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Western Governor’s - WEIB

This analysis addresses critical issues surrounding the petroleum industry in the Western United States. It examines shortfalls, the reliability of oil supply, and short/long-term challenges, including regulatory impacts and government roles. Key topics include boutique fuels, product inventories, the rising cost of imports, and long-term supply strategies. The discussion also covers EPA approvals, pipeline infrastructure, and the implications of antitrust issues, while emphasizing the need for clear government policies and cooperative stakeholder engagement for sustainable solutions.

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Western Governor’s - WEIB

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  1. Western Governor’s - WEIB Petroleum in the West Dave Smith, bp Oct. 2, 2002

  2. Petroleum in the West • Problem Statement - Shortfall?? • Oil industry – historical reliable source of product • Short/Long term issues • Extent/duration of the problem • Role of Government? • Boutique fuels – not the only issue • Performance specifications preferred • Regional harmonization??

  3. Petroleum in the West • Product Inventories • Costs vs risks • Las Vegas - KM response • Imports to the West • Period of transition – short term • Increase overall supply options - long-term • Longer supply lines • Fed. Energy Legislation – oxygen mandate • Phoenix summer oxy requirement – EPA approval? • Eliminate unneeded winter oxygenate programs • Pipelines: KM & Longhorn Pipeline

  4. Petroleum in the West • California (CO2 Limits) & Federal CAFÉ – impact • Don’t forget diesel efficiency – Arizona classification of ULSD + PM traps as a clean fuel • Auto’s plans to encourage clean diesel use

  5. Petroleum in the West • Antitrust Issues • Compliance Plans – CBG 3 • Contingency Planning – CEC/Industry • Information & Analysis Role – Contact Point • Variances – federal, state, local • CARB model • Know your options – Las Vegas?? • Contacts • Communications to Key Opinion Leaders • Uniform message

  6. Petroleum in the West • Government’s Role: • Clear rules – performance driven • Enforce rules • Plan for the unexpected • Provide reliable source of information to key stakeholders • Provide leadership in short-term disruptions • Work cooperatively with stakeholders for long term solutions

  7. SFR ISSUES • “..if we build it, they will come”. • The existence of an SFR will not lead to a reduction in privately-held inventory • How much inventory is in California? • How big a SFR is needed? • Estimate of “refinery growth” was too low. • SFR must accept components as refill, and have the capability to blend into CARBOB. • Summer gasoline only.

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