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Do we have enough oil refineries? Enough refining capacity? The answers often depend not only on whom you
ask but when.
springtime when refineries are wrestling with annual maintenance checks and
balances and the often bumpy transition from ‘winter-blend’ to ‘summer-blend’ that boils our blood... many
of us may be inclined to say
that a few more refineries might ease bottlenecks and price spikes particularly
in some regions where fuel supply logistics and options are nonexistent or extremely limited.
(Sure, build those refineries, they’ll
say… almost anywhere, except the Gulf Coast that already has nearly 50% of the
nation’s refining capacity.) What do you say?
On the other hand, if you ask these questions in
October or November when most states see substantial declines in gas prices
from mid-summer levels, you might hear that’s not needed now; it’s a problem
that’s under control.
The Energy Information Administration (EIA) last
week released its ‘Refinery Capacity Report’ which surveys refinery ownership
and capacity at the start of each year.
Most notable is the fact that U.S. refineries
continue to increase capacity, even as domestic consumption of gasoline is
projected to show consistent decline.
As of January 1, 2014, there were 139 operating refineries and 3 others
currently idle with a total capacity of 17.9 million barrels per day.
In 2000 we had 159 refineries operating with
capacity at 16 million bpd. And in 1990,
believe it or not, we had 205 refineries in operation, at capacity of 15.1
million bpd. Hard to believe but
apparently, the 139 refineries we have now are easily meeting current demand
for domestic needs as well as exports of petroleum products other than crude
oil and gasoline.
The current refining leaders ranking first, second
and third are Valero Energy, ExxonMobil and Marathon Petroleum. Philips 66 and Motiva rank fourth and fifth,
and combined, according to Downstreamtoday.com, these five companies own 45
percent of U.S. refining capacity.
Believe it or not, some refineries are looking to increase their production of
distillates such as ultra low-sulfur diesel and decrease gasoline, reflecting
emerging trends in domestic and international demand. But, while domestic gasoline demand appears tame,
if not flat… keep an eye on ‘millennials.’ Trend watchers say their apparent indifference to automobiles is more a lifestyle fit
than a deeply held position and for that reason it’s likely to change; perhaps
quickly, once they find spouses and children arrive.
Where do you think we're headed nationwide? Toward a long-term reduction in gasoline consumption or perhaps an increase?