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February 2020
PETROLEUM WATCH
CALIFORNIA ENERGY COMMISSION
INSIDE PETROLEUM NEWS
Gasoline Retail Prices by Brand REFINING NEWS
Diesel Retail Prices by Region PBF Torrance: On January Chevron Richmond: On
California Oil Field Production 20, an emergency flaring February 10, a flaring event took
event took place. place due to a process upset
California Oil Field API Gravity 2018 Valero Wilmington: On January in one of the units, prompting
25 through February 1, the precautionary evacuations
Oil from the U.S. to California refinery experienced flaring of less than 100 people.
Properties of Oil from Other due to planned maintenance.
Countries to California Chevron El Segundo: On
January 30, an emergency
Sources of Oil to California flaring event took place.
Featured Topic: What Types of Oil
Do California Refineries Process?
GASOLINE RETAIL PRICES BY BRAND
January 2020 vs. 2019 $4.60
(Percentage Change) l) $4.40
a
76 8% higher in $4.20
m
ARCO 8% higher o $4.00
N
(
Chevron 7% higher n $3.80
llo$3.60
Hypermart 8% higher Ga
r $3.40
Shell 8% higher e
p $3.20
s
Unbranded 8% higher r
lla$3.00
Valero 8% higher o
D $2.80
January 2020 Averages $2.60 9 9 9 9 9
19 19 19 19 -1 19 19 1 1 20 20
- -1 - l -1
76 $3.63 b- r u t v- c- b-
e ar p ay un- J ug- ep- c o e an- e
ARCO $3.28 F M A M J A S O N D J F
Chevron $3.71 76 ARCO CHEVRON
HYPERMART SHELL UNBRANDED
Hypermart $3.19 VALERO
Shell $3.68 Source: California Energy Commission (CEC) analysis of Oil Price Information Service (OPIS) data
Unbranded $3.40
Valero $3.51
DIESEL RETAIL PRICES BY REGION
January 2020 vs. 2019 $4.40
(Percentage Change) l) $4.30
a $4.20
Northern CA 3% higher in
m $4.10
Central CA 2% lower o
N
( $4.00
Southern CA 3% higher n
llo $3.90
January 2020 Averages Ga
r $3.80
e
Northern CA $3.77 p $3.70
s
r
Central CA $3.67 lla $3.60
o
Southern CA $3.88 D $3.50
$3.40 9 9 9 9 9
19 19 19 19 19 19 1 1 20 20
- -1 - -1 -1
b- r l t v- c- b-
e ar p ay un- u ug- ep- c o e an- e
F M A M J J A S O N D J F
Northern Central Southern
Source: CEC analysis of OPIS data
CALIFORNIA OIL FIELD PRODUCTION
300
250
200
Other Counties
ls Ventura
e
r
r
a150 Los Angeles
B
n
illio
M
Kern (Kern River)
100 Kern (Belridge, South)
Kern (Midway-Sunset)
50
Kern (Other Fields)
0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
Source: CEC analysis of California Geological Energy Management Division (Cal GEM) data
CALIFORNIA OIL FIELD API GRAVITY IN 2018
15.0%
CRUDE TYPE
HEAVY
MEDIUM
10.0% LIGHT
oduction
cent of Pr
er
P
5.0%
0.0%
10 15 20 25 30 35 40 45
American Petroleum Institute (API) Gravity
Source: CEC analysis of Cal GEM data
OIL FROM THE U.S. TO CALIFORNIA
120 7
100 6
ls ls 5
e 80 e
r r
r r
a a
B B 4
f f
o 60 o
s s
n n 3
illio40 illio
M M 2
20 1
0 09 10 11 12 13 14 15 16 17 18 0 09 10 11 12 13 14 15 16 17 18
20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
Alaska Lower 48 States New Mexico Other US States
North Dakota Wyoming
Utah
Source: CEC analysis of CEC and Energy Information Administration (EIA) data
PROPERTIES OF OIL FROM OTHER
COUNTRIES TO CALIFORNIA
MIDDLE EAST NORTH AMERICA
4.0 COUNTRY 4.0 COUNTRY
3.5 IRAQ 3.5 CANADA
KUWAIT MEXICO
3.0 SAUDI ARABIA 3.0
2.5 2.5
Sulfur2.0 Sulfur2.0
1.5 1.5
1.0 1.0
0.5 0.5
0.0 0.0
10 15 20 25 30 35 40 45 50 10 15 20 25 30 35 40 45 50
API Gravity API Gravity
AFRICA, ASIA, EUROPE, & OCEANIA SOUTH AMERICA
4.0 COUNTRY 4.0 COUNTRY
ANGOLA ARGENTINA
3.5 3.5
BRUNEI BRAZIL
3.0 EQUATORIAL GUINEA 3.0 COLOMBIA
GHANA ECUADOR
2.5 2.5
KAZAKHSTAN PERU
Sulfur2.0 NIGERIA Sulfur2.0 TRINIDAD AND TOBAGO
1.5 RUSSIA VENEZUELA
1.5
UNITED KINGDOM
1.0 1.0
0.5 0.5
0.0 0.0
10 15 20 25 30 35 40 45 50 10 15 20 25 30 35 40 45 50
API Gravity API Gravity
Source: CEC analysis of EIA data
SOURCES OF OIL TO CALIFORNIA
800
700
600
Other Foreign
ls 500 Iraq
e
r
r
a Ecuador
B
400
f Alaska
o
s Saudi Arabia
n
illio300
M
200
California
100
0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
Source: CEC analysis of CEC, Port Import/Export Reporting Service, and California State Lands Commission data
FEATURED TOPIC
WHAT TYPES API GRAVITY AND SULFUR CONTENT OF U.S. CRUDES
OF CRUDE OIL 2.50
DO CALIFORNIA )Sour
% 2.00 California
REFINERIES (
nt PADD 4
PROCESS? e 1.50 PADD 2
ont PADD 3
C 1.00 PADD 5
ur (Includes CA)
WHAT IS CRUDE OIL? f PADD 1
ul
S 0.50
Crude oil, or petroleum, is composed Sweet
of hydrocarbons and other organic 0.00
materials found in the Earth’s crust. 20 25 30 35 40
Crude oil is refined primarily to Heavy Light
provide energy through transportation API Gravity
fuels, such as gasoline and diesel, Source: CEC analysis of CEC and EIA data
and to produce petrochemicals or heavier crude oil would require CRUDE OIL FROM THE REST
used to create products such as major changes to the refinery. To OF THE UNITED STATES
plastics and pharmaceuticals. get their desired crude type, refiners
The chemical makeup of crude oil may mix many types of crude, like The largest supplier of Oil from the
varies depending on the location of light and heavy crudes; or they may U.S to California refineries is Alaska.
extraction. The petroleum industry mix only a few types, like medium Imports from Alaska vastly outweigh
measures the quality of crude oil crudes. Deciding which crudes to imports from the lower 48 states.
using the following properties: mix depends on factors like price, The other largest suppliers of oil to
specific gravity, sulfur content, acid availability, and refinery maintenance. California are New Mexico, North
content, nitrogen, viscosity, pour Dakota, Utah, and Wyoming. The
point, mercaptan, hydrogen sulfide, The API Gravity and Sulfur Content of 2018 API Gravity of U.S. Crudes fall
1 U.S. Crudes chart displays properties
metals, and organic chlorides. within the light crude category.
of crudes used by California refineries
The most widely reported crude compared to the properties of crudes
properties are specific gravity and used in other Petroleum Administration 2018 API GRAVITY OF U.S. CRUDES
sulfur content. Specific gravity for Defense Districts (PADDs). PADDs
measures the density of a substance are geographic aggregations: PADD State Average API
compared to water. The petroleum 1 is the East Coast, PADD 2 is the Alaska 32
industry uses the American Petroleum Midwest, PADD 3 is the Gulf Coast, New Mexico 43
Institute (API) gravity scale, which sets PADD 4 is the Rocky Mountains, and North Dakota 44
the density of water at 10 degrees. PADD 5 is the West Coast. On average, Utah 39
A refinery will use API gravity to California crude inputs are heavier and Wyoming 39.5
categorize crude oil as light (more sourer than inputs in the rest of the Source: CEC analysis of CEC and ExxonMobil data
than 31.1 degrees), medium (22.3 United States. In 2018, crude inputs CRUDE OIL FROM
to 31.1 degrees), heavy (10 to less to California refineries had an average OTHER COUNTRIES
than 22.3 degrees), or extra heavy API gravity of 26.18 and an average
2
(less than 10 degrees). Crude that sulfur content of 1.64 percent. There are many reasons why California
is on the heavier, more viscous side refineries import different types of
of the API gravity scale is denser. SOURCES OF CRUDE OIL TO crude oil, but all are rooted in meeting
Extracting a heavy crude (with for CALIFORNIA REFINERIES refinery needs. Properties of Oil from
example an API gravity of 12) from Other Countries to California shows
the ground is like trying to drink a In 2018, California refineries received the major crude supplying countries
milkshake through a thin straw. 31.1 percent of their crude from by color and import volumes are
Sulfur content of crude oil is measured California, 11.4 percent from Alaska, represented by the size of the circle.
by the percentage of sulfur within and 57.5 percent from foreign In 2018, California refineries imported
crude. Higher sulfur content in sources. Sources of Oil to California foreign oil from three major regions:
crude oil is undesirable because displays the top suppliers of crude. Middle East, South America, and North
transportation fuels have a sulfur The top three foreign sources America. The largest supplier of light
content limit due to the formation are Saudi Arabia, Ecuador, and crude to California is Saudi Arabia,
of harmful sulfur oxides when Iraq. Foreign sources of crude are with 134.8 million barrels. Other large
sulfur burns. Also, because sulfur is increasing because California and suppliers from the Middle East are Iraq
corrosive, crude oil that has high sulfur Alaska oil fields are aging. As the oil (29.8 million barrels) and Kuwait (22.5
content is more damaging to refinery fields become older and depleted, million barrels), which are also light
equipment and pipelines. Crude oil is extracting crude oil becomes more crude sources. All crude oil coming
considered sweet if sulfur content is difficult. Foreign imports supplement out of the Middle East is sour, having a
0.5 percent or less, and sour if sulfur declining domestic sources. sulfur content greater than 0.5 percent.
3
content is more than 0.5 percent. CALIFORNIA’S CRUDE OIL As production in California oil fields
The properties of crude oil are used has declined, California refineries
to help determine its market value. California crude oil production in have filled their need for heavy crude
Crude oil that is light and sweet is 2018 breaks down into the following oil by increasing imports from South
usually more expensive than crude API gravity categories: 68 percent America. The largest supplier of crude
that is heavy and sour. A reason of crude oil is heavy, 24 percent is oil from the region is Ecuador (51.8
for this is that light sweet crudes medium, and the remaining 8 percent million barrels), primarily supplying
are less energy-intensive to refine is light. California Oil Field API Gravity heavy crude. The next largest supplier
than heavy sour crude. Refiners mix in 2018 shows the distribution of is Colombia with an API gravity of
many types of crude oil from both API gravity for California crudes. 18 to 28 degrees. Brazil is the final
foreign and domestic sources to major supplier in the region, providing
achieve their desired crude profile. California Oil Field Production breaks 17.6 million barrels as two distinct
down production by county and crudes, a heavy crude (15 to 18 API)
WHAT KIND OF CRUDE OIL GOES region. Kern County produces the and a medium crude (26 to 31 API).
INTO CALIFORNIA REFINERIES? most in California, with 65.7 percent Crude from North America consists
of total oil in 2018 originating from of small quantities from Canada
Refiners work towards processing Kern oil fields. The top three producing (10.9 million barrels) and Mexico (15
crudes with similar properties oil fields in Kern County are Midway- million barrels) with the majority of
because a significant shift to a lighter Sunset (12 percent), Belridge-South crude oil being heavy and with sulfur
(12 percent), and Kern River (9.5 content around 2 percent. Refiners
percent). Together, the three fields source the remaining crude from
extract about as much oil as the rest Africa, Asia, Europe, and Oceania,
of the producing counties combined. which ranges in crude properties.
1 McKinsey Energy Insights, Qualities (crude) https://www.mckinseyenergyinsights.com/resources/refinery-reference-desk/qualities-crude
2 API Gravity http://www.petroleum.co.uk/api
3 Sweet vs. Sour Crude Oil http://www.petroleum.co.uk/sweet-vs-sour
Gavin Newsom Karen Douglas, J.D. CALIFORNIA
Governor J. Andrew McAllister, Ph.D. ENERGY
David Hochschild Patty Monahan COMMISSION
Chair Commissioners
Janea A. Scott, J.D Drew Bohan
Vice Chair Executive Director
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