Rising number of consumers switching to greener cars expected to help cut California's gasoline demand by 9%-13% in 2020, down from 12.3 billion gallons in 2013; decline also driven by state, federal politics: Bloomberg New Energy Finance

Allison Oesterle

March 18, 2014 (Bloomberg LP) – California may cut gasoline demand by at least 9 percent through 2020 as consumers switch to greener cars and state and federal policies boost efficiency.

Transport fuel use in the most populous state will drop by about 1 billion gallons to 11.2 billion gallons in 2020 from 12.3 billion gallons in 2013, Bloomberg New Energy Finance said in an e-mailed statement. If vehicle standards are strictly enforced, the decline could be as much as 13 percent, it said.

State and federal regulations covering the fuel efficiency of cars and the blending of biofuels with gasoline will drive the decline in gasoline consumption, according to BNEF, a London-based research group. That drop may sap demand from oil refiners in the state, including Exxon Mobil Corp., Valero Energy Corp. and Tesoro Corp.

“California will experience a significant shift in the make-up of both transport fuel demand and the composition of the vehicle fleet,” Salim Morsy, advanced transportation analyst at BNEF, said in the statement. “A drop in net fossil fuel demand may put pressure on California oil refiners’ margins in the coming seven years.”

Fuel demand in California has already dropped by more than 3 billion gallons a year since 2002 as consumers drove fewer miles and purchased more efficient vehicles, BNEF said.

To contact the reporter on this story: Alex Morales in London at amorales2@bloomberg.net To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.