API Statement To Senate Judiciary

A brief overview of the industry's status is in order. With the hurricane season past and much, but not all, of the lost Gulf of Mexico production and refining back on line, oil and natural gas prices have receded. But no one should conclude that we aren't facing some tremendous energy challenges ahead.The most recent forecasts of the United States Department of Energy’s Energy Information Administration (EIA) indicate we still haven't escaped our energy predicament. Its sobering message to consumers: Strong demand, hurricane affected production and infrastructure limitations could help keep markets tight and prices volatile for the foreseeable future. Complicating the overall supply/demand situation are numerous contributing factors. The new federal energy law eliminates the reformulated gasoline oxygen requirement in May, and ultra-low sulfur diesel will be introduced starting June 1.The industry is working hard to meet these new requirements, but they are major transitions and will present a challenge that could decrease supplies. America's oil and natural gas industry is an industry that has undergone great transformations in recent decades. Whereas once it produced two types of gasoline – leaded and unleaded, it now has 17 formulations. Twenty years ago there were 200 refineries producing about 250 billion gallons of product. Today there are just 148 making 330 billion gallons per year (Chart 1). http://www.api.org/Newsroom/testimony/senate-judiciary.cfm

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