This report examines refinery outages planned for the first half of 2015 and the potential implications for available refinery capacity, petroleum product markets and supply of gasoline, diesel fuel, and heating oil. The U.S. Energy Information Administration (EIA) believes that dissemination of such analyses can be beneficial to market participants that may otherwise be unable to access such information.

This issue of the report focuses on how planned refinery outages may affect the adequacy of regional distillate fuel and gasoline supplies, as defined by Petroleum Administration for Defense District (PADD) areas. The report analyzes the availability of refinery capacity to produce diesel fuel and heating oil (distillate) and gasoline, focusing on two refinery units, the atmospheric crude distillation unit (CDU) and the fluid catalytic cracking unit (FCCU), that are strongly correlated with distillate and gasoline production, respectively. This report also provides data on the historical level and frequency of unplanned outages and considers how unplanned outages could prove disruptive based on expectations for overall supply in each region, taking planned outages into account.

Planned refinery maintenance during the first half of 2015 is not expected to adversely impact the supply of gasoline and distillate. The impact of refinery outages on product supplies during the first half of 2015 depends on many factors, including petroleum product demand, the availability of product supplies from available refinery capacity, inventories, imports and redirected exports, as well as actual levels of both planned and unplanned refinery outages. Barring unusually high unplanned outages, planned outages that extend beyond the planned time frame, or higher-than-expected demand, supply of gasoline and distillate should be adequate in all regions.

EIA's February Short-Term Energy Outlook (STEO) expects distillate demand to average 4.1 million bbl/d in the first half of 2015, an increase of 40,000 bbl/d (1%) compared to the same period last year. Colder-than-expected winter temperatures could cause distillate demand to be higher than expected in New England and the Mid-Atlantic states, which use distillate fuel for space heating. EIA's February STEO expects gasoline consumption to increase by 160,000 bbl/d (2%) during the first half of 2015 compared to the same period in 2014. U.S. gasoline demand is typically lower in the winter months and increases in the spring as driving season begins.

Planned refinery CDU and FCCU maintenance during the first half of 2015 is concentrated in the first quarter and is highest during February. Table 1 provides a monthly summary of the percentage of available refining capacity expected to be out of service for planned maintenance during the first half of 2015 by PADD.

Planned maintenance in PADD 1 (East Coast) is light, with the exception of February when FCCU maintenance is expected to affect 15% of capacity. With East Coast gasoline inventories above the five-year range as of February 20, and given the availability of gasoline supply to the region from the global market, gasoline supply should be adequate to meet demand.

Planned maintenance in PADD 2 (Midwest) is also light over the period and concentrated in the March-through-June timeframe. Supplemental supply from the Gulf Coast should be available if needed. However, the time required for resupply to reach the Midwest from the Gulf Coast does vary considerably across the region because of its size. Resupply can reach Oklahoma, Kansas, and Missouri from the Gulf Coast within 7-10 days but may take close to 30 days to reach the northernmost states at the end of the supply line.

In PADD 3 (Gulf Coast), moderate levels of FCCU and CDU maintenance are planned, concentrated in the first quarter. As Gulf Coast gasoline inventories are near the top of the 5-year range (just under 80 million barrels), supply of gasoline should be adequate. Distillate inventories are also high, above both 2014 and 2013 levels. In addition, substantial volumes of gasoline and distillate are exported from the Gulf Coast. Exports generally act as a stabilizer in U.S. product markets, similar to inventories, as they create a source of supply that may be diverted to domestic markets if product balances tighten.

Although there are moderate levels of maintenance planned for PADD 4 (Rocky Mountain), inventories of gasoline and distillate are high and as a result supply is expected to be adequate.

PADD 5 (West Coast) planned maintenance is light over the period, with FCCU maintenance having been concentrated in January. However, on February 18, the ExxonMobil refinery in Torrance, California experienced an explosion that could have a significant impact on in-region production of gasoline and distillate. It is too soon to assess what that impact might be. Gasoline inventories are at the low end of the 5-year range, and are sufficient to supply 21 days of average demand, one day below average. Distillate inventories remain above average and are sufficient to supply 29 days of average demand.
Source: EIA