Future of Transportation Fuels

API appreciates this opportunity to discuss the future of transportation fuels. Our industry has met the transportation needs of Americans for more than a century, and we will continue to rely on state-of-the-art technology to do so in the decades to come.

Looking ahead, we believe that advances in technology, consumer preference, and the workings of the marketplace will best determine the fuels of the future. We need to rely on these forces to shape our energy future, rather than attempt to dictate what fuels are to be used. Past efforts by government involving non-market mechanisms have only complicated the search for solutions to energy problems.

While it may come as a surprise to some, gasoline, diesel fuel, and other petroleum products have provided energy for consumers for well over a century. Why have these fuels endured for so long? There are a couple of basic reasons. First, hydrocarbons have been the choice of consumers worldwide, because they contain more than twice the energy per gallon as many other energy sources. A second reason is that technology has reduced dramatically the environmental impact of their use, enabling the production of cleaner, more efficient and environmentally responsive fuels.

For example, the average sulfur content in gasoline has been reduced by more than 90 percent to less than 30 parts per million. A new car today running on the latest low-sulfur gasoline and equipped with the most advanced emissions reduction technology has 97 percent less emissions than had a new vehicle in 1970.

There is a misperception by some about the time and costs involved in any transition to the next generation of fuels. Consider what would be involved in replacing the dominant role of oil with a substitute like hydrogen or solar power. Most experts agree that such a transition will require dramatic advances in technology and massive capital investments – and take several decades to accomplish, if at all.

The United States – and the world - cannot afford to leave the Age of Oil before realistic alternatives are fully in place. It is important to remember that man left the Stone Age not because he ran out of stones. And, some day we will leave the Age of Oil, but not because we will have run out of oil. Yes, eventually oil will be replaced, but clearly not until practical alternatives are found -- alternatives that are proven more reliable, more versatile, and more cost-competitive than oil.

We expect that the dominant transportation fuels will remain gasoline and diesel for at least two or three more decades – the minimum amount of time required to fully retire any existing and still growing fleet of automobiles and trucks powered by these fuels, and to deploy any replacement fuel source throughout the U.S. We cannot afford to prematurely retire these century-old champions, without full and complete assurances that worthy successors are in place.

Those who write off gasoline and diesel fuels fail to recognize how advanced technology is providing new and more efficient ways of using these time-tested products. For example, hybrid vehicles – powered partly by gasoline and partly by electricity – are a star that has arrived. Already, they are moving aggressively into the market, and their rate of growth will depend, in large part, on their price and performance.

In addition to hybrids and advanced internal combustion engines (ICEs), oil companies - working alone and with automakers - have invested millions of dollars researching new fuel cell technologies. Some are also partnered with the federal government through the Department of Energy’s FreedomCAR & Fuel Partnership, a public/private effort to examine the pre-competitive research required to develop technologies for a full range of affordable vehicles as well as the fueling infrastructure to support them. These technologies hold the potential for up to double the fuel efficiency of current gasoline-powered autos, with essentially zero tailpipe emissions. However, creating and maintaining a national fleet of such vehicles will face significant technical, economic, primary energy source availability, and infrastructure challenges.

The bottom line is that gasoline and diesel will likely remain the dominant transportation fuels for many decades to come. In view of its history of reliability and environmental progress, gasoline’s continued dominant role should be a reassuring prospect for U.S. consumers. Thank you.