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Winter energy economic outlook

Hydrocarbon Engineering,

American Petroleum Institute’s Chief Economist, John Felmy, held a press briefing on 21st November 2013 on the winter energy economic outlook. Below are some extracts;

Oil and oil products
‘Gasoline prices are US$ 3.22 a gallon today as we approach the Thanksgiving week, according to AAA. After falling for much of the summer and fall, prices have recently been pushed up by increases in world crude oil prices and rising US demand.’

‘The US Energy Information Administration’s latest driving season forecast projects that gasoline and diesel prices will hold steady through at least the first half of 2014. US refineries continue to produce record amounts of gasoline.’

‘Now turning to the coming winter, annual heating costs for natural gas users are estimated to be US$ 665 in the coming years according to EIA statistics.’

‘The recent surge in domestic energy production on state and private lands helped put downward pressure on prices for petroleum products like gasoline and diesel, as well as natural gas…We are already the world’s number one producer of natural gas, and the International Energy Agency believes that the US will be producing more oil then Saudi Arabia just a few short years form now.’

Biofuels and the environment
‘One major concern for consumers is ever increasing biofuel mandates under the Renewable Fuel Standard. These mandates could drive up gasoline costs by 30% and the cost of diesel by 300% by 2015, according to a study by NERA. EPA’s recent proposal to trim next year’s mandate is a welcome stopgap, but ultimately Congress must repeal these ever increasing biofuel mandates to protect consumers in the long run.’

‘One way to reduce demand is to consolidate car trips. By planning errands better and carpooling when possible, significant reductions in fuel use are possible. Consumers also can save gasoline by ensuring vehicle engines are tuned and tires are properly inflated. Both can increase miles per gallon. Also, those purchasing new vehicles might consider more fuel efficient models.’

‘To conclude, the good news is that energy costs are for the most part down. But there are specific policy changes the administration and Congress should make to help put downward pressure on prices. There are also small changes consumers can make that will save them over the course of a year.’

Adapted from press briefing by Claira Lloyd

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