1. Availability of Gasoline Imports in the Short to Mid Term: U.S. Perspective Joanne Shore John Hackworth Charles Shirkey Energy Information Administration NPRA Annual Meeting San Antonio, Texas March 2002 www.eia.doe.gov

2. Capacity Utilization Is High Source: EIA

3. U.S. is Dependent on Gasoline Imports Source: EIA Data for Year 2001

4. Atlantic Basin is Important Source of Gasoline Imports Source: EIA

5. U.S. Situation Today: Change and Uncertainty Today’s gasoline imports essential to meet demand High utilization: Growth in capacity or imports? Changing product specifications -- reduces fungibility –Within the U.S. –Without the U.S.

6. Areas to be Covered U.S. Ability to Produce Gasoline Import Potential from Largest Import Sources U.S. Balance Issues in 2007

7. Factors Influencing Future U.S. Light Product Production Capacity Maximum Utilization Light Product Yield –Downstream Unit Capacity v Distillation –Product specifications –Loss of oxygenates and mandated oxygenate additions

8. U.S.Trends Leading to Today’s Capacity Balance Closures of small refineries Capacity reductions at operating refineries Expansion at 70% of refineries with continuing operations Shifts in capacity size Shifts in capacity ownership

9. Refinery Closures Continue Source: EIA

10. Growth of Refineries Remaining in Operation by Size & Region Source: EIA

11. Changing Distribution of Capacity By Size Source: EIA

12. Shifting Ownership Source: EIA

13. Distillation & Downstream Unit Capacity Trends for Operating Refineries Source: EIA

14. Distillation Capacity Forecast Time Period Annual Average Shutdown Capacity(*) (MB/CD) Growth of Continuously Operating Capacity 1990-19951390.5% 1995-2000962.0% 2000-2007602.0% (*)Historical shutdowns are for years 1990-94, 1995-1999. Source: EIA

15. Maximum Utilization Limits Production Source: EIA

16. Average Utilization for All Months & Peak Months Source: EIA

17. Yet Total Mogas Yield Increased from Use of Other Components Source: EIA

18. Yields of Light Products from Crude & Unfinished Oils Source: EIA

19. Summary Of Future Gasoline Production Drivers Capacity – Net growth about 1.7% Maximum Utilization – About 95% Gasoline Yield from Crude & Unfinished Oils – Decline in MTBE Ban World

20. Import Potential from Major Atlantic Basin Import Sources “Dedicated” Supply Canada Venezuela Virgin Islands Opportunistic Supply Western Europe

21. Methodology: Domestic Balance Venezuela Gasoline Production & Demand 170 120- 170 Source: Olade and EIA Estimates

22. Methodology: Venezuelan Export Options

23. Europe to U.S. – Fewer Clean Streams But What About Canada to Europe?

24. Status Quo Scenario: Potential Growth in Total Gasoline Imports (PADD’s 1-3) Source: EIA

25. Details Show A Different Story Source: EIA

26. Western Europe RFG Supplies Could Diminish Significantly Under MTBE Ban Source: EIA

27. Putting Together U.S. Production Potential with Import Potential Source: EIA

28. U.S. Refinery Balance: With & Without MTBE (*) Base yield before adjustments to meet specification and oxygenate requirements. (**) Includes base ethanol blending of 106 MB/D in 2000.

29. California Can Resolve New Supply Needs in Various Ways Source: EIA

30. Conclusion Capacity and Imports Will keep up with growth in gasoline demand in the U.S. MTBE Ban Impacts Will significantly impact U.S. gasoline supply ›Net Loss of Production Capability ›Reduced Import Availability ›Increased Utilization ›Refinery Changes on Top of Low Sulfur Changes