The U.S. is seeing softer domestic demand for traditional fuels, but pockets of the country remain highly dependent on imported gasoline, jet fuel and diesel. Today, we’ll zero in on which PADDs are at the highest risk for shortages and price spikes if the Iran war drags on for an extended period.
End markets for Canadian crude oil have evolved as production and export capacity have grown, especially in the past few years. Today, we dig into the data to see where Western Canadian Sedimentary Basin crude oil supply goes, how it gets there, and how those destination markets have evolved.
The U.S. is on the brink of a major transformation in refined products. New pipelines into the Desert Southwest and connecting out to California, along with refinery shutdowns along the West Coast, are poised to usher U.S. refiners into a new era shaped by consolidation, efficiency and market power.
For the past several years, a potent combination of market developments has incentivized PADD 2/Midwest refiners — and their midstream partners — to move increasing volumes of refined products east. In today’s RBN blog, we’ll discuss what’s been happening lately and how it’s affecting refiners.
Western Canadian crude oil production is rising fast. To keep pace, Enbridge is planning expansions to its pipelines into the Midwest and Great Plains. But PADD 2 refineries are maxed out on heavy crude, so virtually all those incremental barrels will need to keep flowing south to refineries and export terminals along the Gulf Coast. Can the pipelines from PADD 2 to PADD 3 handle the higher volumes? In today’s RBN blog, we discuss the knock-on effects of rising Western Canadian production and Enbridge’s pipeline expansions.
The Rockies Express Pipeline (REX) has been transformative. Originally built as a west-to-east pipeline, its main job was to give Rockies natural gas a way to reach premium markets in the Midwest and the Northeast. But by the time it was constructed, surging production in the Marcellus and Utica shales had overwhelmed the need for Rockies gas in the East, and REX evolved to become a major outlet for Appalachian gas to the Midcontinent. Now, REX has moved beyond its first two incarnations, and its owner, Tallgrass Energy, has announced plans to build a greenfield pipeline that would connect REX and the markets it serves with the prolific Permian Basin, 900 miles south of the existing mainline. In today’s RBN blog, we’ll discuss REX’s history, where it stands today, and how a new pipeline connection with the Permian might fit into its evolving strategy.
Over the past 15 years, the U.S.’s crude oil supply/demand balance has been transformed by the Shale Revolution. Increasing production unlocked through horizontal drilling and hydraulic fracturing have pushed up the nation’s overall supply without an equal change in refining capacity, resulting in significant changes in regional balances. In today’s RBN blog, we discuss what PADD-by-PADD crude oil supply/demand balances can tell us and preview our latest Drill Down Report.
The looming threat of a 10% tariff on U.S. imports of Canadian crude oil hasn’t just angered Canadians — and understandably so, we might add. It’s also put a spotlight on PADD 2 — the Midwest/Great Plains region — whose pipelines transport the vast majority of Canadian exports and whose 25 refineries (combined capacity 4.3 MMb/d) are, in many cases, significant consumers of heavy and light crudes from up north. Put simply, to assess the impacts of the still-possible trade war on U.S. refiners and producers on both sides of the border, you need to understand PADD 2’s crude oil supply/demand balance and the options Midwestern refineries that currently run Canadian crude would have if a tariff were put in place. In today’s RBN blog, we’ll discuss these dynamics.
President-elect Trump’s plan to impose a 25% tariff on all imported goods from Canada and Mexico — including crude oil — has raised concern among U.S. refiners, many of which depend heavily on those imports and would face serious challenges in replacing them. The question is, given that dependence and the incoming administration’s pledge to reduce energy costs, will refiners — and oil producers in Canada and Mexico — succeed in their efforts to exempt crude oil from the tariff plan? In today’s RBN blog, we discuss the degree to which U.S. refineries incorporate Canada- and Mexico-sourced oil in their crude slates, the potentially devastating impacts of a tariff on Canadian crude in particular, and the odds for and against U.S. tariffs on oil imports from its neighbors.
The Environmental Protection Agency (EPA) has approved a request by governors from eight Corn Belt states to remove a summertime waiver for Reid Vapor Pressure (RVP) included in the Clean Air Act (CAA) for E10 gasoline, a 90/10 blend of petroleum-derived gasoline blendstock and ethanol. The motive for the governors’ request was a desire to increase sales of E15 gasoline and, by extension, boost ethanol/corn demand by putting it on the same summertime footing as E10. In granting the approval, the EPA conceded that the distribution system wasn’t ready for the change. In today’s RBN blog, we look at the decision and the impact it will have on refiners, retailers and drivers, and how it is likely to work against the Biden administration’s plans to keep a lid on gasoline prices.
