Colorado refinery outage squeezes Rocky Mountain fuel supply
Suncor's Commerce City refinery, the only active one in Colorado, stayed shut into early 2023 as regional gasoline and diesel inventories ran low, the EIA said.
In February 2023, the U.S. Energy Information Administration reported that a refinery outage in Colorado was pushing up fuel prices in the Rocky Mountain region and complicating supplies of gasoline and diesel.
The outage
Calgary-based Suncor shut down its 103,000-barrel-per-day refinery in Commerce City, Colorado, on Dec. 24, 2022. The company said extreme cold earlier that month had damaged equipment and that repairs would require a full shutdown, delaying operations until the end of the first quarter of 2023.
The EIA said the plant was the only refinery then active in Colorado. In 2021, the state accounted for an estimated 41% of gasoline sales and 25% of distillate sales, which include diesel and jet fuel, in the Rocky Mountain region.
Drawing on other sources
With Commerce City offline, the region had to draw on existing inventories and bring in fuel from refineries in other states. The EIA said Colorado has better pipeline links to other regions than other Rocky Mountain states, so transfers from the Midwest and Gulf Coast could partly reduce the need to rely only on local stocks.
The outage, along with other weather-related refinery disruptions in the region, cut refinery runs. Since the start of 2023, Rocky Mountain refinery utilization had averaged 71%, 15 percentage points below the five-year low for that time of year.
Regional inventories of both gasoline and diesel started the year well below their five-year averages. Gasoline stocks fell every week in January before rising for the week ending Feb. 3, the first increase since the outage. Distillate inventories were also below average, though weekly changes were more mixed.
Prices
From the end of December to Feb. 6, the average U.S. retail gasoline price rose 11%, while the Rocky Mountain average rose 23%. The EIA said that ran counter to the pattern of every year since 2018. Colorado and Denver gasoline prices had each risen by more than $1 a gallon since Dec. 26.
The agency also warned that spring refinery maintenance across the country could reduce operations more than normal, since some work had been postponed in 2022.
What it meant for carriers
The EIA said the outage could complicate diesel supply in the Denver area and the wider Rocky Mountain region, where distillate stocks were already below average. It said low inventories were likely to keep pressure on regional fuel prices through the end of the first quarter. Until Commerce City came back, the region had to rely on its inventories and on fuel brought in from refineries in other states.