This chapter forecasts transportation energy demand, for both the U.S. anc California, for the next 20 years. Our guiding principle has been to concentrat~ our efforts on the most important segments of the market. We therefore provide detailed projections for gasoline (58 % of California transportation energy B~in 1988), jet fueI (17%), distillate (diesel) fuel (13%), and residual bunker) fuel (10%). We ignore the remaining 2%--natural gas, aviation gasoIine, liquefied petroleum gas, lubricants, and electricity. Although we discuss prospects for the use of altematlve fuels such as methanoI and natural gas, we do not believe that these will be significant factors in the next 20 years. Table 2-1 gives an overview of transportation energy use in California and the U.S
Our forecasting methodology is based on the principle that predictions should not depend on variables that are themselves difficult to predict; for example, a forecast that uses relative fuel prices as a key component is of little use if it is not possible to determine accurately the relative fuel prices The resulting models are therefore quite simple: they depend only on such factors as demographacs, time trends, and alrplane scrappage patterns 1 Although our proJections do not expicitly model some factors, (e g., the effec of tightened vehicle emission standards, alrcraft noise restrmtIons, fuel prices, and congestion), we do take them into account to the extent that these facto~ were present, anc changing, in data from our modeI-calibratlon periods.
Our predictions are that jet and dmsei fuel demand wili grow at siightly lower than current rates. Gasoline demand wIiI grow at a much slower tare because vebacle ownership is becoming saturated We are unabIe to forecast residuai fuel demand, but it is irrelevant for energy pohcy since there will be a surplus of residual fuel in Califorma for the foreseeable future. Overall, we predict that transportation petroleum demand will grow considerably more slowly than during the last 20 years in both California and the U.S. This suggests that rapid conversion to alternative fuels cannot be justified by demand pressures.