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New Jersey Petroleum Sector Overview

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U.S Gas Prices--Long Term. EIA 2005. Petroleum Price Problems ... NJ Retail Gas Prices 2000-2005. EIA 2005. PADD Regions. EIA 2005. Regional Refinery Capacity ... – PowerPoint PPT presentation

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Title: New Jersey Petroleum Sector Overview


1
New Jersey Petroleum Sector Overview
  • Clinton J. Andrews
  • E.J. Bloustein School of Planning and Public
    Policy
  • Rutgers, The State University of New Jersey
  • September 15, 2005
  • http//policy.rutgers.edu/andrews

2
Average NJ Regular Gas Prices
3
U.S Gas Prices--Long Term
4
Petroleum Price Problems
  • Petroleum market suffers from dramatic and
    persistent price volatility.
  • Unresponsive demand, lumpy supply, difficult to
    balance them.
  • Both consumers and producers seek external
    interventions that improve price stability.

5
5 Price Stabilization Regimes
  • Standard Oil monopoly (
  • Texas Railroad Commissions internationally
    influential pro-rationing of production (1930s)
  • Seven Sisters cartel (Exxon, Shell, British
    Petroleum, Mobil, Chevron, Texaco, and Gulf)
    (1920s - 1970s)
  • OPEC (1960 - present) effective only briefly
    during the 1970s-80s
  • Saudi-American regime (1970s - present)

6
Components of U.S. Gas Price
7
Gasoline Market Price Lags (Lags cause an
appearance of downstream price stickiness)
8
U.S. Average Profit Rates
9
New Jersey - Consumption
  • 10 in Population (8,698,879 in 2004)
  • 4 in Per Capita Income (41,332 in 2004)
  • 13 in Total Energy Consumption (2.5 quads in
    2001)
  • 38 in Per Capita Energy Consumption (294 million
    Btu in 2001)
  • 9 in Total Petroleum Consumption (26 million GPD
    in 2001)
  • 11 in Gasoline Consumption (10.8 million GPD in
    2001)
  • 11 in Distillate Fuel Consumption (4.4 million
    GPD in 2001)
  • 14 in LPG Consumption (0.9 million GPD in 2001)
  • 4 in Jet Fuel Consumption (3.9 million GPD in
    2001)

10
New Jersey - Upstream Supply
  • Crude oil reserves, production, wells, rigs None
  • Major PipelinesLPG None Crude Oil
    NoneProduct Colonial, Buckeye, Sun
  • Ports Jersey City, Sayreville, Sewaren, Perth
    Amboy, Linden, Carteret, Woodbridge, Elizabeth,
    Bayonne, Newark, Deepwater, Crab Point,
    Paulsboro, Gloucester, Camden, Pennsauken,
    Burlington, Duck Island

11
NJ Petroleum Product Imports 2004 by Product
12
New Jersey - Downstream Refining
  • Total distillation capacity of 615,000 BCD (26
    million GPD) in 2005
  • Amerada Hess (Port Reading _at_ -0- BCD)
  • Chevron USA (Perth Amboy _at_ 80,000 BCD)
  • Citgo Asphalt Refining (Paulsboro _at_ 51,000 BCD
    idle on 1/1/05)
  • Sunoco (Westville _at_ 145,000 BCD)
  • ConocoPhillips (Linden _at_230,000 BCD)
  • Valero Refining NJ (Paulsboro _at_ 160,000 BCD)

13
New Jersey - Retail
  • Gasoline Stations3,608 outlets in 20052.1 of
    U.S. total
  • Gas Taxes10.5 cents/gallon NJ tax(18.7
    cents/gallon wtd US average state tax)18.4
    cents/gallon Federal tax
  • 19 of NJ homes are heated by oil. Note that NJ
    has a 1 million barrel heating oil reserve in
    Woodbridge.

14
Classical Rationales for Governmental Action
  • above all, do no harm
  • Improve allocational efficiency (correct
    market failures like pollution)
  • Improve distributional equity (correct gross
    unfairnesses like freezeouts)
  • Improve macro stability (correct structural
    imbalances like trade deficits)
  • Controversial enforce national norms, pursue
    national objectives, cater to special interests?

15
Energy Policy Rationales
  • Security improvements (reliability of supply,
    self-sufficiency, non-proliferation)
  • Economic improvements (reasonable prices, less
    price volatility, job growth)
  • Environmental improvements (climate change, air
    pollution, water pollution, land damage)

16
Some Questions To Ask
  • Is there documented price gouging in NJ?
  • Are special product demands (e.g., jet fuel)
    affecting refineries ability to deliver
    gasoline, heating oil?
  • Are high energy prices slowing economic growth?
  • Is a new global price stabilization regime
    needed?
  • How should NJ balance economic, security, and
    environmental objectives of energy policy in
    longer run?

17
References
  • Hinton, D. (2005) Petroleum Profile New Jersey,
    online at http//tonto.eia.doe.gov/oog/info/state/
    nj.html
  • EIA (Energy Information Administration), U.S.
    Dept. of Energy (2005) Gasoline and Diesel Fuel
    Update, online at http//tonto.eia.doe.gov/oog/inf
    o/gdu/gasdiesel.asp
  • EIA (Energy Information Administration), U.S.
    Dept. of Energy (2005a) Company Level Imports,
    online at http//www.eia.doe.gov/oil_gas/petroleum
    /data_publications/company_level_imports/cli.html.
  • EIA (Energy Information Administration), U.S.
    Dept. of Energy (1999) Price Changes in the
    Gasoline Market, online at http//www.eia.doe.gov/
    oil_gas/petroleum/analysis_publications/pet_analys
    is_publications.html.
  • EIA (Energy Information Administration), U.S.
    Dept. of Energy (2004) Where Does My Gasoline
    Come From?, online at http//www.eia.doe.gov/neic/
    brochure/gas04/gasoline.htm.
  • FHA (Federal Highway Administration), U.S. Dept
    of Transportation (2003) Tax Rates on Motor Fuel,
    online at http//www.fhwa.dot.gov/ohim/mmfr/dec03/
    mf121tpg1.htm
  • AAA (American Automobile Association) (2005) Fuel
    Gauger Report, online at http//www.fuelgaugerepor
    t.com/NJavg.asp.
  • U.S. Department of Energy, Energy Information
    Administration, Energy in the United States 1635
    2000. Downloaded May 22, 2004 from
    http//www.eia.doe.gov/emeu/aer/eh/frame.html.
  • R.A. Musgrave, The Theory of Public Finance. New
    York McGraw Hill, 1959.

18
Appendix
19
U.S. Energy Use, 1635-2000 (Quadrillion Btu)
20
U.S. Energy Flows in 2004 Quadrillion Btu
21
U.S. Petroleum Balance 1949-2000
22
U.S. Petroleum Flows
23
Origins of U.S. Oil Imports
24
Worldwide Reserves
25
Petroleum Balance of Trade 2001
26
Basic Industry Flows
27
Products Made from Crude Oil (gallons per 42
gallon barrel)
28
Typical Refinery Yield
29
U.S. Refining Capacity
30
U.S. Cost of Crude Oil
31
U.S. Gas Prices - Monthly
32
NJ Retail Gas Prices 2000-2005
33
PADD Regions
34
Regional Refinery Capacity
35
Regional Inventories
36
Regional Movements
37
Regional Imports
38
Regional Consumption
39
Reformulated Gasoline Areas
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