Refinery Landscape Changes in US
Although the number of US refineries has declined since 2000, US refining capacity has increased, and the concentration of refining capacity among the top five companies increased from 38 percent in 2000 to 44 percent in 2013, according to the EIA.
Ownership of US refinery capacity changed substantially in recent years. Almost 40 percent of large refiners (i.e., those with at least 1 percent of total US capacity) in 2000 had exited the industry by mid-year 2013. Many refining companies changed substantially between 2000 and mid-year 2013.
Some key themes are:
- Specialization. Several large oil and gas producers with refining operations, including Marathon Oil and ConocoPhillips, transferred their refining assets to stand-alone refining companies.
- Refocus away from refining. Some companies demonstrated a lessened commitment to refining. BP and Chevron reduced their refining capacity (by 23 percent and 10 percent, respectively), but stopped well short of exiting refining. Total, Exxon Mobil, and Access Industries had slight reductions in US refining capacity (5 percent, 3 percent, and 2 percent, respectively).
- Refocus on refining. Other companies had noticeable increases in capacity. Valero and the joint ventures Motiva (Shell and Saudi Refining) and Deer Park (Shell and Mexico’s PMI Norteamerica) increased refining capacity by 277 percent, 23 percent, and 20 percent, respectively. Valero grew through acquiring companies and assets, while Motiva grew through investing in its assets, chiefly the expansion of the Port Arthur, Texas refinery, which is now the largest refinery in the United States.
- Vertical integration. Delta Air Lines, which owned no refining assets, purchased a refinery from ConocoPhillips and now produces jet fuel for its aircraft along with other petroleum products that it does not consume.
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