ETP: Education

The Premier Manufacturer of Fuel Additives

ETP: Education

The Premier Manufacturer of Fuel Additives

The Impact of Future Environmental Policy on Fossil Fuel Petroleum

The petroleum industry has been through multiple changes throughout its history, and the future (including renewable fuel sources) looks to be every bit as dynamic as the past. As an industry, we have endured product shortages and disruptions, government agency mandates removing components from fuels, ever-changing and varying crude sources, and countless other events.

Regardless of whatever historical changes our industry has faced in the past, the petroleum industry has always come out on top. To respond properly to future changes, it is very important that we understand the pressures that are driving change to identify ways to respond effectively.

Environmental policy changes driven by public demand are going to shape the future of the petroleum industry. According to a study of 2,627 adults taken in October 2019 by the Pew Research Center, more than 2/3 of the adults say that the US government is doing too little to reduce the effects of global climate change, and 63% of those polled felt that stricter environmental regulations are worth the cost.

We have all seen examples of how the overall consumer sentiment has shaped policy change, now let us look at how these policy changes might change the way that we operate in the future.

Increased Use of Renewable Fuel Sources

biodiesel in clear class

One way that the fuel industry will respond to the increasing demand to become “green” is through increased use of renewable fuel sources. Biodiesel is a commonly used renewable fuel source that is produced by using vegetable oils or animal fats using a process called “transesterification”. Biodiesel is commonly blended with standard #2 diesel throughout the US to create a more sustainable fuel source.

Another renewable fuel solution is called renewable diesel fuel. Like biodiesel, renewable diesel is also produced with vegetable oils and animal fats, but it is refined similar to the way that standard fossil fuel-based #2 fuel is. The result is a fuel that is chemically similar to petroleum diesel but is not made from fossil fuels.

Over the next 30 years, small engine gasoline consumption is expected to decline largely due to the consumer shift to electric-powered vehicles. What does this mean for heavy-duty diesel equipment? Heavy-duty diesel equipment is not predicted to be replaced.

Along with this, renewable diesel and biodiesel consumption is expected to expand. For fuel suppliers, this means that more and more competitors are going to be focused on diesel gallon sales to respond to the shift in demand. To remain competitive and profitable it will be increasingly important to understand how to optimize the delivery of renewable energy sources and to develop strategies to separate more unique offerings in the market.

Diesel Additives for Market Separation

Premium fuel partnerships increase profit margins and separate fuel suppliers from competitors by providing additional tangible benefits that set them apart from their competitors such as detergent to clean fuel injection systems, stability against oxidation and heat, winterization, and more. As the energy supply market shifts, partnerships to create loyalty and brand recognition will be increasingly important to achieve those goals.