A Case of the Vapors

With domestic refining capacity falling behind domestic demand, imports have taken on a new role: smoothing out any mismatches between gasoline supply and demand. Gasoline is sold on a worldwide spot market, and international refiners know that every gallon of gasoline will be bought by someone, somewhere. Some 40 percent of American gas imports now come from Western Europe. European refiners are looking to solve this problem by switching refining technologies. Hydrocracking, which is a high-pressure process that relies on hydrogen to saturate various products, will enable them to make more diesel from a given barrel of petroleum, and less gasoline. The change in American fuel standards has tilted the playing field for would-be exporters. The reduction in sulfur content has taken many refineries in South America out of the running as suppliers of gasoline to the United States. Until these refineries make the necessary upgrade, imports may be restricted to advanced, First World refineries, such as Total’s and Irving’s facilities. The EIA projects that Western Europe will remain a dominant exporter of gasoline to the United States for at least another decade due to its high-tech refineries and its proximity to East Coast ports.