Since the century turned, there’s been a big buildup in refining capacity in the U.S. Midwest, primarily to process the increasing volumes of heavy sour crude being piped in from Western Canada. Over the same period, refining capacity in the Mid-Atlantic region has declined by more than half, mostly for economic reasons — including the lack of pipeline access to favorably priced U.S. shale oil — but also due to events, such as the devastating June 2019 fire at Philadelphia Energy Solutions’ 330-Mb/d refinery in Philadelphia, which led the facility’s owner to shut it down. In addition to spurring more refined product imports to the Mid-Atlantic and increased flows to the region on Colonial Pipeline, the changing market dynamics prompted a push to increase pipeline flows of gasoline and diesel east from the Midwest to markets in Pennsylvania and beyond. In today’s RBN blog, we continue a review of the U.S.’s still-morphing refined product pipeline networks with a look at recently added capacity from PADD 2 to PADD 1.
In this blog series, our aims are to provide an overview of the U.S.’s major refined product pipelines and to describe how the network continues to be reworked — extended, expanded, repurposed and/or reversed — to reflect changing market dynamics. In Part 1 we took a big-picture view, looking at many of the large pipelines and pipeline systems that transport gasoline, diesel and jet fuel long distances from refineries to refined product terminals throughout the U.S. We noted that, in addition to these long-haul, higher-volume pipelines, there are scores of shorter, lower-volume pipes that fan out from these lines to distribute refined products to terminals in smaller cities and towns. In most cases, gasoline and diesel are transported “the last mile” to service stations by truck.
Today, we begin a review of significant changes that the midstream sector has been making to existing networks to reflect major market shifts, such as the combination of declining refining capacity in the East Coast (PADD 1) and the push by refineries in the Midwest (PADD 2) to transport more of their refined products to the East Coast. In an upcoming blog, we’ll look at market shifts instigating a number of refined product pipelines in Texas and other states in PADDs 3 and 4 (Gulf Coast and Rockies, respectively).
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