Gasoline Price Changes - Federal Trade Commission

GASOLINE PRICE CHANGES:
increase, the proportion of U.S. refining capacity in PADD II dropped slightly in 2005. See
Figure 4-7 supra.
As shown in Figure 4-6 supra, gasoline consumption in the Midwest exceeds its refinery
production by about 43 percent. In 2003, gasoline refined in the Midwest provided about 655
million barrels of the supplies consumed there, leaving about 280 million barrels to be supplied
from areas outside the Midwest. 50 The Midwest imported about 140 million barrels of the 280
million barrels in 2003 from the Gulf Coast (PADD III). 51
Pipeline capacity for gasoline deliveries from the Gulf Coast to the Midwest has
increased in recent years. The Centennial pipeline was converted from natural gas to transport
refined petroleum products. 52 The Centennial carries gasoline from the Gulf to central Illinois
and supplies other pipelines that serve Chicago; it moves up to 210,000 barrels per day. 53 The
Explorer pipeline, which also travels from the Gulf Coast to the Midwest, was expanded to
increase capacity by 130,000 barrels per day. 54 The addition of the Centennial pipeline and the
expansion of the Explorer pipeline have significantly increased pipeline capacity from the Gulf
Coast to the Midwest and appear to have eased the tightness of gasoline supplies in the summer
in the Midwest. 55
4. The Rocky Mountain States (PADD IV) rely on PADD IV refineries
and have limited pipeline connections.
Gasoline consumption in the Rocky Mountain States is the lowest of any of the five
PADDs (about 104.3 million barrels in 2003). See Figure 4-5, supra. Refineries in the Rockies
produce about the same amount of gasoline (about 104.1 million barrels in 2003) as is consumed
there. See Figures 4-5 & 4-6, supra. Not all of the gasoline produced by PADD IV refineries is
consumed in the Rocky Mountain states, however. In 2003, the Rocky Mountain states exported
and imported relatively small amounts of gasoline. 56 Although, the Rocky Mountain states are,
for the most part, self-sufficient in terms of gasoline supplies, limited connections to other
PADDs leave them vulnerable to supply shortages in the event of unanticipated PADD IV
refinery outages. That circumstance may change, however, if proposed projects for new
pipelines and increases in the capacity are built or undertaken. This would enable the existing
pipelines in the Rocky Mountain states to become better connected to gasoline supplies in the
Gulf Coast and in the Midwest. 57
5. The West Coast (PADD V) relies primarily on its own refineries and
marine supplies, and has very limited pipeline connections.
Gasoline consumption in the West Coast rose from about 414 million barrels in 1985 to
about 569 million barrels in 2003. See Figure 4-5, supra. The percentage of West Coast
gasoline consumption supplied from West Coast refineries rose from 90 percent to 93 percent
during that time. 58
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FEDERAL TRADE COMMISSION, JUNE 2005