Move It On Over—What’s Ahead in Refined Products Movements to the East Coast

A combination of pipelines and ships delivers some 4 MMb/d of transportation and heating fuels to the U.S. East Coast, most of it from Gulf Coast refineries. But there’s always room for improvement in refined products delivery infrastructure, whether it’s pipeline or port capacity expansions, new pipeline spurs, or new storage capability. The aim of these projects is almost always the same: to make distribution more efficient and to hold down the per-barrel cost of delivery. Today, we conclude our series with a look at possible infrastructure improvements and a note about the challenges these projects face.

The 17 East Coast states (and District of Columbia) that make up Petroleum Administration for Defense District (PADD) 1 consume a total of about 5 MMb/d of gasoline, diesel, heating oil and jet fuel (which we’ve shortened to GDHJ for simplicity’s sake). About one-fifth of that daily need is produced at refineries within PADD 1 (mostly near Philadelphia) and the other four-fifths is piped or shipped in, most of it from refineries along the Gulf Coast (PADD 3)—plus some imports. This blog series has described the infrastructure developed over the past 70-odd years to move GDHJ from where it’s refined to where it’s used. As we said in Episode 1, PADD 3 produces about 7.5 MMb/d of GDHJ, and sends about 2.8 MMb/d of that to PADD 1, more than 80% of it (about 2.3 MMb/d) via the two primary refined products pipelines between and through the two regions: the 2.5 MMb/d Colonial and the 700 Mb/d Plantation. Then, in Episode 2, we provided the details on those two pipelines: their routes, injection points, storage-tank terminals, spurs and delivery points. We also discussed two other, midsized pipeline systems (Buckeye Partners’ and Sunoco Logistics’) that interconnect with Colonial and help deliver large volumes to consumers in the Central Atlantic states (New York, New Jersey and Pennsylvania). Last time, in Episode 3, we described the very different situations that each of the four sub-regions in PADD 1 (New England, Central Atlantic, Southeast, and Florida) find themselves in regarding the sources of their GDHJ and the means by which these refined petroleum products are delivered. The Central Atlantic and Southeast sub-regions get most of their GDHJ via the Colonial and Plantation pipelines (and, in parts of the Central Atlantic, with assists from Buckeye and Sunoco pipes). In New England and Florida, though, waterborne deliveries play critical roles.

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This time, we look at several possible enhancements to the East Coast’s existing delivery infrastructure, including a major transportation fuels pipeline project in the southern part of PADD 1 and two pipelines in the northern part of PADD 1 that would deliver GDHJ to market or (in one case) deliver crude oil to refineries as well. As you’ll see, none of these projects is a certainty—in fact, the development of the biggest of them was put on hold March 30, the day we posted Episode 3. And as we’ll get to, the primary challenges they face aren’t lack of interest or demand, it’s concern about their environmental impact and/or the use of eminent domain to establish their rights of way. First, let’s look at that recently suspended project, Kinder Morgan’s proposed Palmetto Pipeline, which would run from an interconnection with the Plantation Pipeline at Belton in upstate South Carolina to the Atlantic coast at Savannah, GA, then south to Jacksonville, FL (Figure 1).

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