Refinery closures. Shifting demand for gasoline, diesel and jet fuel. Yawning price differentials for refined products in neighboring regions. These and other factors have spurred an ongoing reworking of the extensive U.S. products pipeline network, which transports the fuels needed to power cars, SUVs, trucks, trains and airplanes — not to mention pumps in the oil patch, tractors and lawnmowers. New products pipelines are being built and existing pipelines are being repurposed, expanded or made bidirectional, typically to take advantage of opportunities that midstreamers, refiners and marketers see opening up. In today’s RBN blog, we begin a review of major pipelines that batch gasoline, diesel and jet fuel and look at the subtle and not-so-subtle changes being made to the U.S. refined products distribution network.
Before we dive into the U.S. refined products pipeline network, the changes being made to them and the reasons for those changes, we should acknowledge an important, relevant fact, namely that the refining sector has been on a wilder-than-normal roller-coaster the past few years. A lot of the twists, turns, ups and downs relate to COVID. March 2020 brought the first round of pandemic-induced lockdowns and the steepest decline ever in demand for refined products, especially gasoline and jet fuel. In only four weeks’ time, U.S. refinery utilization plunged from 87% to 67% — a point at which many refineries had to adjust operations or shut down (see Baby Break it Down). Things inched back toward normal over the next few months, but utilization plummeted again (to as low as 56%) in February 2021, when Winter Storm Uri knocked out power to most of Texas for several days (PADD 3 utilization fell as low as 41%!).
That was followed by a gradual recovery and, with rebounding demand, rising crude oil prices and Russia’s invasion of Ukraine in early 2022, refineries again were running flat-out, with near-record utilization rates and record refining margins. As we said recently in our Cracking Up blog series, the 3-2-1 crack spread — a rule-of-thumb estimate of the profits generated by refining three barrels of crude oil into two barrels of gasoline and one barrel of diesel — soared to new heights this spring, topping $50/bbl every day since late May, according to RBN’s daily Chart Toppers report. (As a comparison, the 3-2-1 crack bottomed out at 46 cents/bbl in the early days of COVID.)
The Future of Fuels bi-annual report by RBN's Refined Fuels Analytics provides an in-depth analysis of the U.S. and global refinery industries, focusing on crude oil and fuel market dynamics, supply and demand, alternative fuels, refinery capacities, and price forecasts to help stakeholders navigate the evolving energy landscape.
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About the song
“Move It On Over” was written by Hank Williams and was released as a single by Williams in June 1947. The song, which went to #4 on the Billboard Most Played Juke Box Folk Records Singles chart, was Williams’s first major hit record and helped to secure him a spot on Louisiana Hayride, a country music radio show and a training ground for the Grand Old Opry. The song was recorded in April 1947 at Castle Studio in Nashville, with Fred Rose producing. Rose used Red Foley’s band, The Cumberland Valley Boys, to back up Williams. Personnel on the record were: Hank Williams (vocals, acoustic rhythm guitar), Zeke Turner (electric guitar), Jerry Byrd (Hawaiian steel guitar), and Tommy Jackson (fiddle).
Some musicologists have called “Move It On Over” the first rock and roll record and, listening to the approach to the song by Williams and the band — especially the rocking and swinging electric guitar solo by Zeke Turner — it’s hard to ignore its significance. However, other music writers say first-ever honors should go to “Rocket 88” by Jackie Brenston and his Delta Cats, which was recorded at Memphis Recording Service in March 1951 by Sam Phillips. (One of the members of the Delta Cats was Ike Turner, who with his wife, Tina, would have his own impact on rock and roll and soul music.) Many other artists have covered “Move It on Over” over the years, including George Thorogood and The Destroyers, who had a hit single with it from their album of the same name in 1979.
Hank Williams was an American country music singer, songwriter and musician. He is considered by many to be one of the most influential and iconic country music artists of all time. Born and raised around Montgomery, AL, Hank learned how to play the guitar from an African American blues street musician named Rufus Payne. His first professional break came when Montgomery radio station WSFA hired him to perform on and host a 15-minute program in 1937. During his lifetime Williams released two studio albums and 31 singles. Ten studio albums, eight live albums, 25 compilation albums and 30 singles were released posthumously. In 1987, Williams was inducted into the Rock and Roll Hall of Fame and received a Grammy Lifetime Achievement Award.
The last single released during Williams’s lifetime was “I’ll Never Get Out of This World Alive,” which came out in November 1952. Williams died from heart failure in the backseat of his baby-blue 1952 Cadillac convertible enroute to a show in Canton, OH, on New Year's Day 1953. He was 29 years old.
