PADD 3 has it all — crude oil production from the prolific Permian Basin, a string of refineries along the Gulf Coast, and a fair bit of refined product consumption. Its importance in crude oil production and refining has allowed it to play a central role in the nation’s crude oil supply-and-demand balance. This is especially true regarding crude oil exports, as it’s responsible for virtually all of the U.S. total that can top 4 MMb/d. Because of this, PADD 3 has a significant and growing influence in balancing domestic and international markets for crude oil and refined products. In today’s RBN blog, we’ll look at how the Shale Revolution has transformed the Gulf Coast and how its connectedness with international markets has reaffirmed its dominant position.
In Part 1 of this series, we explained how the U.S. is divided between five Petroleum Administration for Defense Districts, or PADDs, with PADD 1 representing the East Coast. With no production to call its own, PADD 1 relies on imported crude oil to supply its shrinking refinery base. But PADD 1’s population density also makes it the largest consumer of refined products. In Part 2, we put the spotlight on PADD 2 and how the looming threat of a 10% tariff on U.S. imports of Canadian crude oil might impact refineries in the Midwest/Great Plains. PADD 2 pipelines transport most Canadian exports, and its 25 refineries (combined capacity of 4.3 MMb/d) are, in many cases, significant consumers of heavy and light crudes from the Great White North.
Today’s blog puts the focus on PADD 3 and the critical role it plays in balancing crude oil and refined products markets. Of the ~10 MMb/d of refinery capacity in PADD 3, 5.5 MMb/d is situated in the Texas Gulf Coast sub-district (dark-teal area in Figure 1 below) with an additional 3.4 MMb/d in the Louisiana Gulf Coast region (light-blue area). That means ~90% of the entire PADD’s refining capacity is situated along the Gulf of Mexico, and these refineries aren’t there for the pristine beaches or the good weather. Their position gives them access to major crude oil import docks. That’s a major difference between PADD 3 and the noncoastal PADD 2, which relies heavily on feedstock from other regions, especially Canada.
Figure 1. PADD 3 Refinery Map and Refinery Capacities. Source: RBN Note: Colored Circles Indicate Refinery Locations
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About the song
“Pride and Joy” was written by Stevie Ray Vaughan and appears as the second song on side one of Stevie Ray Vaughan and Double Trouble’s debut studio album, Texas Flood. Some have claimed that it is a rewrite of Johnny Acey’s 1962 single on Fling Records, “I Go into Orbit.” Recorded in November 1982, the Texas blues shuffle was released as a single in June 1983. It went to #20 on the Billboard Mainstream Rock Singles chart. The song has since become a staple of most cover bands in America. Personnel on the record were: Stevie Ray Vaughan (vocals, guitar), Tommy Shannon (bass), and Chris Layton (drums).
Texas Flood was recorded in November 1982 at Jackson Browne's Down Town Studio in Los Angeles. The band played live in the studio with no overdubs. Produced by Stevie Ray Vaughan and Double Trouble, and Richard Mullen, the album was released in June 1983 and went to #38 on the Billboard 200 Albums chart. It has been certified 2x Platinum by the Recording Industry Association of America. In 2021 the album was inducted into the Grammy Hall of Fame. Two singles were released from the LP.
Stevie Ray Vaughan was an American blues guitarist, vocalist, songwriter and frontman for Double Trouble. Raised in Dallas, he was the younger brother of Texas guitarist Jimmie Vaughan. After forming the trio, Double Trouble, they became one of the most popular blues acts in Texas. After David Bowie saw them performing at the Montreux Jazz Festival in July 1982, he hired Vaughan to play on his 1983 album, Let’s Dance. John Hammond signed the trio to Epic records the same year. They released six studio albums, seven live albums, four EPs, and 33 singles. Vaughan won six Grammy Awards, five W.C. Handy Awards, and 10 Austin Music Awards. He is a member of the Rock and Roll Hall of Fame, Blues Hall of Fame, and Austin Music Hall of Fame. Vaughan died in a helicopter crash after performing a concert in East Troy, WI, in August 1990 at the age of 35.
