Implications of higher domestic crude production for U.S. refining

May 7, 2015

Source: U.S. Energy Information Administration, based on Turner, Mason & Company

In response to multiple requests over the past years, EIA is developing a series of analyses that address the implications of current limitations on crude oil exports for prices, including both world and domestic crude oil and petroleum product prices, and for the level of domestic crude oil production and refining activity.

The most recent report—.

The TM analysis considers operational changes and investments in capacity expansion that domestic refiners would likely make to process increasing volumes of light oil. The analysis considers two domestic production scenarios provided to TM by EIA, and two crude oil export policies (one reflecting current restrictions on crude oil exports, the other allowing unrestricted crude oil exports). The analysis covers the period from 2014 to 2025, using 2013 as the base year.

One pairing, combining low crude oil production and unrestricted crude oil exports, was considered but ultimately not included in the analysis, as the results were not materially different from those obtained for low crude oil production under current crude oil export restrictions.

In all cases considered, higher domestic crude oil production leads to a decline in crude oil imports, an increase in refinery runs, new investments to expand processing capacity, and higher crude oil and petroleum product exports. However, the magnitude of the changes and the complexity of the new processing units added vary across the scenarios.

While most of the ultimate uses of increased production are similar in the two cases developed using the higher domestic crude oil production path, there is one key difference. Under current policy, where U.S. crude oil exports are restricted, a significant amount of new refining capacity is built. However, if export policy restrictions were relaxed, almost 2.3 million barrels of crude oil could be exported by 2025.

More information is available in the full study, . Other EIA studies on the implications for increased crude oil production and relaxation of crude oil export restrictions include:

  • (released May 2014)
  • (released October 2014)
  • (released November 2014)
  • (released April 2015)
  • U.S. Crude Oil Production to 2025: Updated Projection of Crude Types (anticipated May/June 2015)
  • Analysis of Removing Current Limitations on U.S. Crude Oil Exports (anticipated summer 2015)

Principal contributor: Hannah Breul

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