Pain in the Gas: Refinery Troubles Push Gas Prices Higher

With gas climbing to record prices, many Americans are wondering why they are spending more before the start of the summer driving season.

Charlie Herman, the senior producer in the ABC News Business Unit, has spent years covering the oil industry in the United States. He put together a quick FAQ on what has become a bottleneck in the country's petroleum infrastructure: refineries.

Oil and Gasoline Consumption

Every Wednesday, the Department of Energy's statistical branch, the Energy Information Administration, releases a weekly summary of U.S. petroleum use.

For the week ending May 11, the EIA reported that the nation's 149 oil refineries operated at 89.5% of their total capacity, processing 15.3 million barrels of crude oil per day, up .5% from a year ago. The refineries produced 9.1 million barrels of gasoline per day, up from the previous week.

Drivers, however, used 9.3 million barrels of gasoline per day, 1 percent more than a year ago. The United States has had to import 11.5 million barrels of gasoline per day. For the year, Americans have been consuming an average of 9.1 million barrels of gasoline per day, up just more than 1.7 percent from the same period a year ago.

The Nation's Refineries

The EIA reports that as of 2006, the nation's 149 refiners could process more than 17.3 million barrels of crude oil a day. As recently as 2001 there were 155 refineries nationwide that had a maximum capacity of 16.6 million barrels of crude a day.

Refinery capacity peaked in 1981, when there were 324 refineries that could process a total of 18.6 million barrels of crude oil per day.

More than quarter of a century later, there are now less than half that number of refineries, but they have a larger refining capacity thanks to newer, more technically advanced refining technology.

The Recent Outages

Experts agree that large numbers of outages and disruptions at refineries have contributed to the recent rise in gasoline prices -- including last week's 5-cent climb to an average U.S. price of $3.10 a gallon, a nominal record price.

"Crude oil could be free and you'd still have these high prices because you can't make enough gasoline," said energy economist Philip Verleger, who has been tracking the problems at the nation's refineries.

As of April, Verleger had found more than 30 unplanned refinery outages, one or two at the same refinery. He calculated "unplanned refinery shutdowns have depressed U.S. gasoline production by 400,000 barrels per day."

The annual switch from winter to summer fuels is also partially to blame for the recent spike.

"The summer blends we use now are more expensive, and refiners are federally mandated to [create] cleaner burning gasoline. Some of the regulations from state to state add to the cost," said Phil Flynn with Alaron Trading.

Also, refineries perform maintenance during the changeover because the machines aren't operating. As one oil company executive put it, the refineries are doing maintenance on the car now before driving it in the summer.

Fires, lightning strikes and even squirrels getting into the power room at a refinery in California have also caused several outages.

Is Low-Sulfur Diesel to Blame?

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