U.S. Refinery Output has Risen 27% in 25 years despite halving the number of refineries

Source: www.gulfoilandgas.com 11/10/2005, Location: North America

Gasoline prices and hurricanes have stimulated much discussion about the U.S. refining industry's ability to meet America's growing demand for gasoline and other fuels. Let's consider the facts. To start, U.S. consumers use about 21 million barrels of oil-based products daily, or nearly three gallons per person per day. It's up about 28 percent since 1981.

Over the same period, output from U.S. refineries has risen by 27 percent — even though the number of refineries has been reduced by half. Fewer refineries, more fuel? While poor economics has contributed to no new refinery being built in the U.S. for decades and many inefficient refineries going out of business, remaining refiners have found ways to increase capacity and output at existing facilities. Investment in expansions, new technology, improved equipment reliability and increased utilization of facilities have all played a part.

This approach has proven highly effective and efficient in meeting the growth in demand for gasoline and other refined products. At ExxonMobil, for example, we’ve increased the capacity of our existing U.S. refineries by more than 2 percent per year since 1995 — the equivalent of building three new average-sized refineries and more than the growth in overall demand.

Given the significant economic uncertainties and long time periods associated with planning, siting, permitting and building new refineries, we expect expanding output at existing plants will continue to be central to meeting growing demand.

Imports also have a role. Importing is not new — the U.S. has been importing refined products for over 50 years — and even when unusual circumstances, such as the recent Gulf Coast hurricanes, disrupt normal supplies, oil companies have been able to temporarily increase the supply of imported fuels to balance demand. Meeting the energy needs of a growing U.S. economy is an ongoing challenge, but one that continues to be met. For many decades, innovation, investment and an effective international supply system have provided America with its energy supplies. With sensible regulatory policies, we expect that this will continue to be the case for a long time to come.


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