A new report from Bloomberg New Energy Finance (BNEF) has shown that California may cut its transport fuel consumption by more than a billion gallons per year by 2020 due to policy initiatives and a burgeoning electric and high-efficiency vehicle culture.
According to Bloomberg, “the analysis puts forward two scenarios for the development of gasoline demand in the state over the next seven years.”
The ‘base-case’ scenario sees consumption dropping from 12.3 billion gallons in 2014 to 11.2 billion gallons in 2020, which amounts to a reduction of 9%.
The more aggressive scenario sees a drop of 13%, down to 10.6 billion gallons in 2020, thanks to strict efficiency standards being met.
“California will experience a significant shift in the make-up of both transport fuel demand and the composition of the vehicle fleet,” said Salim Morsy, advanced transportation analyst at Bloomberg New Energy Finance. “A drop in net fossil fuel demand may put pressure on California oil refiners’ margins in the coming seven years.”
BNEF highlight several factors which they believe are likely to be influential impactors on the California market, including the federal fuel efficiency standards — more commonly referred to as CAFE standards — as well as the California zero-emissions vehicle program, the federal Renewable Fuel Standard, and California Low Carbon Fuel Standard.
According to BNEF, each of these policy initiatives is likely to encourage and help Californian drivers to minimise their gasoline consumption and move to hybrid electric and gas fueled vehicles. Meanwhile, the report sees a continuing influx of electric vehicles entering the State’s fleet, minimising emissions even further.
A White Paper summarizing the analysis on California’s evolving transport fuel market has been published today and is available at http://about.bnef.com/white-papers/.
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