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Future of Fuels Will Include Diesel & E85 Growth at the Expense of Gasoline

ALEXANDRIA, Va. -- Diesel fuel consumption will increase by 26 percent and E85 consumption will increase by 2,210 percent by 2040, according to Future of Fuels 2014, a just-released report by NACS, the Association for Convenience & Fuel Retailing.

These gains will come at the expense of traditional gasoline, whose light-duty vehicle consumption will decline by 24 percent in 2040, according to the report.

Despite impressive percentage gains for alternative fuels in the next 26 years, NACS did point out that traditional petroleum -- today considered to be E10 -- will continue to be the fuel of choice for a majority of fill-ups at the pump in the future. NACS predicts that gasoline's share of the liquid fuels market will drop to 59.1 percent, while diesel fuel will expand to 38.8 percent and E85 will increase from a current 0.1 percent of fuels sold at the pump today to 2 percent in 2040.

"Fuels retailers face one of the most expensive decisions of their careers in deciding which fuels to sell, and this decision is further complicated by shifting demand and technology projections. NACS published this resource to give fuels retailers more insight into market direction so that they can best incorporate these trends into their strategic business decisions," said NACS Vice President of Government Relations John Eichberger, who authored the report.

Energy efficiency of vehicles will improve by 42 percent by 2040, according to NACS. Overall liquid fuel consumption is expected to decline by 8 percent by 2040.

"While some advocates claim that their product or technology can revolutionize the consumer fuels market, they could be looking at the future through rose-colored glasses. Therefore it’s important for retailers to understand how the government perceives the future of fuels and use that information to enhance their own opinions of forecasts," said Eichberger. "NACS encourages all retailers to seek additional information and to carefully evaluate the opportunities and challenges associated with any fuel product in the market."

In addition to fuel consumption projections, the NACS report also predicted what vehicles will be on the road in 2040. Hybrid vehicles are forecast to capture 4.4 percent of the market; plug-in hybrids are expected to have a 1-percent market share; and battery-powered electric vehicles are expected to capture 0.4 percent. Natural gas, propane and hydrogen vehicles are predicted to capture collectively 0.5 percent of the light-duty vehicle market by 2040.

Founded in 1961, Alexandria, Va.-based NACS has 2,100 retail and 1,600 supplier member companies.

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