Inspectioneering
News

U.S. Refining Capacity Dropped by 4.5% in 2020

Reuters, June 28, 2021
Reuters

U.S. refining capacity last year fell 4.5% to 18.13 million barrels per day (bpd) from a record 18.98 million bpd a year earlier, the U.S. government reported on Friday, reflecting weak demand for motor fuels during the COVID-19 pandemic.

It was the first annual decline since 2018, when capacity fell by 18,530 bpd and the largest since 2012, according to Energy Information Administration (EIA) data. That year capacity shrank 414,192 bpd following the Great Recession.

U.S. refiners last year suffered deep financial losses and closed five facilities as the pandemic slashed fuel sales. Average U.S. gasoline consumption fell 13% last year with gasoline and diesel prices hitting a four-year low, according to government figures.

Five refineries, with a combined capacity of 801,146 bpd, permanently shut following the 1.3 million-bpd drop in gasoline consumption as businesses closed and consumers stayed home. The closings drove capacity down to a level below 2016's 18.3 million bpd.

John Auers, executive vice president with Turner, Mason & Co, said the drop in capacity was expected.

"The global lockdowns and associated demand destruction led to the shutdown of refineries that were probably going to shut down eventually," Auers said.

The nation’s largest crude oil refiner Marathon Petroleum shut three refineries, while energy major Shell and independent refiner HollyFrontier each shut one in 2020.

Marathon converted one refinery to a renewable diesel plant and is converting another to produce renewable diesel. HollyFrontier also plans to convert its idled refinery into a renewable diesel producer.

The fire-ravaged Philadelphia Energy Systems refinery was sold last year to a developer who plans to demolish it.

In May, the 200,000-bpd Limetree Bay refinery in St. Croix, U.S. Virgin Islands, shut under orders from the U.S. Environmental Protection Agency. On Monday, owner Limetree Bay Energy said the plant would not restart. The EIA does not count Limetree Bay in U.S. refining capacity.


(Reporting by Erwin Seba; Editing by David Gregorio)

Click here to read the full article from Reuters.

Copyright 2021 Thomson Reuters. Click for restrictions.

Comments and Discussion

There are no comments yet.

Add a Comment

Please log in or register to participate in comments and discussions.


Inspectioneering Journal

Explore over 20 years of articles written by our team of subject matter experts.

Company Directory

Find relevant products, services, and technologies.

Talent Solutions

Discover job opportunities that match your skillset.

Case Studies

Learn from the experience of others in the industry.

Integripedia

Inspectioneering's index of mechanical integrity topics – built by you.

Industry News

Stay up-to-date with the latest inspection and asset integrity management news.

Blog

Read short articles and insights authored by industry experts.

Expert Interviews

Inspectioneering's archive of interviews with industry subject matter experts.

Event Calendar

Find upcoming conferences, training sessions, online events, and more.

Downloads

Downloadable eBooks, Asset Intelligence Reports, checklists, white papers, and more.

Videos

Watch educational and informative videos directly related to your profession.

Acronyms

Commonly used asset integrity management and inspection acronyms.