’t Change Total Stock Quickly
CAFÉ + Hybrid/Diesel Efficiency Effect
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2005 2010 2015 2020
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es P
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New Cars
Total LDV Stock
New Trucks
Source: EIA
Lower Costs May Result in More Miles Lower Costs May Result in More Miles Driven (3% Rebound Effect)Driven (3% Rebound Effect)
LD Vehicle Miles Traveled
0500
100015002000250030003500400045005000
2005 2020 2020 CAFE
Bill
ion
Mile
s
Increase inMilesTraveled/DriverEffect
Increase inDrivingPopulationEffect
VMT in 2005
31.5 Miles Per Day Per
Driver
37.9 Miles Per Day Per Driver 39.1
Source: EIA
By 2020, CAFE Case Requires 40% By 2020, CAFE Case Requires 40% LessLess AdditionalAdditional Supply Than Reference Supply Than Reference
Increase in Light Duty Vehicle Fuel Use
6.0
7.0
8.0
9.0
10.0
11.0
12.0
2005 2010 2015 2020
Mil
lio
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arre
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ay Reference Case CAFE Case
CAFÉ+Hybrid/Diesel
2.9 MMB/D
1.7
0.8
2005-2020
Source: EIA
Implications for Refinery InvestmentsImplications for Refinery Investments
• It takes 10 years to begin to see effects of significant vehicle efficiency changes.
• Without much hybrid or diesel penetration, within 15 years, technology could reduce need for new capacity by 30-40%.
• With increased hybrid and diesel penetration, demand growth could be further slowed.
• But stopping demand growth soon requires unlikely to impossible vehicle/fuel changes.
• Furthermore, policy changes likely would be required to achieve even the modest CAFÉ Case.