New Jersey Petroleum Sector Overview Clinton J. Andrews E.J. Bloustein School of Planning and Public Policy Rutgers, The S...
Average NJ Regular Gas Prices 1.79 Year Ago 2.43 Month Ago 3.12 Yesterday 3.10 $/gallon Current
U.S Gas Prices--Long Term
Petroleum Price Problems <ul><li>Petroleum market suffers from dramatic and persistent price volatility. </li></ul><ul><l...
5 Price Stabilization Regimes <ul><li>Standard Oil monopoly (< 1911) </li></ul><ul><li>Texas Railroad Commission’s intern...
Components of U.S. Gas Price
Gasoline Market Price Lags (Lags cause an appearance of downstream price stickiness) 4 Retail Gasoline Price Retail Stat...
U.S. Average Profit Rates
New Jersey - Consumption <ul><li>#10 in Population (8,698,879 in 2004) </li></ul><ul><li>#4 in Per Capita Income ($41,33...
New Jersey - Upstream Supply <ul><li>Crude oil reserves, production, wells, rigs : None </li></ul><ul><li>Major Pipelines ...
NJ Petroleum Product Imports 2004 by Product
New Jersey - Downstream Refining <ul><li>Total distillation capacity of 615,000 BCD (~26 million GPD) in 2005 </li></ul><u...
New Jersey - Retail <ul><li>Gasoline Stations : 3,608 outlets in 2005 ~2.1% of U.S. total </li></ul><ul><li>Gas Taxes : 10...
Classical Rationales for Governmental Action <ul><li>“ above all, do no harm” </li></ul><ul><li>Improve allocational effic...
Energy Policy Rationales <ul><li>Security improvements (reliability of supply, self-sufficiency, non-proliferation) </li><...
Some Questions To Ask <ul><li>Is there documented price gouging in NJ? </li></ul><ul><li>Are special product demands (e.g....
References <ul><li>Hinton, D. (2005) Petroleum Profile: New Jersey, online at http://tonto.eia.doe.gov/oog/info/state/nj....
Appendix
U.S. Energy Use, 1635-2000 (Quadrillion Btu)
U.S. Energy Flows in 2004 Quadrillion Btu
U.S. Petroleum Balance 1949-2000
U.S. Petroleum Flows
Origins of U.S. Oil Imports
Worldwide Reserves
Petroleum Balance of Trade 2001 20 111 Vietnam 55 USA 73 399 Venezuela 100 Jordan 8 45 UK 98 Japan 90 477 Saudi Arabia 100...
Basic Industry Flows
Products Made from Crude Oil (gallons per 42 gallon barrel)
Typical Refinery Yield
U.S. Refining Capacity
U.S. Cost of Crude Oil
U.S. Gas Prices - Monthly
NJ Retail Gas Prices 2000-2005
PADD Regions
Regional Refinery Capacity
Regional Inventories
Regional Movements
Regional Imports
Regional Consumption
Reformulated Gasoline Areas
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  • 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 1.79 Year Ago 2.43 Month Ago 3.12 Yesterday 3.10 $/gallon Current
  • 3. U.S Gas Prices--Long Term
  • 4. Petroleum Price Problems <ul><li>Petroleum market suffers from dramatic and persistent price volatility. </li></ul><ul><li>Unresponsive demand, lumpy supply, difficult to balance them. </li></ul><ul><li>Both consumers and producers seek external interventions that improve price stability. </li></ul>
  • 5. 5 Price Stabilization Regimes <ul><li>Standard Oil monopoly (< 1911) </li></ul><ul><li>Texas Railroad Commission’s internationally influential pro-rationing of production (>1930s) </li></ul><ul><li>Seven Sisters cartel (Exxon, Shell, British Petroleum, Mobil, Chevron, Texaco, and Gulf) (1920s - 1970s) </li></ul><ul><li>OPEC (1960 - present) effective only briefly during the 1970s-80s </li></ul><ul><li>Saudi-American regime (1970s - present) </li></ul>
  • 6. Components of U.S. Gas Price
  • 7. Gasoline Market Price Lags (Lags cause an appearance of downstream price stickiness) 4 Retail Gasoline Price Retail Station 1 Rack Price City Terminal 1 Pipeline Spot Gasoline Price Pipeline 0 Refinery Spot Gasoline Price Refinery 0 Crude Oil Spot Market Price Crude Oil Typical Pass-through Time (Weeks) Relevant Price Supply Chain Stage
  • 8. U.S. Average Profit Rates
  • 9. New Jersey - Consumption <ul><li>#10 in Population (8,698,879 in 2004) </li></ul><ul><li>#4 in Per Capita Income ($41,332 in 2004) </li></ul><ul><li>#13 in Total Energy Consumption (2.5 quads in 2001) </li></ul><ul><li>#38 in Per Capita Energy Consumption (294 million Btu in 2001) </li></ul><ul><li>#9 in Total Petroleum Consumption (26 million GPD in 2001) </li></ul><ul><li>#11 in Gasoline Consumption (10.8 million GPD in 2001) </li></ul><ul><li>#11 in Distillate Fuel Consumption (4.4 million GPD in 2001) </li></ul><ul><li>#14 in LPG Consumption (0.9 million GPD in 2001) </li></ul><ul><li>#4 in Jet Fuel Consumption (3.9 million GPD in 2001) </li></ul>
  • 10. New Jersey - Upstream Supply <ul><li>Crude oil reserves, production, wells, rigs : None </li></ul><ul><li>Major Pipelines : LPG : None Crude Oil : None Product : Colonial, Buckeye, Sun </li></ul><ul><li>Ports : Jersey City, Sayreville, Sewaren, Perth Amboy, Linden, Carteret, Woodbridge, Elizabeth, Bayonne, Newark, Deepwater, Crab Point, Paulsboro, Gloucester, Camden, Pennsauken, Burlington, Duck Island </li></ul>
  • 11. NJ Petroleum Product Imports 2004 by Product
  • 12. New Jersey - Downstream Refining <ul><li>Total distillation capacity of 615,000 BCD (~26 million GPD) in 2005 </li></ul><ul><li>Amerada Hess (Port Reading @ -0- BCD) </li></ul><ul><li>Chevron USA (Perth Amboy @ 80,000 BCD) </li></ul><ul><li>Citgo Asphalt Refining (Paulsboro @ 51,000 BCD idle on 1/1/05) </li></ul><ul><li>Sunoco (Westville @ 145,000 BCD) </li></ul><ul><li>ConocoPhillips (Linden @230,000 BCD) </li></ul><ul><li>Valero Refining NJ (Paulsboro @ 160,000 BCD) </li></ul>
  • 13. New Jersey - Retail <ul><li>Gasoline Stations : 3,608 outlets in 2005 ~2.1% of U.S. total </li></ul><ul><li>Gas Taxes : 10.5 cents/gallon NJ tax (18.7 cents/gallon wtd US average state tax) +18.4 cents/gallon Federal tax </li></ul><ul><li>19% of NJ homes are heated by oil. Note that NJ has a 1 million barrel heating oil reserve in Woodbridge. </li></ul>
  • 14. Classical Rationales for Governmental Action <ul><li>“ above all, do no harm” </li></ul><ul><li>Improve allocational efficiency (correct market failures like pollution) </li></ul><ul><li>Improve distributional equity (correct gross unfairnesses like freezeouts) </li></ul><ul><li>Improve macro stability (correct structural imbalances like trade deficits) </li></ul><ul><li>Controversial: enforce national norms, pursue national objectives, cater to special interests? </li></ul>
  • 15. Energy Policy Rationales <ul><li>Security improvements (reliability of supply, self-sufficiency, non-proliferation) </li></ul><ul><li>Economic improvements (reasonable prices, less price volatility, job growth) </li></ul><ul><li>Environmental improvements (climate change, air pollution, water pollution, land damage) </li></ul>
  • 16. Some Questions To Ask <ul><li>Is there documented price gouging in NJ? </li></ul><ul><li>Are special product demands (e.g., jet fuel) affecting refineries’ ability to deliver gasoline, heating oil? </li></ul><ul><li>Are high energy prices slowing economic growth? </li></ul><ul><li>Is a new global price stabilization regime needed? </li></ul><ul><li>How should NJ balance economic, security, and environmental objectives of energy policy in longer run? </li></ul>
  • 17. References <ul><li>Hinton, D. (2005) Petroleum Profile: New Jersey, online at http://tonto.eia.doe.gov/oog/info/state/nj.html </li></ul><ul><li>EIA (Energy Information Administration), U.S. Dept. of Energy (2005) Gasoline and Diesel Fuel Update, online at http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.asp </li></ul><ul><li>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 . </li></ul><ul><li>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_analysis_publications.html . </li></ul><ul><li>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 . </li></ul><ul><li>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 </li></ul><ul><li>AAA (American Automobile Association) (2005) Fuel Gauger Report, online at http://www.fuelgaugereport.com/NJavg.asp . </li></ul><ul><li>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 . </li></ul><ul><li>R.A. Musgrave, The Theory of Public Finance . New York: McGraw Hill, 1959. </li></ul>
  • 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 20 111 Vietnam 55 USA 73 399 Venezuela 100 Jordan 8 45 UK 98 Japan 90 477 Saudi Arabia 100 Iceland 57 3042 Norway 100 Haiti 98 640 Nigeria 95 Germany 85 176 Iran 96 France 14 41 Canada 31 China Oil as % of Export Earnings Oil Exports as % of Consumption Country Oil Imports as % of Consumption Country Exporters Importers
  • 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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