U.S. Refiners Supply Domestic Demand While Significantly Increasing Exports
We first created the graphic below, illustrating the flow of petroleum products in and out of the U.S. by PADD for the year, for a talk at a conference a few years ago. One of our friends who attended that conference asked for an update, so today we’re offering just that!
As the figure shows, the U.S. was a net exporter of gasoline and distillates in 2018. The red gasoline (G) arrows represent flows for gasoline, motor gasoline blending components, and fuel ethanol. The green diesel (D) arrows represent flows for biomass-based diesel (biodiesel), renewable diesel, distillate fuel oil (diesel fuel and heating oil), and jet fuel. The data and PADD map are provided by the U.S. Energy Information Administration (EIA).
On the East Coast (PADD 1) gasoline imports were 571 thousand barrels per day (kbd), while distillate imports were 147 kbd. The East Coast sees large consumption of gasoline and diesel with relatively low refining capacity and constrained logistics. The pipelines running from the Gulf Coast through the Southeast to New York Harbor are full. Cheap movement of incremental refined product supply is not available. While suppliers could ship refined products via tanker up to the Northeast, coastwise compliant shipping under the Jones Act is expensive. It is more economical to import refined products to PADD 1 via tanker. Most refined product imports to the East Coast come from Europe.
The Midwest (PADD 2) exported minor volumes of gasoline, 13 kbd, and imported minor volumes of diesel, 2 kbd, to and from Canada. The Rocky Mountain region (PADD 4) imports small volumes of gasoline and distillate from Canada as well.
The West Coast (PADD 5) exported 46 kbd of gasoline and 34 kbd of distillates.
The Gulf Coast has the largest refining center in the country and has seen a number of refinery expansions in recent years. Gasoline exports from PADD 3 were 890 kbd and distillate exports were over 1,333 kbd. Most of PADD 3 and PADD 5 exports go to Mexico and Central and South America. According to the EIA, Mexico receives 25% of U.S. distillate exports and 55% of U.S. motor gasoline exports.
In 2014, when we first created this import/export graphic, gasoline net exports were 8 kbd and distillates were 969 kbd. In four years, the net exports of gasoline have grown by 368 kbd and distillates by 247 kbd. The refining industry has continued to supply the growing U.S. demand for transportation fuels at the same time.