U.S. operable atmospheric crude distillation (CDU) capacity increased by 0.2% in 2014, reaching 18.0 million barrels per calendar day (b/d) according to EIA's recently released annual Refinery Capacity Report (Figure 1). This was the second consecutive year of modest capacity growth following the 2.9% increase in 2012 that resulted from the restart of East Coast refineries that had closed in 2011. The capacities of secondary units that support heavy crude processing and production of ultra-low sulfur diesel and gasoline, including thermal cracking (coking), catalytic hydrocracking, and hydrotreating/desulfurization, also increased.
The refinery capacity reported for the start of 2015 includes expansions that were operable on January 1, but not necessarily operating. Capacity for those projects is listed as idle. Dakota Prairie Refining recently completed construction of one of the few new refineries built in the U.S. over the last 30 years. This simple refinery, which is located in western North Dakota, has CDU capacity of 19,000 b/d and will run locally produced crude oil to make diesel fuel. Earlier this year, Kinder Morgan added a 42,000 b/d condensate splitter to its Galena Park, Texas crude oil terminal that is also included in the capacity estimate for the start of 2015. A second unit, with similar capacity, is expected to start operating this summer, but is not included in the January 1, 2015 capacity estimate.
Increased refinery runs—based on increases in both capacity and
utilization—have helped accommodate increases in U.S. crude oil production. U.S. crude oil production averaged 8.7 million b/d in 2014, 3.2 million barrels higher than in 2010. Gross inputs to refineries averaged a record 16.1 million b/d in 2014 compared with 15.1 million b/d in 2010. Operable refinery capacity increased 0.3 million b/d and utilization increased 4 percentage points compared with 2010, resulting in the 1.0 million b/d increase in gross inputs. Over the same period, crude imports decreased by 1.9 million b/d (Figure 2) and crude exports increased by 0.3 million b/d.
The report also includes information on expansions planned for the balance of the year. Capacity is expected to expand by an additional 119,000 barrels per stream day later in 2015. Delek US plans to increase CDU capacity by 10,000 b/d at its Tyler, Texas refinery and Marathon reported that it plans to add 35,000 b/d of condensate splitter capacity at its Catlettsburg, Kentucky refinery by the end of the year. Further investment in refinery expansion projects will depend on expectations about crude oil price spreads and the relative economic advantage of the U.S. refining fleet compared with refineries in the rest of the world.
EIA's Refinery Capacity Report and the discussion in this article measure refinery capacity in barrels per calendar day and barrels per stream day. Barrels per calendar day is a measure of the amount of input that a distillation unit can process in a 24-hour period under usual operating conditions. It takes into account both planned and unplanned maintenance. Barrels per stream day, another measure of refinery capacity, is the maximum number of barrels of input that a distillation facility can process within a 24-hour period when running at full capacity under optimal crude and product slate conditions with no allowance for downtime. Stream day capacity is typically about 6% higher than calendar day capacity.
U.S. average retail gasoline and diesel fuel prices decrease
The U.S. average retail price of regular gasoline decreased two cents from last week to $2.81 per gallon as of June 22, 2015, 89 cents per gallon lower than the same time last year. Only the Rocky Mountain price increased, rising less than a penny to remain $2.79 per gallon. The Midwest price was down five cents to $2.74 per gallon. The Gulf Coast price decreased two cents to $2.57 per gallon, and the East Coast price was down one cent to $2.73 per gallon. The West Coast price decreased less than a penny to remain $3.33 per gallon.
The U.S. average price for diesel fuel decreased one cent from the prior week to $2.86 per gallon, down $1.06 per gallon from the same time last year. The Gulf Coast price was down two cents to $2.76 per gallon. The East Coast, Midwest, and Rocky Mountain prices were each down one cent, to $2.96 per gallon, $2.75 per gallon, and $2.80 per gallon, respectively. The West Coast price declined less than one cent to remain $3.10 per gallon.
Propane inventories gain
U.S. propane stocks increased by 1.3 million barrels last week to 82.0 million barrels as of June 19, 2015, 28.3 million barrels (52.7%) higher than a year ago. Gulf Coast inventories increased by 0.7 million barrels and Midwest inventories increased by 0.5 million barrels. East Coast and Rocky Mountain/West Coast inventories both remained unchanged. Propylene non-fuel-use inventories represented 6.4% of total propane inventories.