June 22, 2023 [Reuters]- U.S. crude oil refining capacity has reversed two years of declines and climbed by more than 100,000 barrels, to 18.1 million barrels per day (bpd), according to a government report released on Wednesday.
During the first two years of the COVID-19 pandemic, processing capacity to produce gasoline, diesel and jet fuel fell 5.4% as lockdowns and work-from-home policies crushed motor fuel demand.
When gasoline and diesel demand rebounded last year, diminished capacity resulted in sky-high fuel prices and record profits for the industry. In November, U.S. President Joe Biden accused oil companies of profiteering and called on refiners to cut prices and reinvest profits in new output.
Increases reflect capacity expansions at Marathon Petroleum and Citgo Petroleum. This year’s 18.1 million bpd capacity remains below the 18.98 million bpd peak in 2019, according to Jan. 1 processing capacity measured by the U.S. Energy Information Administration (EIA).
The total does not include a 250,000 bpd increase that came after the cutoff date at Exxon Mobil’s (XOM.N) Beaumont, Texas refinery in March of this year. The Beaumont expansion, the largest addition to a U.S. refinery in more than a decade, pushed the total to about 18.3 million bpd, still shy of the 2019 peak.
Marathon Petroleum Corp (MPC.N) remains the nation’s largest refiner, with its Garyville, Louisiana, refinery now the nation’s third largest with 596,000 bpd capacity, according to the EIA report.
Marathon’s 2.9 million-bpd crude oil refining capacity represents 16% of the nation’s total. Valero Energy Corp (VLO.N) remains the second-largest U.S. refiner by volume with its 2.1 million bpd capacity equal to 12% of the U.S. total.
Motiva Enterprises (MOTIV.UL), which operates the 626,000-bpd Port Arthur, Texas, refinery, operates the single largest refinery by capacity in the U.S. with Exxon’s Beaumont plant just behind it. Motiva is the U.S. refining arm of Saudi Aramco.
Citgo Petroleum Corp’s (PDVSAC.UL) Lake Charles, Louisiana refinery grew by 37,000-bpd to 455,000-bpd.
The increase comes as cars and trucks are switching to renewable fuels and rechargable batteries instead of fossil fuels to reduce rising global temperatures from climate change.
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