It may not rival the seasonal excitement many students have about the last day of the school year, but petroleum analysts eagerly anticipate each year's release of the U.S. Energy Information Administration's (EIA) Refinery Capacity Report, detailing information about every refinery in the United States. U.S. refining capacity fluctuates, expanding or contracting as market conditions vary, reflecting shifts in consumption patterns and changes in product specifications. Corporate ownership of refineries changes as well, and some facilities have changed hands multiple times. In 2012, refinery expansions, restarts, sales, and closures affected total refinery capacity, and there have been additional changes so far this year, as discussed below. Further changes may occur before the end of 2013, as market conditions evolve.
As of January 1, 2013, the United States had 139 operating refineries and 4 idle refineries with total atmospheric crude oil distillation capacity of 17.8 million barrels per calendar day (bbl/d), an increase of 501,000 bbl/d from January 1, 2012. A refinery is classified as idle when the atmospheric crude oil distillation unit (ACDU) is not in operation and not under active repair, but is capable of being placed in operation within 30 days; or when the ACDU is not in operation, but is under active repair that can be completed within 90 days. A refinery may be idle for any number of reasons including routine maintenance, unplanned maintenance, or shutdown due to market conditions.
The increase in capacity as of January 1, 2013 versus the prior year is mostly due to Motiva's expansion of its Port Arthur, Texas refinery and the restart of the Trainer, Pennsylvania refinery formerly owned by Phillips 66 and now owned by Monroe Energy, a subsidiary of Delta Air Lines. Motiva is a joint venture between subsidiaries of Royal Dutch Shell and Saudi Aramco. The Port Arthur facility's ACDU capacity increased from 285,000 bbl/d at the start of 2012 to 600,250 bbl/d at the start of 2013, and is now the largest refinery in the United States.
While the latest Refinery Capacity Report presents a snapshot of the refinery sector at the start of the year, EIA continues to track additional expansions that have been completed or announced and additional ownership changes that have occurred, changing the rankings of the largest refiners (Table 1). BP sold two refineries in 2013 in Texas City, Texas, and Carson, California. In February, Marathon Petroleum Corp. completed the purchase of the Texas City refinery and is now the third largest refiner in the United States. In June, Tesoro completed the acquisition of BP's Carson refinery. Tesoro has also announced the sale of its Ewa Beach (Kapolei), Hawaii refinery to Par Petroleum Corp. In addition to the sales of Texas City and Carson, BP has a project underway to increase the heavy crude oil processing capability of its Whiting, Indiana, refinery. The project will expand coking capacity to 102,000 bbl/d, and add a hydrotreater. Northern Tier Energy expanded its St. Paul Park, Minnesota, refinery in May.
With its purchase of the Carson refinery, Tesoro has become the largest refiner on the West Coast (Table 2). The concentration of refinery ownership in other regions is mostly unchanged from last year (Table 3).
Crude distillation capacity is one of the most widely tracked indicators of refinery size; however, the capacity of other secondary units is a key indicator as well. Expansion of secondary unit capacity can follow a different pattern over time, as refiners invest in the specific types of capacity needed to support changing crude and product qualities. In 2012, vacuum distillation, thermal cracking, catalytic hydrocracking, catalytic reforming, and hydrotreating capacity all increased, due to unit restarts and expansions, while catalytic cracking capacity was unchanged, and deasphalting capacity decreased. In 2013, secondary unit capacity expansion continues as companies work to maximize the production of ultra-low-sulfur diesel.
Gasoline and diesel fuel prices both decrease again
The U.S. average retail price of regular gasoline decreased five cents to $3.58 per gallon as of June 24, 2013, up 14 cents from last year at this time. The Midwest price dropped 19 cents from last week to $3.55 per gallon, down 32 cents over the last two weeks. The Rocky Mountain price is lower by two cents at $3.67 per gallon. Prices on the East and Gulf Coasts both decreased by less than a penny, to remain at $3.50 and $3.38 per gallon, respectively. Rounding out the regions, the West Coast price is $3.95 per gallon, up six cents from last week.
The national average diesel fuel price decreased less than one cent to remain at $3.84 per gallon, 16 cents higher than last year at this time, but the lowest price since July 30, 2012. The East Coast price increased less than a penny to remain at $3.84 per gallon. The Gulf Coast price is $3.74 per gallon, down less than one cent from last week. The Midwest and Rocky Mountain prices both fell one cent, to $3.85 and $3.84 per gallon, respectively. Rounding out the regions, the West Coast price is up one cent to $3.96 per gallon.