Posted on 09/09/2014 7:12:27 AM PDT by thackney
The Gulf Coast is driving a surge in U.S. exports of petroleum products as refineries run at near-record levels, according to recent reports.
In June, the United States on average exported 3.7 million barrels per day of gasoline, distillate, jet fuel, petroleum coke and hydrocarbon gas liquids, according to the most recent data available. That’s an increase of 17 percent, or 543,000 barrels per day, from the same time last year, the Energy Information Administration said in a newly released analysis.
Nearly three-quarters of that growth came from the Gulf Coast, where refineries remain “extremely competitive” against their global counterparts because of the region’s access to lower-cost crude oil and fuel, the administration reported.
“Refiners are in the catbird seat,” said Sandy Fielden, managing director of Houston-based energy analysts RBN Energy. “They are running their refineries as fast as their little legs can run.”
Crude oil production in the six-state region that includes the Gulf Coast has spiked 57 percent to 5.2 million barrels per day in three years thanks to two of the nation’s biggest shale basins — the Eagle Ford in South Texas and the Permian in West Texas and New Mexico, according to a recent report by Fielden.
“The fact is that unless an alternative release valve such as a relaxation of export regulations or increase in refinery processing capacity comes along, Gulf Coast crude production is on a crash course to exceed refinery capacity to process it,” Fielden wrote in a report released Sunday.
The influx of new oil has reduced the region’s dependence on foreign light crude, Fielden reported. Imports dwindled from 1.9 million barrels per day three years ago to 400,000 barrels per day in June, according to his report.
But the Gulf Coast continues to import heavy crude, primarily from Venezuela and Mexico, because it’s a better fit for the region’s refineries. Refiners, mostly on the Gulf Coast, have been scrambling to figure out how to process domestic crude that’s lighter grade than the hydrocarbons typically imported from overseas, but they are primarily spending money on smaller projects to retrofit, upgrade or expand existing facilities.
“If you’re a refiner, you’re not willing to spend a huge amount of money on that issue because the moment you start spending, the regulations on exports could change,” Fielden said.
Related: Gulf Coast to benefit from refinery retrofits
Crude production is expected to continue to trend upward in the next year to 18 months, and without a way to export it or process it, the United States may see a significant dip in prices, Fielden said.
By mid-2014, the Gulf Coast was exporting 900,000 barrels per day of distillate, almost exclusively to the Atlantic Basin market, and 500,000 barrels of gasoline per day, mostly to Mexico and Central and South America, according to the EIA report.
Federal law generally bans crude oil exports, with some exceptions including oil sent to Canada. And while the volumes remain small, the Gulf Coast reported dramatic increases in the amount of crude oil sent by boat to Canada – from 3,000 barrels per day in 2013 to 168,000 barrels per day in mid-2014, according to Fielden’s report .
While the Gulf Coast continues to lead the U.S. export boom, the East Coast remains reliant on imports to meet demand. A colder-than-usual winter led the region to import 217,000 barrels per day of distillate in the first half of 2014, nearly three times as much compared to the same period last year, according to the EIA.
The EIA said that “substantial volumes” of that distillate and gasoline came from the Gulf Coast, but pipeline capacity and marine shipping constraints continue to limit how much Gulf Coast product can be sent to the East Coast.
U.S. petroleum product exports continue to rise {This Week In Petroleum}
http://www.freerepublic.com/focus/f-news/3200785/posts
Posted on 9/5/2014
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Note: in the article:
Refiners, mostly on the Gulf Coast, have been scrambling to figure out how to process domestic crude that’s lighter grade than the hydrocarbons typically imported from overseas
That is misleading. They know how to process it. They are trying to figure out the most economical way to proceed. They already spent billions of dollars upgrading the refineries to efficiently process cheaper heavy oil that is mostly imported. Spending billions more to use more expensive oil doesn't make a lot of sense, but the oil export ban is creating a problem with the increased production of lighter oils.
If we only had a federal administration willing to support the Gulf Coast’s efforts, our economy would be absolutely exploding. We are absolutely hamstrung by bureaucracy, party politics and environmental nutjobs.
“If you’re a refiner, you’re not willing to spend a huge amount of money on that issue because the moment you start spending, the regulations on exports could change,” Fielden said. “
And there it is.
A few that are close to the Eagle Ford have made some changes already, but not on a large scale that I have found. Corpus Christi and Three Rivers are taking more light Eagle Ford Oil.
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