Feds: More Gulf Coast fuel needed to supply Northeast

Fuel Fix ^ | December 28, 2011 | Simone Sebastian

[thackney]

Larger shipments of gasoline and diesel from the Gulf Coast are needed to offset planned closures of three major refineries in the Northeast, according to a new federal report.

Northeastern states could experience “spot shortages with price hikes” for gasoline and other fuels as the region faces the idling of three critical refineries in Pennsylvania, the U.S. Energy Information Administration concluded in a recent report.

“The Gulf Coast is likely to be a significant alternate supplier,” the report notes, specifying the Colonial Pipeline as a main transport route.

“Even so, pipeline capacity will still be insufficient to make up the entire lost production volume,” the EIA forewarned.

Sunoco announced this month that it will idle operation of its Marcus Hook refinery in Pennsylvania. The announcement came two months after ConocoPhillips decided to take offline its Trainer, Pa. refinery and prepare the facilities, associated pipelines and terminals for sale.

If Sunoco moves forward with plans take its Philadelphia refinery offline, too, the nation’s populous Northeast region will lose half of its total refining capacity, according to the U.S. Energy Information Administration.

The impact on refining capacity and infrastructure could stress the regional supply of gasoline, jet fuel and ultra-low sulfur diesel, the EIA concluded in its report.

The U.S. refining industry, and Northeastern refiners in particular, are suffering from stagnating demand and competition from imports. Northeastern refineries supply 40 percent of the region’s gasoline needs, according to the EIA, with the rest coming from imports or piped in from the Gulf Coast.

As more Northeast refiners go offline — Philadelphia-based Sunoco, the region’s dominant refiner, has announced that it’s getting out of the refining business all together – the Gulf Coast will become and even more important supplier, the report noted.

The Colonial Pipeline, a main artery for transporting gasoline and other refined products from Texas up along the East Coast, is expanding its capacity in part to respond to closed refineries in the Northeast.

Additional supply could come from imports, beefed up production at remaining Northeast refiners and small rail shipments from Midwest refiners, the EIA said.

[thackney]

COLONIAL DIRECTORS APPROVE NEW EXPANSION OF MAIN GASOLINE LINE

http://www.colpipe.com/press_release/pr_114.asp

December 21, 2011

Additional 100,000 Barrels Per Day Slated to Be Available Early 2013

ATLANTA, Ga. – A significant expansion of Colonial’s main gasoline pipeline, originating in Houston and connecting Gulf Coast refineries with markets across Colonial’s system, has been approved by the company’s Board of Directors.

An estimated 100,000 barrels per day (BPD) of additional capacity will be added to Colonial’s Line 01 during the first quarter of 2013. Line 01 begins in Houston and terminates in Greensboro, N.C., from where shipments to the Northeastern U.S. are made.

The expansion represents approximately a 10 percent increase in Colonial’s overall gasoline delivery capacity, and is the third major capacity enhancement announced by Colonial in 2011. Previously announced were:

• A 100,000 BPD capacity increase to the mainline serving the Northeast was put into operation earlier this year. This line begins in Greensboro and serves the Philadelphia, New, Jersey and New York markets.

• A 75,000 BPD capacity increase to the distillate mainline is under way, with 20,000 BPD accomplished and 55,000 BPD due online by mid-2012. This line originates in Houston and terminates in Greensboro.

“These investments in our system and service improvements are right in line with what our customers have asked for in light of changing markets and increases in demand for deliveries by Colonial,” said Tim Felt, Colonial President and CEO.

“We talk with our customers every day and are working on additional plans and projects that will make Colonial more useful and more available to them,” Felt said.

Recent refinery closings in the Northeast have contributed to allocating space on Colonial mainlines, primarily between Houston and Greensboro. The announced and the completed expansions are intended to help alleviate this condition, as are additional projects still on the drawing board.

Colonial Pipeline consists of more than 5,500 miles of pipe and connects Gulf Coast refineries and with markets across the South and Eastern United States. Colonial safely transports refined petroleum products, including gasoline, diesel fuel, jet fuel, home heating oil and fuels for the U.S. military. For more information, visit www.colpipe.com.

[PGR88]

Is there a way to make these NE States pay excessively for it? NE libs should understand that there is a cost to their adherence to their green religion, unions, etc. etc..

[Born to Conserve]

Seems that PA taxes, unfunded mandates, and labor laws are a problem.

[yobid]

Imagine, if you will, WW III and OPEC (and other enemies)cut off all oil supply to the US. How long before we starve our “emergency” resources?

[109ACS]

Why don’t they just build more windmills?

(/sarc tag implied)

[RSmithOpt]

I do not understand why the blue, Zeewoe worshiping, EPA loving, union loving, NE states can’t install more solar panels, more windmills, and grow more corn for their energy needs? After all, they wanted change???

[maine yankee]

Why don’t they just build more windmills?

(/sarc tag implied)

---

Because they would cast a shadow over our solar panels. !!!

[phockthis]

sfl

[SnuffaBolshevik]

I was at the convenience store yesterday and the girl was out with the stick changing the gas price sign. Out of boredom, I checked out the before price ($3.15 for regular). Walked to the other side and it was $3.37! 22 cents in one fell swoop.

Talk radio was all abuzz as this increase was happening all over the place.

[thackney]

The Strategic Petroleum Reserve (SPR) currently has 695.9 million barrels of oil in inventory.

http://www.spr.doe.gov/dir/dir.html

Our OPEC imports have fallen to about 4 million barrels per day.

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRIMXX2&f=M

This is close to the maximum withdraw capacity of 4.4 million barrels per day of the SPR.

http://www.fe.doe.gov/programs/reserves/spr/spr-facts.html

So... about 174 days supply. But before that would run dry, you would see some other significant changes on the world oil market. Could OPEC really afford to give up a $2.8 Billion a week for nearly half a year? Would they try to sell to others freeing up other sources, say from Russia, Brazil, etc that would allow us more imports from other sources on a short term basis?

In my opinion, OPEC could not survive the $70 Billion required to wait us out.

In addition, we currently have over 200 million barrels in commercial storage scattered around the nation, much already at refineries.

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRSFUS1&f=M

[Former Proud Canadian]

So, there will be a shortage of petroleum for gulf coast refiners. However, they won't let the Keystone pipeline bring a new secure, uninterruptible supply from America's closest ally and trading partner. Makes you kind of wonder, doesn't it?

[bert]

The bumper sticker said......”Let the Yankee’s freeze, in the dark”

[Stalwart]

Thanks for posting this.

Price hike in gasoline, right up through liberal la-la land, and just before elections?

Refinery changeover causes a spring price increase, anyway. Adding this new dimension could really surge prices.

[Ditter]

I was just thinking about that bumpersticker but I remembered it as “LET THE BASTURDS FREEZE IN THE DARK!” (I guess you were just being polite):)

[Eric in the Ozarks]

$2.88/9 here in Missouri.

[Former Proud Canadian]

The POTUS could reduce gasoline prices tomorrow, if he wanted to. Easily. To wit:

1. Ok the Keystone XL pipeline.

2. End "boutique" blending of gasoline.

3. Announce that the energy department will expedite gas and oil drilling EVERYWHERE and the EPA will stand down.

If you really want to lower energy prices, he could take the following steps:

1. Announce that the government will backstop private industry to build a dozen nuclear plants in high energy demand areas. Some areas will get dual electricity/desalination plants.

2. Announce that the government will backstop private industry to build a pilot coal-to-oil plant.

Gee, if I could think of this, do you think anyone else has?

[bert]

Actually, I looked it up.

The majority of the sources said “Let the Yankee bastards freeze... in the dark” : )

[smokingfrog]

Where does the imported gasoline come from?

[Ditter]

LOL! So we were both right (and wrong):(