Gasoline Supply: The Role of Imports (CRS Report for Congress)
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| Release Date |
Sept. 14, 2004 |
| Report Number |
RL32583 |
| Report Type |
Report |
| Authors |
Lawrence C. Kumins, Resources, Science, and Industry Division |
| Source Agency |
Congressional Research Service |
Summary:
Gasoline demand in the United States has grown consistently during the past decade, increasing
by
a total of 20%. Between 1999 and 2003, gasoline consumption grew by 500,000 barrels per day,
accounting for all of the increase in petroleum consumption during that period. While 2004 may see
growth slow down because of high prices, during the first seven months of the year gasoline demand
was up by another 1.9%.
The fact that gasoline supply has not kept up with demand has been reflected in pump prices
that have risen from $1.50 at the start of 2004 to as high as $2.06 per gallon in late May. When
supply and demand become out of sync with their previous relationship, prices change to establish
a new balance. The outcome has been a period of volatile gasoline prices, which have set record
highs that have become a focal point for consumers and policy makers, and raised concerns about
their impact on the economy.
Gasoline is supplied both by U.S. and foreign refiners. Domestic producers' capacity is limited.
As a result, nearly 1 million barrels per day of gasoline and its components are imported. Imported
blending components -- especially those used in ethanol-blended fuel -- are increasingly important
to total U.S. supply. Without this supplemental supply, gasoline would be less available and prices
likely higher.
Imports most recently have come from Canada and the U.S. Virgin Islands, which supply
one-third of the off-shore supply. Argentina, the Netherlands, Russia, the United Kingdom, and
Venezuela provide another third. Imports peaked in March 2004, took a dip, and reached new highs
in July. Increased imports may have contributed to pump prices backing off their May highs in late
summer.
New gasoline blending components from Venezuela and the rehabilitation of a refinery in
Aruba may also contribute to enhanced gasoline component supply later this year. Gasoline
component availability -- which has increased during 2004 -- gives domestic refiners an added
measure of flexibility in using their capacity, and contributes to enhanced supplies of fuels needed
to meet demand for ethanol-based gasoline and other specialized regional blends.
Potential policy concerns raised by growing reliance on gasoline imports include the availability
of foreign supplies that meet U.S. specifications, whether incremental foreign supplies can be
provided quickly enough to meet shifting demand, and the delivered price of imported gasoline.
Two legislative efforts were debated in the House regarding gasoline supply issues during 2004.
One, H.R. 4517 , has passed the House but not been taken up in the Senate. It would
provide for easier permitting for refinery capacity expansion. And H.R. 4545 , which
did not pass the House, would have limited the growth of special regional fuel blends, often called
"boutique fuels."
This report will be updated as events warrant.
