|SFrom 1990 to 2006, heavy sour crude imports from Latin
America (primarily Mexico and Venezuela) increased from less than 1 million
barrels per day to over 2.5 million barrels per day. U.S. Gulf Coast refineries became the
primary recipients of those import volumes.
|SMany bottoms conversion capacity projects were build in
PADD 3 refineries with coking capacity more than doubling from 565 thousand
barrels per calendar day (KB/CD) in 1990 to 1,255 KB/CD in 2006. Coking was 7.9 percent of distillation
capacity in 1990, and 15.2 percent in 2006.
|SCoking had come to be viewed as a high return capital
project in the Gulf Coast region with rising heavy crude supplyh and
increasing ligh-heavy crude prices differences. Before the recession, PADD 3 showed an
additional 272 KB/CD of planned coking capacity additions.
|SGulf Coast refiners had expected heavy crude from Canada
(dilbit) to exceed what could be refined in PADD 2 refiners, and to find a
home in PADD 3, replacing the declining Latin American heavy crude oils.
|SBut with falling demand, falling crude oil prices, and
carbon emission concerns, forecasts of future Canadian oil sands production
have declined, as have expectations of likely volumes to reach the Gulf Coast
any time soon.