Petroleum Watch California Energy Commission
Total Page:16
File Type:pdf, Size:1020Kb
May 2020 PETROLEUM WATCH CALIFORNIA ENERGY COMMISSION INSIDE REFINERY NEWS Gasoline Retail Prices by Brand • Kern Oil: On April 8, a heater • Marathon Martinez: On April 27, Diesel Retail Prices by Region fire occurred at the refinery the refinery temporarily idled due due to unknown reasons to demand concerns resulting Downstream Capacity (California Governor's Office from COVID-19 (Reuters). California Refineries of Emergency Services). 2019 Net Production • Chevron Richmond: On April 22, the Bay Area Air Quality Production Share Management District (BAAQMD) of Refined Products announced that Chevron USA Featured Topic: Inc. agreed to pay $146,500 to settle air quality violations Refining Operations Under in Richmond (BAAQMD). Decreased Demand CALIFORNIA GASOLINE RETAIL PRICES BY BRAND April 2020 vs. 2019 $4.60 (Percentage Change) $4.40 $4.20 76 26% lower $4.00 ARCO 30% lower $3.80 $3.60 Chevron 26% lower $3.40 Hypermart 33% lower $3.20 Shell 26% lower $3.00 $2.80 Unbranded 29% lower $2.60 Valero 28% lower $2.40 Dollars per Gallon (Nominal) $2.20 April 2020 Averages $2.00 76 $2.95 Jul-19 Oct-19 Apr-20 Jun-19 Jan-20 Feb-20 Mar-20 Aug-19 Nov-19 Dec-19 Sep-19 ARCO $2.64 May-19 May-20 76 ARCO CHEVRON Chevron $3.02 HYPERMART SHELL UNBRANDED VALERO Hypermart $2.47 Source: California Energy Commission (CEC) analysis of Oil Price Information Service (OPIS) data Shell $3.00 Unbranded $2.71 Valero $2.80 CALIFORNIA DIESEL RETAIL PRICES BY REGION April 2020 vs. 2019 $4.40 (Percentage Change) $4.20 Northern CA 18% lower $4.00 Central CA 20% lower $3.80 Southern CA 18% lower $3.60 April 2020 Averages $3.40 Northern CA $3.28 Central CA $3.11 $3.20 Southern CA $3.23 Dollars per Gallon (Nominal) $3.00 $2.80 Jul-19 Oct-19 Apr-20 Jan-20 Jun-19 Mar-20 Feb-20 Aug-19 Sep-19 Nov-19 Dec-19 May-19 May-20 Northern Central Southern Source: CEC analysis of OPIS data DOWNSTREAM CAPACITY United States Total Refineries U.S. Total End−Product 80% Vacuum Hydrotreating Distillation 60% 40% 20% 0% Mid−Stage Thermal Hydrotreating Cracking Reforming/ Catalytic Polymerization Cracking Petroleum Administration for Defense Districts (PADD) 1 PADD I Pennsylvania 80% 80% End−Product End−Product Hydro. Vac. Dist. Hydro. Vac. Dist. 60% 60% 40% 40% 20% 20% Mid−Stage 0% Therm. Mid−Stage 0% Therm. Hydro. Cracking Hydro. Cracking Cat. Cat. Ref./Poly. Cracking Ref./Poly. Cracking PADD 2 PADD II Illinois Ohio Oklahoma 80% 80% 80% 80% End−Product End−Product End−Product End−Product Vac. Hydro. Vac. Dist. Hydro. Dist. Hydro. Vac. Dist. Hydro. Vac. Dist. 60% 60% 60%60% 60% 40% 40% 40%40% 40% 20% 20% 20%20% 20% Mid−Stage 0% Therm. Mid−Stage 0% Therm. Mid−Stage 00 %% Therm. Mid−Stage 0% Therm. Hydro. Cracking Hydro. Cracking Hydro. Cracking Hydro. Cracking Cat. Cat. Cat. Cat. Ref./Poly. Cracking Ref./Poly. Cracking Ref./Poly. Cracking Ref./Poly. Cracking PADD 3 PADD III Louisiana Texas 80% 80% 80% End−Product End−Product End−Product Hydro. Vac. Dist. Hydro. Vac. Dist. Hydro. Vac. Dist. 60% 60% 60% 40% 40% 40% 20% 20% 20% 0% Mid−Stage 0% Therm. Mid−Stage 0% Therm. Mid−Stage Therm. Hydro. Cracking Hydro. Cracking Hydro. Cracking Cat. Cat. Cat. Ref./Poly. Cracking Ref./Poly. Cracking Ref./Poly. Cracking PADD 5 PADD V PADD V (except CA) California Washington 80% 80% 80% 80% End−Product End−Product End−Product End−Product Hydro. Vac. Dist. Hydro. Vac. Dist. Hydro. Vac. Dist. Hydro. Vac. Dist. 60% 60% 60% 60% 40% 40% 40% 40% 20% 20% 20% 20% 0% 0% 0% Mid−Stage Therm. Mid−Stage 0% Therm. Mid−Stage Therm. Mid−Stage Therm. Hydro. Cracking Hydro. Cracking Hydro. Cracking Hydro. Cracking Cat. Cat. Cat. Cat. Ref./Poly. Cracking Ref./Poly. Cracking Ref./Poly. Cracking Ref./Poly. Cracking Notes: PADDs are geographic aggregations: PADD 1 is the East Coast, PADD 2 is the Midwest, PADD 3 is the Gulf Coast, PADD 4 is the Rocky Mountains, and PADD 5 is the West Coast. States with total crude capacity greater than 500,000 barrels per day were used in this analysis. PADD 4 does not contain any states that meet this requirement so it has been omitted from the data. Source: CEC analysis of U.S. Energy Information Administration (EIA) data CALIFORNIA REFINERIES 2019 NET PRODUCTION 21.2% 58.3% 17.4% 3.1% Gasoline Diesel Jet Fuel Other Products Source: CEC analysis of CEC and EIA data PRODUCTION SHARE OF REFINED PRODUCTS 100% 90% 80% 70% 60% 50% 40% Production Percent Production 30% 20% 10% 0% Jul-19 Apr-20 Apr-19 Oct-19 Jun-19 Jan-20 Jan-19 Feb-20 Mar-20 Feb-19 Mar-19 Nov-19 Dec-19 Aug-19 Sep-19 May-19 Gasoline Diesel Jet Fuel Other Source: CEC analysis of CEC and EIA data FEATURED TOPIC REFINING CALIFORNIA REFINERIES PRODUCTION OPERATIONS UNDER 2,000 DECREASED DEMAND 1,800 1,600 DEMAND DECLINE 1,400 Refineries in California face an 1,200 unprecedented decrease in product 1,000 demand. Refinery operators have 800 responded by decreasing production and altering finished product output 600 where possible as shown in California 400 Thousands of Barrels Per Day Per of Barrels Thousands Refineries Production. For the week 200 ending on May 1, crude input for California refineries decreased 0 by 34.3 percent from a year ago, Jul-19 Apr-19 Oct-19 Apr-20 Jan-19 Jun-19 Jan-20 Feb-19 Mar-19 Feb-20 Mar-20 Sep-19 Nov-19 Dec-19 Aug-19 while gasoline production is down May-19 31.2 percent, jet fuel is down Gasoline Diesel Jet Fuel Other Source: CEC analysis of CEC and EIA data 71.7 percent, and diesel is down 10.5 percent. In addition, gasoline desulfurized molecules since catalytic types from EIA’s data into groups inventories are at their highest level cracking units are sensitive to sulfur. representing the four functions. in five years. One of California’s Sorting is represented by vacuum Coking units, or cokers, take the 11 major refineries, Marathon’s distillation. Breaking is represented bottoms of the vacuum distilling Martinez refinery, responsible for by thermal cracking (includes coking) and cracking processes and bakes nearly 8.5 percent of California’s and catalytic cracking (combines them at extreme temperatures. total refining capacity, went idle hydro and cat cracking). Rearranging This destroys some oil and on April 27, an indication of the is represented by combining produces carbon coke. The result unprecedented lack of demand. reforming, polymerization, and is more gas oil to feed downstream alkylation. Cleaning is represented Refineries are designed and built cracking units. Thermal crackers, by mid-stage hydrotreating with the crude oil input and product cokers included, use the higher and end-product hydrotreating. output in mind. While there is temperatures that the distillation To create these groupings, a some room for adjustment, much units avoid, because the carbon downstream unit's capacity is of the process is dictated by the coke fouls the distillation units. In calculated as a percentage of the tolerances of existing equipment. a coker, the coke is cleaned out crude distillation unit capacity. Crude distillation depends on the and sold as fuel or as precursor for composition of the crude oil input. steel and aluminum industries. Downstream Capacity shows the All other units, except distillation, are percentage of downstream capacity downstream units that allow refiners Rearranging for units in the U.S., PADDs, and greater control of final products. Rearranging units focus on states. Only states with a total crude gasoline by combining light capacity greater than 500,000 REFINERY PROCESSES molecules and reshaping them barrels per day were included in the into complex molecular shapes. analysis. These percentages offer a Oil refineries convert the mixture of This adds desirable qualities view of what a refiner expects after hydrocarbon molecules from crude oil like high octane ratings. they have run the crude unit. The into refined products that people use, area and shape show how much Alkylation and polymerization units, like gasoline and diesel. Refineries refineries rely on certain processes. or alky and poly units, take light use large processing units for four States with simple refineries molecules such as butane and major functions: sorting, breaking, will cast a narrow small shape, combine them into heavier gasoline rearranging, and cleaning. Some while states with large complex molecules. Alkylation is a newer processing units need catalysts, refineries cast a wide large shape. process using an acid catalyst which like platinum or sulfuric acid, to allows a wider range of light and California’s refineries have intensive react with the unrefined oil. Nearly gasoline molecules to combine. downstream refining versus the all the units operate by changing United States in every category temperature, pressure, and the The isomerization unit, or iso but end-product hydrotreating. movement of fluids. The sorting units unit, converts straight-line California refiners have a higher mid- is the first stage at most refineries. shaped molecules into branched stage hydrotreatment percentage. shapes of the same weight. The California’s vacuum distillation and Sorting resulting hydrocarbons usually thermal cracking percentages are Sorting units separate the have higher octane ratings. higher against the U.S. total, 62 heavy hydrocarbon molecules percent against 47 percent, and from the lighter molecules. The catalytic reforming unit, or cat reformer, converts low- 25 percent against 15 percent, The crude distillation unit, or crude quality (low octane) gasoline into respectively. These units work on unit, is the primary sorting unit and higher quality by rearranging the the heavy products, meaning that the centerpiece of most refineries.