By Tom Doggett
WASHINGTON, July 16 (Reuters) - Future growth in U.S. oil
refining capacity is expected to be slow because of low
petroleum demand due to the weak economy, more ethanol use and
consumers buying fuel-efficient vehicles, according to the
government's top energy forecasting agency.
U.S. oil refiners added just under 78,000 barrels per day
(bpd) in refining capacity during 2008, as the weak economy
dampened demand, the Energy Information Administration said.
"The increasing use of ethanol and increasing light-duty
vehicle efficiencies are expected to dampen future refined
product demand growth, so the perceived need for future
refining capacity growth has been declining," the EIA said on
Wednesday in its weekly review of the oil market.
The 150 refineries in the United States at the beginning of
this year could process 17.7 million barrels of oil a day into
gasoline, diesel fuel, heating oil and other petroleum
products, the agency said.
That is up just 0.4 percent, or 77,703 bpd, from January
2008 and way down from the 175,000 bpd average annual expansion
of U.S. oil refining capacity from 1996 to 2008, according to
the EIA.
"The recent economic downturn caused petroleum demand to
fall in the second half of 2008, resulting in 2008 refinery
utilization of only about 85 percent. Capacity expansions
during 2008 were relatively low as well," the EIA said.
Energy companies may also be reluctant to build new U.S.
refineries or expand existing facilities in the future if they
are subject to strict greenhouse gas emission cutting
requirements compared with refineries in India and China that
won't have to meet tough emission reductions, said John Felmy,
chief economist at the American Petroleum Institute. "It really
is a challenging situation," he said.
Valero Energy (VLO.N) continued to have the largest U.S.
refining capacity, at just over 2 million bpd, followed by
Exxon Mobil (XOM.N), ConocoPhillips (COP.N), BP Plc
(BP.L)(BP.N) and Chevron (CVX.N). The five companies accounted
for 45.6 percent of total U.S. refining capacity, the EIA
said.
The agency said the refineries with the five largest
year-to-year increases (barrels per day) in capacity are:
Refinery 2008 2009 Difference
Capacity Capacity
Frontier, El Dorado, KS 107,500 130,000 22,500
Chevron, El Segundo, CA 260,000 279,000 19,000
Calumet, Shreveport, LA 42,000 58,000 16,000
Navajo, Artesia, NM 84,000 95,000 11,000
Sinclair, Sinclair, WY 66,000 74,000 8,000
(By Tom Doggett; Editing by Lisa Shumaker)
