Crude oil production on the West Coast has been declining, particularly in Alaska and California. As a result, crude oil supply patterns to West Coast refineries have been changing.
Currently, no major pipelines move crude to the West Coast from east of the Rockies. Meanwhile, marine transport to the West Coast involves a lengthy and expensive trip from the US Gulf Coast through the Panama Canal.
However, crude by rail is becoming a viable alternative and infrastructure on the West Coast has been expanding. Energy Information Administration (EIA) data reveals that there is a growing supply of crude to PADD 5 that is not explicitly accounted for by production, imports, or other transfers. This unaccounted for crude is likely crude oil delivered via railroad to refineries on the West Coast.
Before 2012, data shows a slight unaccounted for supply, approximately – 20 000 bpd (overestimation) to 70 000 (underestimation) bpd. Underestimation of supply can be interpreted as domestically produced crude oil shipped to PADD 5 from other PADDs via modes of transport not included in EIA surveys, mainly railroad and truck.
From 2012 onwards, underestimated crude supply began to increase significantly, reaching more than 100 000 bpd in early 2013. This unaccounted for supply is likely crude delivered by rail.
Trade press reports are in accord with this view. The refining centre in Washington state, the closest destination for both Canadian and Bakken crudes, is where most of the refineries have built or are in the process of building rail unloading facilities.
Tesoro, the largest refiner on the West Coast, opened a 40 000 bpd crude by rail unloading facility at its Anacortes, Washington, refinery complex in 2012. Tesoro is also in the process of securing approval for a 120 000 bpd rail to barge terminal in Vancouver, Washington.
Alon USA Energy and Valero are in the process of expanding facilities and securing approval to build new crude by rail unloading facilities at their California refineries.
Additionally, merchant terminal operator, such as Westway Terminals, NuStar Energy, and Plains All American, are investing in new rail to barge and rail unloading facilities. Global Partners LP, a midstream energy logistics and marketing company, recently purchased an existing petroleum products terminal in Portland, Oregon, that is linked via rail to Global owned crude by rail loading facilities in North Dakota.
Background information: PADD 5 refining
There are 3 major refining centers in PADD 5: Washington state, San Francisco, and Los Angeles. Alaska and California production is traditionally transported by marine vessel and pipeline, respectively, to refineries. However, production in both states has declined in recent decades.
In 2012, PADD 5 production was equal to 48% of crude runs at the region’s refineries, downs from 59% in 2005. As PADD 5 production decreased, waterborne imports of crude have increased.
In 2012, imports were 51% of total PADD 5 crude supply, an increase from 40% in 2005.
Adapted from a press release by Emma McAleavey.
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/15082013/new_traffic_patterns_emerge_to_supply_crude_to_west_coast563/