Recent data from the U.S. Energy Information Administration (EIA) indicates that the country’s operable atmospheric distillation capacity reached 18.4 million barrels per calendar day (b/cd) as of January 1, 2025. This figure represents a stalemate in refining capacity since the previous year, prompting small business owners in the energy sector to assess both opportunities and challenges in the current landscape.
The EIA’s Refinery Capacity Report is crucial for understanding the operational capabilities of U.S. refineries. The report defines two primary measures: barrels per calendar day, which reflects the estimated input volume a distillation unit can process in 24 hours under normal operational conditions, and barrels per stream day, which indicates maximum processing potential with no downtime or maintenance. The latter typically exceeds the former by about 6%, highlighting the difference between theoretical capacity and actual output.
Small businesses involved in the energy supply chain should pay particular attention to these capacity figures. The data shows that the three largest refiners—Marathon, Valero, and ExxonMobil—reported a modest calendar day capacity increase of less than 1% compared to 2024. Such minimal adjustments indicate that refiners are focusing on small-scale process improvements instead of major expansions. This trend can affect the availability of refined products and potentially lead to pricing stability in the coming year.
For instance, despite these small increases, the industry has not seen significant expansions or transactions in refining capacity since the previous year, contrasting sharply with 2023 when substantial projects were completed, including ExxonMobil’s expansion in Beaumont, Texas. Without similar large-scale initiatives on the horizon, smaller businesses may find themselves navigating a market where competition is limited by existing infrastructure.
One notable development in the report is the increased throughput at Motiva’s Port Arthur refinery, which has reclaimed its title as the largest single refinery in the U.S. by barrels per calendar day. However, its stream day capacity remained unchanged, indicating that while operational output may have increased, there is no enhancement in maximum processing capability.
The closure of LyondellBasell’s Houston refinery earlier this year may also have implications for small business owners in the region. Though the report does not account for this closure as it only reflects capacity as of January 1, 2025, the loss of nearly 264,000 b/cd from the market may affect supply dynamics and pricing strategies moving forward.
On a positive note, the 2025 report introduced Pasadena Performance Products, a new facility located near Houston, which specializes in the production of alkylate, a blending component essential for gasoline. Utilizing natural gas liquids instead of traditional crude oil, this facility signifies a shift towards alternative raw materials in refining, potentially providing small businesses with new avenues for collaboration and partnership in the production of cleaner fuels.
However, small business owners should be cautious as the report does not include capacities related to the Philipps 66 Rodeo refinery, which has transitioned to renewable diesel production. Such changes may create gaps in the marketplace, raising questions about the availability of traditional fuels versus renewable alternatives.
Overall, the findings presented in the Refinery Capacity Report bring valuable insights into the current state of the U.S. refining industry. While minimal changes in capacity may foster a stable environment for certain businesses, potential disruptions and the emergence of new facilities also create an evolving landscape where adaptability will be essential.
For small business owners in the energy sector, understanding these dynamics will be crucial for strategic planning and execution in the coming year. Emphasizing efficiency while staying attuned to industry shifts can provide a strong foundation for growth amid challenges. More information can be found in the original report from the EIA at this link.
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