Refineries from Ohio to Minnesota are capitalizing on access to cheap crude from Western Canada and North Dakota oilfields, breaking a historic dependence on Gulf Coast fuel, Reuters reports.
Since the early 2000s, crude and fuel flows from the Gulf Coast into the U.S. heartland have been cut in half, as crude from Canada and North Dakota has pushed Midwest refining activity to record levels. Last year, Midwest refining capacity rose to 3.9 million barrels per day, the highest annual volume on record.
“Ten years ago, we were 1 million barrels per day short on products, with the Gulf Coast supplying the product. Today, the midcontinent is flush with products,” Marathon Petroleum CEO Gary Heminger tells Reuters.
Yet analysts warn that weakening U.S. gasoline demand will make it challenging for Midwest refiners to sell their growing output. The Midwest is landlocked, making it hard to get products to new markets, especially as rival refiners defend their turf.
