US refinery capacity reached record high at the start of 2019

As of 1 January 2019, US operable atmospheric crude oil distillation capacity was a record-high 18.8mn barrels per calendar day (b/cd*), an increase of 1.1% since the beginning of 2018, according to EIA’s annual Refinery Capacity Report. The previous high of 18.6mn b/cd was set at the beginning of 1981. US annual operable crude oil distillation unit (CDU) capacity has increased slightly in six of the past seven years. Operable capacity includes both idle and operating capacity.

The number of operable refineries remained at 135 on 1 January 2019. However, similar to last year’s report, four refineries previously considered separate in survey data were merged into two. Tesoro Refining & Marketing’s Carson and Wilmington plants (now owned by Marathon) in California combined operations, and the Par Hawaii and Island Energy Services plants in Kapolei, Hawaii, also merged.

Targa Resources started up a new condensate splitter in Channelview, Texas, in 2019 that was idle at the start of the year but began operating during the first quarter. Suncor Energy split its reporting of the Commerce City East and West plants in Colorado.

Marathon Petroleum Corporation acquired 10 refineries from Andeavor in 2018, making it the largest refiner in the US. Marathon’s refineries collectively have an operable capacity of slightly more than 3mn b/cd, 16% of total US refining capacity and about 800,000 b/cd more capacity than the second-largest refiner, Valero Energy Corporation.

Refinery runs and crude oil production both continued at record levels in the US in 2018. US crude oil production, which averaged 11mn b/d in 2018, has more than doubled since 2009, according to the EIA. Crude oil inputs to refineries averaged 17mn b/d in 2018, compared with 14.3mn b/d in 2009.

Since 2009, operable refinery crude oil distillation capacity increased 1.2mn b/cd, and utilisation rose from 83% in 2009 to 93% in 2018, resulting in the 2.6mn b/d increase in crude oil inputs. During the same period, US crude oil imports decreased by 1.3mn b/d, and US crude oil exports increased by 2mn b/d, leading to an overall decrease in net imports of 3.3mn b/d.

Based on information reported to EIA in the most recent update, US refining capacity will not expand significantly during 2019. A fire on 21 June 2019 at the 335,000 b/cd capacity Philadelphia Energy Solutions refinery complex, the largest refinery on the East Coast, has resulted in its announced closure.

* 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.