(EIA) — Demand for distillate fuel oil, mainly diesel fuel, is experiencing strong growth both globally and in the United States. Heavy-duty vehicles (HDVs) in the United States used about 2 million barrels per day of diesel fuel in 2009. In November 2010, the U.S. Environmental Protection Agency and the National Highway Traffic Safety Administration jointly issued a proposed rulemaking that would establish greenhouse gas (GHG) emissions and fuel consumption standards for HDVs. The proposed GHG standards are mandatory beginning in model year (MY) 2014 while fuel consumption standards would be voluntary in MY 2014. The standards address three discrete HDV categories: combination tractors, heavy-duty pickups and vans, and vocational vehicles, such as garbage and dump trucks.
The Annual Energy Outlook 2011 (AEO2011) includes a sensitivity case that seeks to represent the impact of the proposed standards on projected fuel use. Data limitations on the types and quantity of heavy trucks sold according to the vehicle classifications specified in the proposed standards make it difficult to estimate the energy impacts that could be expected as the HDV fleet begins to comply with the new standards. In addition, it is difficult to define an accurate baseline from which to gauge improvement. Another issue is how compliance will be measured, and how accurately compliance testing procedures will replicate the average real-world performance of heavy-duty trucks. Finally, the sensitivity case does not consider the impact of any further increase in HDV standards beyond MY 2017.
Beginning in MY 2014, the first year that the proposed GHG standards are binding, technologies to improve fuel economy that otherwise would not have been purchased are adopted in the sensitivity case. For new medium heavy-duty trucks (gross vehicle weight ratings between 10,001 and 26,000 pounds) and new heavy heavy-duty trucks (gross vehicle weight ratings above 26,000 pounds), average on-road fuel economy increases by 8 percent and 10 percent, respectively, between 2013 and 2017 compared to 0 percent and 2 percent in the Reference case. As new trucks with higher on-road fuel economy penetrate the fleet only gradually, the average on-road fuel economy for the total stock of HDVs increases by 3.5 percent between 2013 and 2017 compared to 0.4 percent in the Reference case.
Total cumulative delivered energy consumption by heavy-duty trucks from 2014 to 2035 is about 3 percent lower in the sensitivity case than in the Reference case (Figure 1). This result reflects both the fleet turnover process and the improvement in projected Reference case fuel economy for heavy heavy-duty trucks after 2020, which significantly closes the gap between Reference and sensitivity case fuel economy for those vehicles. Because trucks in that category account for about 80 percent of overall freight truck fuel use, the projected difference in fuel use between the Reference and sensitivity case narrows over the last 15 years of the projection notwithstanding continued fleet turnover and the persistence of a major fuel economy advantage for new medium heavy-duty vehicles in the sensitivity case. While HDV fuel consumption, primarily diesel, is slowed by the proposed standards, fuel use is still projected to rise significantly in the sensitivity case due to increased freight travel demand as industrial output rises across the projection period.
Gasoline and diesel prices lower this week
The U.S. average retail price of regular gasoline dropped five and a half cents this week to $3.79 per gallon. This average price is still $1.07 per gallon higher than last year at this time. The biggest decrease came on the Gulf Coast, where prices fell almost nine cents on the week; prices in that region are the lowest in the country at $3.62 per gallon. The average price on the East Coast fell about eight cents, while West Coast prices were down almost six cents on average, but remain the highest among the major regions at $3.98 per gallon. In the Rocky Mountain region, gasoline prices were down two and a half cents on average. The Midwest saw the smallest decline, with prices falling less than two cents from last week.
The national average diesel price fell for the fourth consecutive week, dropping almost a nickel last week to $3.95 per gallon. The diesel price is $0.97 per gallon higher than last year at this time. The Rocky Mountains saw the biggest decline, with prices down eight cents in the region. East Coast, Midwest, and Gulf Coast regional prices each registered decreases of about five cents for the week. The average diesel price on the West Coast was four cents lower this week, and it remains the highest regional price in the country at $4.16 per gallon.
Propane stocks rise again
Inventories of propane continued to build last week as total U.S. stocks rose 1.2 million barrels to end at 32.8 million barrels. Most of the increase occurred in the Midwest region, which gained 0.6 million barrels. The Gulf Coast region gained 0.4 million barrels of propane while the East Coast region gained 0.1 million barrels. The Rocky Mountain/West Coast regional stocks remained unchanged. Propylene non-fuel use stocks represented 7.2 percent of total propane/propylene inventories.