The Biden administration’s plan to crack down on auto pollution and spur electric vehicles is expected to cut U.S. oil demand by about 17 billion barrels through 2055.
“We’re strengthening our energy security, we’re reducing our dependence on foreign oil” and “we’re reducing our dependence on fossil fuels,” Environmental Protection Agency Administrator Michael Regan said Wednesday.
The EPA estimated that its proposal, which will be finalized next year, would curb U.S. oil imports by up to 16 billion barrels through 2055. And while the projected demand reductions would increase over time, they translate into a decline of 1.6 million barrels per day. between 2027 and 2055, about 10.2% of current levels, according to Bloomberg calculations.
While the proposal is a potential boon for electric car makers, the expected reduction in demand for liquid fuel comes at the expense of crude oil refiners as well as biodiesel and ethanol producers.
The plan poses a “significant downside risk to US gasoline demand” and will leave US refineries more exposed to the export market, which could force some plants to close, said Alan Gelder, vice president of Wood Mackenzie’s refining, chemical and petroleum markets.
The American Association of Fuel and Petrochemical Manufacturers issued a scathing criticism of the proposal, saying the EPA erred by focusing on tailpipe emissions instead of creating opportunities to reduce the intensity of carbon from fuels through carbon capture systems, renewable production and other technologies.
Even with the EPA’s expectation that electric vehicles will account for two out of every three cars and light trucks sold by 2032, conventional gasoline-powered cars will be on America’s roads for decades to come. Internal combustion engines will still make up more than half of the light vehicle market in 2040, said Emily Skor, chief executive of the pro-ethanol group Growth Energy.
“The proposal puts a thumb on the scale of one technology at the expense of others,” Skor said, “rather than giving automakers the flexibility to pursue innovative strategies to decarbonize light-duty vehicles.”
