U.S. Energy Information Administration - EIA - Independent Statistics and Analysis
Analysis & Projections
Refinery Outages: Fall 2014
Release date: November 19, 2014
Revised: November 20, 2014 (revision)
This report examines refinery outages planned for Fall 2014 and the potential implications for available refinery capacity, petroleum product markets and supply of gasoline and middle distillate fuel oil (diesel, jet fuel, and heating oil). EIA believes that dissemination of such analyses can be beneficial to market participants who may otherwise be unable to access such information.
Refinery outages result from the planned shutdown of refinery units for maintenance and upgrades and from unplanned shutdowns that result from a variety of causes, e.g. mechanical failure, weather, power failures, fire, and flooding. Planned maintenance is typically scheduled when refined petroleum product consumption is low, i.e., in the fall and in the first quarter when there is less demand for transportation fuels.
Like prior semiannual refinery outage reports, this report analyzes the adequacy of available refinery capacity to produce middle distillate (diesel, jet fuel, and heating oil) and gasoline focusing on two refinery units, the crude distillation unit (CDU) and the fluid catalytic cracking unit (FCCU), that are most strongly correlated with distillate and gasoline production, respectively. However, this issue of the report uses a different analytical approach and format.
The impact of both planned and unplanned refinery outages on product supplies in Fall 2014 depends on many factors, including petroleum product demand, the availability of product supplies from available refinery capacity, inventories, imports and redirected exports, as well as actual levels of both planned and unplanned refinery outages.
Distillate demand in the United States has been strong in 2014, up 197,000 barrels per day (bbl/d) day year-over-year during the first eight months. Some of this increase resulted from colder-than-normal temperatures during the winter heating season. However, year-over-year growth continued through the summer months. EIA expects distillate consumption to grow by 115,000 bbl/d for full-year 2014, and an additional 93,000 bbl/d in 2015. As is always the case, increased demand from colder-than-normal winter temperatures could cause distillate prices to increase in the coming months.
U.S. gasoline demand typically declines in the fourth quarter as peak driving season ends. EIA expects gasoline consumption to average 10,000 bbl/d higher in 2014 than in 2013, but 20,000 bbl/d lower in 2015 as improving fuel economy in new vehicles offsets growth in highway miles traveled.
This issue of the report considers the supply of distillate fuel and gasoline supply on a regional, PADD and sub-PADD, level rather than a national level. National balances have very limited meaning for the adequacy of distillate fuel and gasoline supply because pipeline infrastructure, geography and marine shipping regulations constrain the amount of product that can flow among the different regions of the United States.
Across the different regions of the country, Fall 2014 planned refinery maintenance was concentrated in September and October and many refineries have returned to or are in the process of returning to normal operations. Less maintenance is planned for November and there is no maintenance planned for December.
Table 1 provides a by-PADD by-month summary of the percentage of available refining capacity expected to be out of service for maintenance during Fall 2014. Barring unusually high unplanned outages, planned outages that extend beyond the planned time frame and higher-than-expected demand, Fall 2014 gasoline and distillate fuel supply should be adequate.
|East Coast (PADD 1)||0%||0%||0%||0%||0%||0%|
|Midwest (PADD 2)||1%||5%||3%||9%||20%||7%|
|Gulf Coast (PADD 3)||2%||5%||2%||10%||4%||0%|
|Rocky Mountains (PADD 4)||1%||7%||0%||2%||10%||0%|
|West Coast (PADD 5)||1%||0%||0%||0%||0%||0%|
Source: Industrial Info Resources (IIR), September 24, 2014 database.
In most regions, planned maintenance has been light compared to last year as well as to historical levels. However, in the Midwest, 9% of FCCU capacity was offline for maintenance in September and 20% was offline in October. This resulted in below-average gasoline stocks in September and October, which proved problematic in parts of the Midwest when unexpected outages in the Upper Midwest and the Eastern Great Lakes region further reduced gasoline supply. Midwest distillate fuel supplies were also affected by the unplanned outages. While Midwest refineries supply most of the distillate fuel and gasoline that is consumed in the region, the Midwest also receives products from the Gulf Coast, including supplemental supply during disruptions, as was the case in October.
FCCU maintenance in the Rocky Mountain region (PADD 4) was also significant during October. PADD 4 refineries produce much of the distillate fuel and gasoline that is consumed in the region, but the region is also supplied with product from PADD 2 as well as from Canada. During periods of tight supply, additional product can be made available to PADD 4 from these other regions. Seven percent of the region's CDU capacity was also offline in October. However, PADD 4 distillate stocks are substantially above the five-year average level and supply should be adequate.
In the Gulf Coast region (PADD 3), which is the largest refining center in the United States and home to just over half of U.S. capacity, planned Fall 2014 CDU maintenance was concentrated in October when 5% of regional CDU capacity was offline. Fall 2014 FCCU planned maintenance peaked in September at 10% of regional capacity. Supply of distillate and gasoline remained adequate during this period, although the change in gasoline RVP specification did cause some transient market imbalances.
With substantially more refining capacity than is needed to meet in-region gasoline and distillate demand, PADD 3 refineries are important sources of supply for other U.S. regions, notably PADD 1, PADD 2 and to a lesser extent PADD 5. The region also supplies international markets. Exports of gasoline from PADD 3, which have averaged 443,000 bbl/d for 2014 (through August), can in some instances be diverted to domestic use, providing an important source of additional supply to meet both in-region and neighboring region supply shortfalls.
Summary findings for each region of the country (PADD) are provided in the next section. A discussion of current market conditions and more detailed discussions of each region's supply profile and Fall 2014 planned refinery maintenance are provided in subsequent sections.