The American Petroleum Industry has released a report on how implementation of the Waxman-Markey bill would affect domestic fuel production. The report projects that by 2030, U.S. refining production could drop 17% from today's levels if the climate bill is passed as currently proposed. The study says the drop would have to be made up by foreign imports, meaning the U.S. could end up relying on other countries for 19.4% of its refined fuel, nearly twice the amount it imports today.
Average U.S. refinery output would drop to 12 million barrels a day in 2030 from about 14.5 million barrels a day currently, if nuclear power, technology to reduce carbon emissions and the use of international offsets fail to become widespread. Refinery utilization rates could drop to 63.4%, from about 83% today. The API-backed study concludes that if the U.S. puts a price on carbon emissions, domestic production would decrease as U.S. refiners deal with higher costs and lower demand for fuel.
Even beyond the recession, industry experts expect demand for gasoline to continue declining as vehicle mileage improves and new biofuels are developed. Last month, Valero Energy Corporation, the largest U.S. refiner by volume, posted a quarterly loss and analysts are expecting at least one refinery to shut down due to slackening demand. Without the restrictions of a Waxman-Markey bill, the study predicts U.S. production rates would grow to an average 16.4 million barrels a day in 2030.