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As Gas Consumption Slumps, East Bay Oil Exports Boom

Pubdate:2012-03-12 10:28 Source:baycitizen.org Click:

The Bay Area is known for the Golden Gate Bridge, technology start-ups and California cuisine, among other things. Oil does not usually make the list.


But the region's five oil refineries along San Pablo Bay and the Carquinez Strait were responsible for $7.8 billion in oil exports in 2010, more than any other metro area in the country, according to a report released Thursday by the Brookings Institution.


It was up $726 million from the year before.


"A lot of U.S. exports are things that we do not see," said Emilia Istrate, a senior research analyst at Brookings, who helped write the report. "Sometimes people forget how much refined oil there is around," she said.


Government and industry officials said in interviews that the increase in the amount of finished oil exported from the East Bay's refineries was linked to changing economic and gas consumption patterns in the United States. Other facilities along the West Coast have also seen their exports skyrocket as domestic demand sags.


High gas prices, more fuel-efficient cars and fewer commuters have all contributed to California drivers using a million fewer gallons of gas than they did in 2005, according to the California State Board of Equalization, which collects the state gasoline tax.


"A lot of Central Valley workers who lost their jobs in the Bay Area are no longer making those long commutes and therefore are not buying as much gasoline," said Jaime Garza, a spokesman for the agency.


"Our options were to reduce production, lay off workers, close refineries or find markets for our products," said Tupper Hull, a vice president at the Western States Petroleum Association, an industry trade group. "We found new markets."


In December 2011, West Coast refineries exported an average of 33,000 barrels a day of motor gasoline, according to data provided by the United States Energy Information Administration, up from just 4,000 barrels a day in 2007, before the recession began.


Jonathan Cogan, a spokesman for the energy information agency, said the search for new markets had been a relatively easy one, because in many developing countries — including Brazil, China and Mexico — demand for refined oil far outstrips supply.


China has also been an eager buyer of petroleum coke, a solid byproduct of the refining process that is burned in developing countries to generate electricity. The Energy Information Administration's data show West Coast exports of the product — which is rarely burned in the United States because doing so produces enough pollution to violate clean air laws — have increased to 128,000 barrels a day, up nearly 60 percent since 2007.


These trends could continue even after the recession is over, said Istrate, the Brookings Institution researcher.


"In the long term, we know that the growth markets are going to be in developing countries," Istrate said. "So it is important for us to help companies who want to export to help them realize their potential."