The world is full of paradoxes and apparent contradictions, like the phrase “this page intentionally left blank” on an otherwise empty page in a government report, and the energy sector is no different. The U.S. is the world’s largest exporter of the “Big 3” petroleum products — gasoline, diesel/gasoil and jet fuel/kerosene — but it still imports significant volumes of those very same products. That paradox, which is not unlike the U.S.’s need to both export and import various grades of crude oil, is tied to a mismatch between where the product is produced and where it is consumed. In today’s RBN blog, we look at the factors that contribute to that mismatch and what it means for U.S. “Big 3” production and exports going forward.
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Let’s begin with the basics. PADD 3, which is primarily composed of the Gulf Coast states, is long all of the “Big 3” products (to the tune of 5.8 MMb/d in 2022) and accounts for the lion’s share of U.S. product exports (gray layer in right graph in Figure 1). In turn, PADD 1 (East Coast) accounts for about three-quarters of U.S. product imports (dark-blue layer in left graph). Those imports are needed because PADD 3 movements to PADD 1 are limited by pipeline capacity, and the two major pipelines traveling from the Gulf Coast to the East Coast (Colonial and the former Plantation Pipeline, now called the Products Pipeline) are generally full, which leaves PADD 1 in need of barrels. Overall, PADD 1 brought in about 3.8 MMb/d of gasoline, diesel and jet fuel in 2022 — most of it by pipe from PADD 3, with smaller volumes sourced from PADD 2 (Midwest) and via imports.
Another contributor to the export/import paradox is the Jones Act, which requires all waterborne freight movements within the U.S. to be carried on U.S.-built, -flagged and -crewed vessels. (We’ve written a lot about the Jones Act and its impact over the years, most recently in 2020’s Time Will Tell). Instead of moving products from PADD 3 to PADD 1 by ship, the Jones Act makes it less expensive for PADD 3 to export incremental products and for PADD 1 to import products, primarily from Europe and Canada.
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About the song
“Walking Contradiction” was written by Billy Joe Armstrong, Mike Dirnt and Tré Cool and appears as the 14th song on Green Day’s fourth studio album, Insomniac. The song was released as a promotional single in August 1996 and reached #21 on the Billboard Alternative Airplay and #25 on the Billboard Mainstream Rock Singles charts. The video for the song, directed by Roman Coppola, featured car crashes, explosions, a building collapse, and general pandemonium. It received a Grammy nomination in 1997. Personnel on the record were: Billy Joe Armstrong (lead vocals, guitar), Mike Dirnt (bass, backing vocals) and Tré Cool (drums).
Insomniac was recorded between December 1994 and May 1995 at Hyde Street Studios in San Francisco, with Rob Cavallo and Green Day sharing production duties. The album was released in October 1995 and went to #2 on the Billboard 200 Albums chart. It has been certified 2x Platinum by the Recording Industry Association of America. Five singles were released from the LP.
Green Day is an American punk rock band formed in the East Bay region of San Francisco in 1987 by Billy Joe Armstrong, Mike Dirnt and John Kiffmeyer (who was replaced by Tré Cool in 1990). They have released 13 studio albums, four live albums, one soundtrack album, four compilation albums, 11 EPs and 43 singles and have sold more than 90 million records worldwide. Green Day has won three American Music Awards, two ASCAP Awards, two Brit Awards, five Grammy Awards and 11 MTV Video Music Awards. They were inducted into the Rock and Roll Hall of Fame in April 2015. A one-act musical of their album, American Idiot, ran on Broadway in 2010. Seven members have passed through the group since its formation. They continue to record and tour.
