US refinery capacity virtually unchanged

As of 1 January 2018, US operable atmospheric crude distillation capacity totalled 18.6mn barrels per calendar day (b/cd)*, a slight decrease of 0.1% since the beginning of 2017, according to the Energy Information Administration’s (EIA) annual Refinery Capacity Report. Annual operable crude oil distillation unit (CDU) capacity had increased slightly in each of the five years before 2018.

The report also includes information about secondary units – downstream refinery units that are used to process the products coming from the atmospheric crude distillation unit into ultra-low sulphur diesel and gasoline, as well as other products. Secondary refining capacity, including thermal cracking (coking), catalytic hydrocracking, and hydrotreating and desulfurisation, increased slightly, up 1% from year-ago levels. These downstream capacity increases are primarily the result of changing processes that can increase refinery throughput rather than building new refining units.

The number of operating refineries in the US decreased from 141 in January 2017 to 135 in January 2018, largely reflecting classification changes in EIA’s survey – four refineries previously considered separate in survey data were merged into two, and two refineries were reclassified from idle to shut down. Consequently, the decrease in number of operating refineries does not necessarily represent a meaningful change in US refinery operating capacity, explains the EIA.

Record refinery runs have helped accommodate increases in US crude oil production, which averaged 9.4mn b/d in 2017, an increase of 4mn b/d from the level in 2009. Gross crude oil inputs to refineries averaged 16.6mn b/d in 2017 compared with 14.3mn b/d in 2009. Over that period, operable refinery crude distillation capacity increased 945,000 b/cd, and utilisation rose from 83% in 2009 to 91% in 2017, resulting in the 2.3mn b/d increase in gross crude oil inputs. Over the same period, US crude oil imports decreased by 1.1mn b/d, and US crude oil exports increased by 1.1mn b/d.

The report also notes that US refining capacity is not expected to expand significantly during 2018, with further investment in expansion projects dependent on expectations about crude oil price spreads, the characteristics of the crudes being produced, product specifications, and the relative economic advantage of the US refining fleet compared with refineries in the rest of the world.

*Refinery capacity is measured in two ways – barrels per calendar day and barrels per stream day. Barrels per calendar day reflect the input that a distillation unit can process in a 24-hour period under usual operating conditions, taking into account both planned and unplanned maintenance. Barrels per stream day reflect the maximum number of barrels of input that a distillation facility can process within a 24-hour period when running at full capacity under optimal crude oil and product slate conditions with no allowance for downtime. Stream day capacity is typically about 6% higher than calendar day capacity.

Figure 1: US crude production, net imports and gross inputs to refineries, 2009–2017 (in mn b/d)
Source: US EIA
Note: Differences between gross inputs and the sum of production and net imports reflect inventory changes and unaccounted for crude oil