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Crash Overview of U.S. PADDs and Why They’re Important | RefinerLink

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$\color{red}{[1.]}$ Although 49% of US refining capacity resides in PADD III, notice how 58% of domestic crude is produced in PADD III and 55% of net crude imports also go to PADD III. $\color{red}{[2.]}$ This implies that crude oil must move out of PADD III to other PADDs to remain $\color{forestgreen}{balanced}$. As a matter of fact, roughly 1.4 Million barrels a day of oil moves from PADD III to PADD II and PADD IV.

  1. I don't grasp the implication. How does $\color{red}{[1]}$ above imply $\color{red}{[2]}$?

  2. $\color{forestgreen}{balanced}$ with what? Why must the PADDs' crude oil be balanced?

Community
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2 Answers2

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I worked in petroleum my whole career and never heard this bureaucratic double speak - PADD. No real world implication, just a mechanism to justify some bureaucratic salaries.Oil is relatively fungible and the US has extensive pipeline systems and barge system and ,in a pinch, can even resort to rail.So the oil goes where someone is willing to pay.

blacksmith37
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The total crude throughput is domestic production plus net crude imports.

All of the crude gets refined.

So if 49% of the total crude is refined in PADD III, and more than 49% of domestic production is in PADD III, and more than 49% of net imports arrive at PADD III, It doesn't matter what the ratio of imports to domestic production is, the total amount has to be more than 49%. So crude has to be shipped out of PADD III to refiners in other PADDs.

Phil Sweet
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    The crude is sent to where the refineries can handle it . The significant factors for determining where it goes are : Can the refinery handle the sulfur level? 2 Can the refinery handle the gravity/viscosity? 3 How much reforming capacity ( necessary for gasoline) ? And- alkylation, hydrocracking, market for LPG ,coking capacity etc. And how do these capabilities fit with the intended markets , such as what portion of jet fuel is produced. Still never heard of PADD. – blacksmith37 May 10 '20 at 00:23