US becomes net exporter of fuels in first nine months of 2011

02 December 2011 20:28  [Source: ICIS news]

HOUSTON (ICIS)--The US has become a net exporter of fuels because of rising demand in developing countries, higher US fuel efficiency, growing US crude production and stringent domestic fuel regulations, an analyst said on Friday.

“We’re a net importer when it comes to crude oil, but the US is a power house when coming to refining,” said analyst Stephen Schork, author of the Schork Report. “What we’re seeing is a lot of distillate exported to Europe and Latin American.”

A report from the US Energy Information Administration (EIA) showed the US exported 753.4m bbl of refined petroleum fuels in the first nine months of 2011, while importing 689.4m bbl.

Gasoline demand from US production is driven in part by emerging markets, said analyst Phil Flynn with PFGBest. He said Brazil and all of South America have a strong thirst for gasoline.

Another driver for US exports has been the stringent environmental regulations for fuel on the nation's west coast, Schork said.

Many refineries on the west coast are not able to sell their product because of needed upgrades to clean the fuel. As a result, those refiners sell to countries with less stringent requirements, he said.

“American refiners still face challenges from a blizzard of existing and new regulations that are costly and, in some cases, conflicting,” said National Petrochemical & Refiners Association (NPRA) president Charles Drevna. “These regulations threaten to reverse this new trend in American fuels production and further raise consumer costs.”

Domestic crude production is also growing, Schork said. Crude oil production is growing in North Dakota and Montana, especially from the Bakken shale basin. North Dakota production is close to that in Ecuador, which is a member of OPEC, said Schork. In 2010, Ecuador produced 486,090 bbl/day of crude oil.

By: Sheena Martin
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