Total US crude oil production increased by almost 3.2 million bpd between 2010 and 2014, however production in the West Coast region (PADD 5) fell by 0.1 million bpd, continuing a long term decline. With no major crude oil pipelines connecting the region to other parts of the country, refineries on the West Coast adjusted to the declining in region production by increasing imports of foreign crude oil, hitting an average of 1.1 million bpd over the last five years. Shipments of domestic crude by rail (CBR) to the West Coast have also increased, from an average of 23 000 bpd in 2012 to 157 000 bpd in 2014. In the first quarter of this year, West Coast CBR movements averaged 191 000 bpd.
Bakken crude oil production from the Midwest (PADD 2) is the main source of rail shipments to the West Coast (PADD 5), accounting for almost 90% of West Coast crude by rail receipts last year. Relatively small shipments from other domestic regions have also increased. Shipments from the Gulf Coast (PADD 3) tripled between 2013 and 2014, and Rocky Mountain (PADD 4) shipments quintupled. These increases in crude by rail movements occurred only after West Coast crude by rail unloading was significantly expanded however.
Crude by rail is moved to unloading facilities at refineries in Washington and terminals in California, Washington and Oregon. Coast wise compliant vessels and pipelines then transport the oil to refineries without crude by rail unloading facilities.
In California, regulatory and permitting problems have led to delays in construction of some oil unloading facilities and forced the closure of operations at others. Despite permitting delays, refineries in California receive some domestic crude oil by rail from other PADDs. California Energy Commission (CEC) data has indicated that California receives crude by rail from Rock Mountain states, specifically Utah and Wyoming.
Future increases in shipments of crude oil by rail to West Coast refineries will depend on the economic viability of crude by rail versus imported crude oil, the type of crude oil refineries are able to process, and the regulatory outcomes for new or existing crude by rail facilities.
Edited from press release by Claira Lloyd
Read the article online at: https://www.hydrocarbonengineering.com/refining/09062015/crude-by-rail-padd-5/