Presentation given to Argus 2021 Gasoline Live conference on 8th June 2021 by Neil Watt (Head of Analytics, BB Energy). Discussion of covid related impacts on U.S gasoline demand as well as fleet efficiency and EV infrastructure considerations.

1. US Demand Post-Covid: Recover or Evolve?
Neil Watt
Head of Analytics, B.B Energy
Argus Gasoline Conference
June 2021

2. Overview
Part I: Covid Related Demand Dynamics
1. Overview
- Demand Impacts by Travel Purpose
- Demand Dynamics by State
2. Retail & Recreation Recovery
3. Travel to Public Spaces
4. Working From Home Evolution
Part II: Long Term Trends
5. Fleet Efficiency
6. EV infrastructure (Simulation)
Part III: Market and Conclusion
7. Market and Conclusion
8. Sources
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3. Part I: Covid Related Demand Dynamics
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4. 1. Overview: Demand Impacts by Travel Purpose
• 2020 demand was 1.3 Mbd/14 % lower YoY.1
• Majority of demand losses relate to lower work
travel.2, 3, 4, 5, 6, 7
• ~ 80% lower work travel explained by WFH.7,8
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5. 1. Overview: Demand Dynamics by State
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• Huge variation in demand losses by state. 1, 9
• Politically sensitive; party control had higher
correlation with demand losses than Covid
cases per capita in Q1.1, 9, 10, 11, 12, 13, 14, 15
NJ
CA
NY FL
Δ Q1 Demand by State vs 2019 (%) (EIA, U.S Gov)
Democrat States -9.4%
Republican States -4.1%
Average -6.8%
Standard Deviation 5.8%
t-statistic (Dem/Rep) 3.610
p-value (Dem/Rep) 0.001

6. 2. Retail & Recreation Recovery
• Recovery in Q1 coincided with: lower “Covid fear”; additional government support; vaccine.1, 2, 3, 4, 7, 16
• Underlying consumer demand has been robust.17, 18, 19
• Retail & recreational travel diverged from store closures in March; pent-up demand.8, 20, 21
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7. 3. Travel to Public Spaces
• Characteristic seasonality in travel to public spaces (parks, beaches etc) remains intact. 1, 2, 3, 4, 7
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8. 4. Working From Home Evolution: I (Background)
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• ~40% of workforce can WFH. 5, 22, 23, 24,
• 23.7 % worked remotely in 2019, BUT only 10%
of hours worked.6
• Surveys imply ~ 8-11 % incremental WFH. 24, 25, 26
• ~60% implied WFH demand losses skewed to
small minority of workers.25

9. 4. Working From Home Evolution: II (Demand Impacts)
• Most incremental WFH driven by workplace closures, i.e mostly not personal choice.8, 16, 23
• WFH driven demand losses converged with workplace closures from January. 1, 2, 3, 4, 7, 8
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10. 4. Working From Home Evolution: III (Post-Covid)
Surveys overstating potential demand losses:
1. Non-exclusive WFH activity. 6
2. Asymmetries between employer and employee
expectations.7, 28
3. Long term career prospects impeded by WFH. 29
4. Distribution of implied WFH losses heavily
skewed to tiny minority of individuals. 25
5. Real-world data suggests majority of ongoing
demand losses due to closures. 1, 2, 3, 4, 7, 8
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11. PART II: Long Term Trends
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12. 5. Fuel Efficiency: Fleet Efficiency and VMTs
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• Divergence between Vehicle Miles Travelled (VMTs) and demand driven by efficiency gains. 30, 31, 32,
33, 34, 35, 36, 37

13. 5. Fuel Efficiency: 2022 Demand Comments
• From 2014-2019, ~400 kbd potential demand has been lost due to higher fleet efficiency. 1, 7, 30, 37,
38
• 2022 VMTs may have to increase by up to ~2-3 % vs 2019 to regain 2019 demand.7, 30, 31, 37, 38
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14. 6. EV infrastructure (Simulation): I
• 42 k public EV charge points but only 5 k are DC fast charging. 39
• Even if all public charge points were DC fast charging; public EV infrastructure would struggle
with more than 2 % EV market penetration.1, 7, 30, 39, 40, 41, 42, 43, 44, 45
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Poission Distribution Parameters
Market Share λ
1% 0.0167
2% 0.0334
3% 0.0501
4% 0.0669
5% 0.0836
Recharge Time μ
30 min μ30

15. 6. EV infrastructure (Simulation): II
• 1. Substantial infrastructure investment and/or 2. Modular batteries/super-fast charging
needed to overcome bottlenecks without undue reliance on home charging.1, 7, 30, 39, 40, 41, 42, 43, 44,
45
• However, even a significant improvement in charge time can still lead to long queues!7
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16. Part III: Market and Conclusion
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17. 7. Market & Conclusion: I
• Seasonal travel to public spaces has been robust and will persist.
• Retail and recreational travel activity likely to continue to recover.
• In the long term, it’s likely some demand losses due to WFH will persist but unlikely to be
substantial.
• Further efficiency gains in fleet are expected, which is likely to weigh on 2022 demand.
• Efficiency gains will likely be much more of a demand driver than EVs for next few years.
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18. 7. Market & Conclusion: II
• Contrast between summer and cal 22 RBBRs (RVO adjusted) partly reflects uncertainty
over long term demand prospects.
*prices as of COB 31st May 2021
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19. 8. Sources: I
June 2021
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1. EIA. (2021, April 30). Petroleum Supply Monthly. Retrieved from www.eia.gov: https://www.eia.gov/petroleum/supply/monthly/
2. Google. (2021, May 22). Community Mobility Reports. Retrieved from www.google.com: https://www.google.com/covid19/mobility/
3. NHTS. (2018, July). Summary of Travel Trends. Retrieved from nhts.ornl.gov: https://nhts.ornl.gov/assets/2017_nhts_summary_travel_trends.pdf
4. NHTS. (2021). Popular Vehicle Miles of Travel (VMT) Statistics. Retrieved from nhts.ornl.gov: https://nhts.ornl.gov/vehicle-miles
5. BLS. (2020, June 25). Table 6. Employed persons working... Retrieved from www.bls.gov: https://www.bls.gov/news.release/atus.t06.htm
6. BLS. (2019, May). National Occupation Profiles. Retrieved from www.bls.gov: https://www.bls.gov/oes/home.htm
7. BB Energy. (2021).
8. Opportunity Insights. (2021, May). Percent Change in Number of Small Businesses Open. Retrieved from tracktherecovery.org: https://tracktherecovery.org/
9. EIA. (2021, May 20). Prime Supplier Report. Retrieved from www.eia.gov: https://www.eia.gov/petroleum/marketing/prime/
10. CDC. (2021, May 24). United States COVID-19 Cases, Deaths, and Laboratory Testing (NAATs) by State, Territory, and Jurisdiction. Retrieved from covid.cdc.gov: https://covid.cdc.gov/covid-data-
tracker/#cases_casesper100klast7days
11. Guarino, B. (2020, November 8). New York’s block-by-block lockdowns are curbing covid-19. But residents aren’t pleased. Retrieved from www.washingtonpost.com:
https://www.washingtonpost.com/health/2020/11/08/nyc-covid-targeted-lockdowns/
12. Mandavilli, A. (2021, March 28). Cases in Florida, a national Covid bellwether, are rising — especially among younger people. Retrieved from www.nytimes.com:
https://www.nytimes.com/2021/03/28/world/Florida-variant-coronavirus.html
13. U.S Census. (2020). Understanding the U.S Population. Retrieved from www.census.gov: https://www.census.gov/content/dam/Census/programs-
surveys/sis/resources/2020/sis_2020map_stateside_K-6.pdf
14. U.S Gov. (2021). Historical Election Results. Retrieved from www.usa.gov: https://www.usa.gov/election-results
15. Allen, A. (2020, November 6). What Florida can teach New York about handling COVID. Retrieved from nypost.com: https://nypost.com/2020/11/06/what-florida-can-teach-new-york-about-
handling-covid/

20. 8. Sources: II
June 2021
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16. Gallup. (2021, May 13). Worry About Contracting COVID-19 Hits New Low in U.S. Retrieved from news.gallup.com: https://news.gallup.com/poll/349856/worry-contracting-covid-hits-new-low.aspx
17. U.S Census. (2021, April). Monthly Retail Trade. Retrieved from www.census.gov: https://www.census.gov/retail/index.html
18. BLS. (2021, May 26). Civilian unemployment rate. Retrieved from www.bls.gov: https://www.bls.gov/charts/employment-situation/civilian-unemployment-rate.htm
19. St Louis Fed. (2021, May). Personal Income. Retrieved from fred.stlouisfed.org: https://fred.stlouisfed.org/series/PI
20. NYCGO. (2021). Coronavirus Information and Resources. Retrieved from www.nycgo.com: https://www.nycgo.com/coronavirus-information-and-resources-for-travelers
21. John Woolfolk. (2021, May 22). What do California, Texas, New York and Florida have in common? Stunningly low infection rates. Retrieved from www.mercurynews.com:
https://www.mercurynews.com/2021/05/22/covid-what-do-california-texas-new-york-and-florida-have-in-common-stunningly-low-infection-rates/
22. Morgan Stanley. (2020, July 29). How "Work From Home" May work for investors. Retrieved from www.morganstanley.com: https://www.morganstanley.com/ideas/coronavirus-work-from-home-
trend
23. Pew Research. (2020, December 9). How the Coronavirus Outbreak Has – and Hasn’t – Changed the Way Americans Work. Retrieved from www.pewresearch.org:
https://www.pewresearch.org/social-trends/2020/12/09/how-the-coronavirus-outbreak-has-and-hasnt-changed-the-way-americans-work/
24. Wong, M. (2020, June 29). Stanford research provides a snapshot of a new working-from-home economy. Retrieved from https://news.stanford.edu/:
https://news.stanford.edu/2020/06/29/snapshot-new-working-home-economy/
25. Atlanta Fed. (2020, May 28). Firms Expect Working from Home to Triple. Retrieved from www.atlantafed.org: https://www.atlantafed.org/blogs/macroblog/2020/05/28/firms-expect-working-
from-home-to-triple
26. Gensler. (2020). U.S Work from Home Survey 2020. Retrieved from www.gensler.com: https://www.gensler.com/us-wfh-survey-2020-wfh-reinforces-the-benefits-of-the-office
27. Bureau of Labor Statistics. (2019, May). Occupational Employment StatisticsPRINT:Print. Retrieved from www.bls.go: https://www.bls.gov/oes/home.htm
28. PWC. (2021, January 12). PwC’s US Remote Work Survey. Retrieved from www.pwc.com: https://www.pwc.com/us/en/library/covid-19/us-remote-work-survey.html
29. NATIONAL BUREAU OF ECONOMIC RESEARCH. (2013, March). Does Working from Home Work? Evidence from a Chinese Experiment. Retrieved from www.nber.org:
https://www.nber.org/system/files/working_papers/w18871/w18871.pdf
30. FHWA. (2020, November). Annual Vehicle Distance Traveled in Miles and Related Data - 2019. Retrieved from www.fhwa.dot.gov:
https://www.fhwa.dot.gov/policyinformation/statistics/2019/vm1.cfm

21. 8. Sources: III
June 2021
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31. St Louis Fed. (2021, May 4). Motor Vehicle Retail Sales: Light Weight Trucks. Retrieved from fred.stlouisfed.org: https://fred.stlouisfed.org/series/LTRUCKNSA
32. Department of Transportation . (2012, October 15). 2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions. Retrieved from /one.nhtsa.gov:
https://one.nhtsa.gov/staticfiles/rulemaking/pdf/cafe/2017-25_CAFE_Final_Rule.pdf
33. EESI. (2012, August 2012). Fuel Economy Standards to Reach 54.5 MPG by 2025. Retrieved from www.eesi.org: https://www.eesi.org/articles/view/fuel-economy-standards-to-reach-54.5-mpg-by-
2025
34. EIA. (2021, May). Retrieved from www.eia.gov: https://www.eia.gov/energyexplained/gasoline/where-our-gasoline-comes-from.php
35. EPA. (2020, April 30). The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021–2026 Passenger Cars and Light Trucks . Retrieved from www.govinfo.gov:
https://www.govinfo.gov/content/pkg/FR-2020-04-30/pdf/2020-06967.pdf
36. Reuters. (2020, October 30). Factbox: What impact would a Biden presidency have on the auto industry? Retrieved from www.reuters.com: https://www.reuters.com/article/us-usa-election-autos-
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37. Elkind, E. N. (2020, May 18). Trump’s Flawed Rollback of Fuel Economy Rules. Retrieved from www.theregreview.org: https://www.theregreview.org/2020/05/18/elkind-trumps-flawed-rollback-of-
fuel-economy-rules/
38. Peterson, B. (2021, Jan 29). Car Ownership Statistics (2021 Report). Retrieved from www.valuepenguin.com: https://www.valuepenguin.com/auto-insurance/car-ownership-statistics
39. AFDC. (2021, February). Maps and Data - U.S. Alternative Fueling Stations by Fuel Type. Retrieved from afdc.energy.gov: https://afdc.energy.gov/data/
40. Hall, M. N. (2018, July). LESSONS LEARNED ON EARLY ELECTRIC VEHICLE FAST-CHARGING DEPLOYMENTS. Retrieved from theicct.org:
https://theicct.org/sites/default/files/publications/ZEV_fast_charging_white_paper_final.pdf
41. Ibisworld. (2020, October 24). Gas Stations with Convenience Stores in the US - Number of Businesses 2002–2026. Retrieved from www.ibisworld.com: https://www.ibisworld.com/industry-
statistics/number-of-businesses/gas-stations-with-convenience-stores-united-states/
42. NREL. (2014, November). Increasing Biofuel Deployment and Utilization through Development of Renewable Super Premium: Infrastructure Assessment. Retrieved from www.nrel.gov:
https://www.nrel.gov/docs/fy15osti/61684.pdf
43. Pod Point. (2021). cost-of-charging-electric-car. Retrieved from pod-point.com: https://pod-point.com/guides/driver/cost-of-charging-electric-car
44. tomtom. (2021). Retrieved from www.tomtom.com/: https://www.tomtom.com/en_gb/traffic-index/new-york-traffic/
45. API. (2021). Service Station FAQs. Retrieved from www.api.org: https://www.api.org/oil-and-natural-gas/consumer-information/consumer-resources/service-station-faqs