U.S. Petroleum Demand Decreased in 2006, Says API

January 24, 2007

The American Petroleum Institute (API) announced last week that total petroleum deliveries in the United States decreased by 1.1 percent in 2006. Jet fuel deliveries dropped by 2.8 percent as airlines continued to economize on fuel, and residual fuel oil deliveries dropped by 27 percent as electric utilities replaced that fuel with natural gas.

The year's largest increase in deliveries was for distillate fuel oil, which includes both highway diesel fuel and heating oil. API credits an increase in highway diesel fuel consumption for an overall increase of 1.3 percent for deliveries of distillate fuel oil. The institute notes that ultra-low sulfur diesel (ULSD) came into widespread production in mid-year and accounted for most of the fuel used by on-highway diesel trucks by the end of the year. That conclusion was confirmed by the U.S. Environmental Protection Agency (EPA) in early December, when the agency noted that about 85 percent of the highway diesel fuel sold at retail stations now meets the ULSD standard. See the EPA press release.

Gasoline deliveries increased only 0.8 percent, which led API to declare that the increase in gasoline deliveries was, in effect, "met entirely by a substantial jump in the blending of ethanol into gasoline." API estimates ethanol use in gasoline at 5.4 billion gallons in 2004, noting that more than 40 percent of all gasoline sold in the United States now includes ethanol. See the API's Monthly Statistical Report summary (PDF 21 KB). Download Adobe Reader.