Due to an explosion in a refinery the import of gasoline to California has boomed.
Due to an explosion in a refinery the import of gasoline to California has boomed.

California’s gasoline imports increase 10-fold after major refinery outage

Source: U.S. Energy Information Administration, publication

Over a five-month period following an explosion at a California oil refinery in February 2015, imports of gasoline into California increased to more than 10 times their typical level, drawing from sources that include India, the United Kingdom, and Russia.

Imported gasoline has been arriving from all over the world (see graph above) at rates of 28,000–68,000 barrels per day (b/d) for March through July (the latest data available). These levels compare with an average of 5,000 b/d in 2013-14.

California gasoline markets continue to adjust to the February 18 explosion and fire at the ExxonMobil refinery in Torrance, California, located southwest of Los Angeles. The ExxonMobil refinery is the third-largest refinery in Southern California. The refinery unit affected by the explosion, the fluid catalytic cracker (FCC), is essential to making gasoline. Torrance’s FCC represents 22% of the region’s total FCC capacity, making it a key source of gasoline and distillate fuels that meet California’s very stringent fuel specifications. On September 30, ExxonMobil announced the sale of the refinery to PBF Energy, which will be PBF Energy’s first refinery on the West Coast once the sale is complete.

Because of its unique product specifications and long distance from international gasoline markets, California specifically, and the West Coast in general, does not typically import much gasoline. As a result, the sudden loss of supply from the Torrance refinery resulted in immediate supply shortfalls and higher wholesale and retail prices. The higher wholesale prices covered the costs of importing more gasoline from distant markets into California to make up for the supply shortfalls.

The U.S. Energy Information Administration’s company-level import data show that from March to July, California imports of motor gasoline averaged 52,000 b/d, from 15 different countries. The main supply sources have been refineries in India and the United Kingdom, averaging 13,000 b/d and 11,000 b/d over that time, respectively. California has also imported an average of 5,600 b/d from Russia over that period, along with smaller amounts from refineries across Europe and Asia.