Skip to comments.Feds: More Gulf Coast fuel needed to supply Northeast
Posted on 12/28/2011 6:13:39 AM PST by 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 nations 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 regions 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 regions dominant refiner, has announced that its 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.
December 21, 2011
Additional 100,000 Barrels Per Day Slated to Be Available Early 2013
ATLANTA, Ga. A significant expansion of Colonials main gasoline pipeline, originating in Houston and connecting Gulf Coast refineries with markets across Colonials system, has been approved by the companys Board of Directors.
An estimated 100,000 barrels per day (BPD) of additional capacity will be added to Colonials 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 Colonials 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.
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..
Seems that PA taxes, unfunded mandates, and labor laws are a problem.
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?
Why don’t they just build more windmills?
(/sarc tag implied)
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???
Why dont they just build more windmills?
(/sarc tag implied)
Talk radio was all abuzz as this increase was happening all over the place.
The Strategic Petroleum Reserve (SPR) currently has 695.9 million barrels of oil in inventory.
Our OPEC imports have fallen to about 4 million barrels per day.
This is close to the maximum withdraw capacity of 4.4 million barrels per day of the SPR.
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.
The bumper sticker said......”Let the Yankee’s freeze, in the dark”
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.
$2.88/9 here in Missouri.
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?
Actually, I looked it up.
The majority of the sources said “Let the Yankee bastards freeze... in the dark” : )
Where does the imported gasoline come from?
LOL! So we were both right (and wrong):(
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