Recent requests for a waiver on the Renewable Fuels Standard, sought because of the drought and potential effects on the 2012 corn crop and price, would have little effect on blended fuel prices or diesel, he says.

“In the short run, gas will remain in the upper one-half of the five-year range for this time of year. Diesel will remain in the lower half of the five year range for this time of year.”

Consumption is down over the last few years, he says, because people are driving less and cars are averaging more miles per gallon. Exports are also higher.

Refineries are also retooling to produce “relatively more diesel and relatively less gasoline,” he says. “Diesel prices remain high compared to gas, but we expect no high gas spike.”

Wholesale gasoline prices should range from $2.50 to just under $3 a gallon, he says, with diesel from just above to just below $3 a gallon.

Long-term, crude oil extraction will remain a key component of petroleum price. “Risks are really high for crude oil extraction,” Bryant says. “The easy stuff is gone — now it’s deep, offshore, Alaska, etc., and with a steadily increasing cost of extraction.”

For proven reserves, he says, chances of recovery are 90 percent “under current economic, political and technological conditions.” For probable reserves, the chance of recovery falls to 50 percent, and for possible reserves, it’s 10 percent. 

“Possible reserves are so risky because of geological uncertainty, expense and susceptibility to reserve infill.” Recovering possible reserves, Bryant says, likely will demand improvements in technology.

The natural gas outlook is better. Isaac caused a temporary “shut-in of 4.7 percent,” but no damage to infrastructure. “It is coming back on line rapidly,” Bryant says. “And Isaac occurred during a period of relatively high stocks.”

Shale gas is making a significant contribution to increased natural gas supplies and lower prices, he notes. “Long term, there is a lot of shale gas, and prices should remain low.”

Natural gas is “increasingly used to produce electricity,” keeping cost increasing at a slow pace. “With natural gas, power plants can satisfy peak loads and can turn it on and off quickly.” Coal stocks are also “substantial; a lot is available — and electricity still uses a lot of coal.”

The last three years have put some stress on energy, with the “three hottest summers in decades. Last winter was generally warmer, but some months were warm and some were not.”  The rate of price increase for residential electricity has dropped to 1 percent to 2 percent over the past few years, Bryant says, and he anticipates about a 1 percent rate of increase going forward.