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United States Fuel Resiliency

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United States Fuel Resiliency United States Fuel Resiliency Volume III U.S. Fuels Supply Infrastructure Vulnerabilities and Resiliency FINAL REPORT Prepared for: Office of Energy Policy and Systems Analysis U.S. Department of Energy September 2014 INTEK Inc. Disclaimer This report was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor any of their employees or contractors, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, herein. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof. Data related to fuels supply and movements and descriptions of infrastructure were current at the time this report was prepared. The global and U.S. oil, natural gas, and refined products markets, supply patterns, and infrastructure are changing rapidly. Acknowledgements This work was performed for the US Department of Energy, Office of Energy Policy and Systems Analysis, as part of the AOC Petroleum Support Services, LLC (AOC-PSS) contract number DE-FE-0000175. The work was performed by INTEK Inc., under subcontract to AOC-PSS. Mr. Hitesh Mohan of INTEK Inc. served as the Project Director. Special recognition is also due to those who directly performed the work including: Mr. Peter M. Crawford (the Project Manager), Mr. Marshall Carolus, Mr. Christopher Dean, Mr. Steven Shapiro, and Mr. Matthew Gilstrap. Table of Contents I. Resiliency to TS&D Infrastructure and Supply Disruptions.........................................................1 II. Regional Fuels Supply Dependencies ........................................................................................7 A. Crude Oil ........................................................................................................................................... 7 B. Products ............................................................................................................................................ 8 C. Propane ............................................................................................................................................. 9 D. Natural Gas ..................................................................................................................................... 10 III. Regional Assessment of Fuels TS&D Vulnerabilities and Resiliency .......................................... 13 A. Approach ......................................................................................................................................... 13 B. PADD I - East Coast .......................................................................................................................... 14 Sub-PADD 1A (New England) ........................................................................................................... 15 Sub-PADD 1B (Mid-Atlantic States) ................................................................................................. 18 Sub-PADD IC (Southeast) ................................................................................................................. 22 C. PADD II (Midwest States) ................................................................................................................ 26 Sub-PADD II East and North............................................................................................................. 27 Sub-PADD II KS/OK........................................................................................................................... 30 Sub-PADD II West ............................................................................................................................ 33 D. PADD III (Gulf Coast, Texas, and New Mexico) ............................................................................... 36 Sub-PADD III Gulf Coast ................................................................................................................... 38 Sub-PADD III West TX and New Mexico .......................................................................................... 42 E. PADD IV Rocky Mountain States ..................................................................................................... 44 F. PADD V West Coast ......................................................................................................................... 48 IV. Infrastructure Hardening and Damage Prevention .................................................................. 53 A. Infrastructure Hardening ................................................................................................................ 53 B. Petroleum Industry Hardening Against Disruptive Events ............................................................. 54 C. Industry Preparedness for Fuels Supply System Resiliency ............................................................ 55 V. Government Reserves and Stocks of Oil and Refined Products ................................................ 57 A. History of the U.S. Strategic Petroleum Reserve ............................................................................ 57 B. SPR Natural Disaster Deliverability Issues ...................................................................................... 59 C. Petroleum Product Reserves .......................................................................................................... 61 VI. Federal and State Emergency Management and Energy Assurance Plans ................................ 63 A. Introduction .................................................................................................................................... 63 B. Federal Emergency Management Agency ...................................................................................... 63 C. Emergency Waivers of Federal and State Regulations ................................................................... 65 United States Fuel Resiliency: Volume III – Regional Vulnerability and Resilience iii D. State Emergency Energy Plans ........................................................................................................ 67 VII. Resiliency Stress Tests for Selected Supply Interruption Scenarios .......................................... 73 A. U.S. Import Dependence ................................................................................................................. 73 B. Origins of U.S. Imports and Quality ................................................................................................ 74 C. Import Disruption Stress Tests ........................................................................................................ 76 1. Venezuela Disruption .................................................................................................................. 77 2. Iraq Disruption ............................................................................................................................. 78 3. Strait of Hormuz Disruption......................................................................................................... 79 4. Russia Disruption ......................................................................................................................... 80 5. Saudi Arabia Disruption ............................................................................................................... 81 6. Mexico Supply Disruption ............................................................................................................ 82 7. Nigeria Supply Disruption ............................................................................................................ 83 D. Hurricane Stress Tests ..................................................................................................................... 85 1. Hurricane Landfall – Galveston Bay, TX ...................................................................................... 86 2. Hurricane Landfall – Port Arthur, TX .......................................................................................... 87 3. Hurricane Landfall – East New Orleans, LA ................................................................................ 88 VIII. Regional Resiliency Options ................................................................................................... 91 A. Introduction .................................................................................................................................... 91 B. Reduce Impacts of Choke Points on Crude and Product Supplies .................................................. 91 C. Harden Existing Refining, Transport, and Storage Infrastructure ................................................... 96 D. Improve System Resiliency for Liquids and Natural Gas ................................................................. 97 E. Improve Natural Gas Transmission and Distribution Systems ........................................................ 98 F. Assure Adequate Propane Stocks in Northeast and Other Regions ............................................... 99 G. Adopt Policy and Regulatory Measures to Facilitate Resiliency ................................................... 100 H. Risk Assessment, Option Prioritization, and Evaluation ............................................................... 101 Appendix III - 1: Summary of Key Provisions of State Energy
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