After years of wafer thin U.S. refinery capacity and periodic shortages, the opposite situation is likely to be true by the middle of next decade. Why? A variety of government initiatives, ranging from increased fuel efficiency standards for cars to mandatory use of renewable fuels, will succeed in cutting gasoline demand.
By 2015 or so, there will be little or no need to import gasoline, which now accounts for one in every nine gallons used in the U.S. In fact, at slack times, U.S. refiners, which operate some of the world's most efficient and advanced fuel making plants, are likely to seek export markets for their product.
The shift should help keep a lid on pump prices. At present, most gasoline imports come from Europe, requiring a long ocean journey, then carriage by truck from port to storage facilities. “This adds to the cost of gasoline, effectively setting a floor under U.S. prices for refiners,” says John Auers, a senior vice president with Turner, Mason & Co., a Dallas-based petroleum and petrochemical industries management and engineering consulting firm.
Some imports could still be required to meet demand at peak driving periods -- typically late spring through July 4. But closer, cheaper sources, such as Caribbean and Canadian refineries, have enough capacity for that, obviating the need to turn to Europe.
But dependence on foreign countries for transportation fuels won’t end. Note the weak links in the supply chain for lithium-ion car batteries -- the kind that will be used by plug-in electrics and advanced gasoline-electric hybrid vehicles.