American Fuel & Petrochemical Manufacturers (AFPM) Catching Heat Over the Cold Hard Facts About Russian Crude Imports
AFPM is “springing into action” this March, in the nation’s capital. The Washington DC-based organization is self-described as a, “leading trade association representing the makers of the fuels that keep Americans moving and the petrochemicals that are the essential building blocks for modern life”.
After a recent blog post was misinterpreted as an endorsement of Russian crude oil imports, some serious “reputation management” is underway at AFPM now.
Apparently, certain green-minded, pro-Ukraine, members of the US House of Representatives took issue with the cold hard facts in AFPM’s blog on the importance of crude oil imports from Russia, and other nations. The alleged “misreading” of the facts prompted AFPM President and CEO Chet Thompson to pen a clarifying letter to US Representatives Rush, McNerney, Peters, Castor, Welch, and Blunt Rochester.
By the way we should point out right up front here, that AFPM fully backs suspension of Russian petroleum imports as reported in a recent article at hydrocarbonengineering.com., and anywhere else AFPM could post a news release to “clarify its position”. The letter “makes clear the intent of the original blog and AFPM’s position in support of suspending future crude and petroleum product purchases from Russia.”
All the hub-bub over the association’s stance on Russian crude oil imports was generated by AFPM’s fact-filled blog. posted last February 25th. “Oil and Petroleum Imports from Russia Explained“.
The facts are that Russian imports of light sweet crude support the “greenest” policy states in the western US, and that foreign oil dependence along the US East Coast are just two points that don’t exactly harmonize with the DC green agenda of the current US administration. Not to mention the foes of fossil fuel in “green giant” environmental lobbies around the world.
So what are the embarrassing facts about the significance of imported Russian oil that bursts the green bubble of mainstream hype; another energy narrative fostered and fueled by what seems to be Joe Biden’s “all green or nothing” administration?
How Important is Russian Oil to the US? The 1% Factor
The facts about Russian Oil and the US Energy Supply Chain
- The U.S. imported an average of 209,000 barrels per day (BPD) of crude oil and 500,000 BPD of other petroleum products from Russia in 2021.
- Russian crude amounts to just 3% of U.S. crude oil imports
- Just 1% of total crude oil processed by U.S. refineries comes from Russia
- Gasoline and diesel represent only a small fraction of Russian imports to the United States, largely going to the East Coast.
- US West Coast refineries require imports of light sweet crude oil from other countries, including Russia.
- US complex refineries of the Gulf Coast states import the heavier Russian crude and other unfinished oils to produce gasoline, diesel, jet fuel, and a variety of other petrochemical products.
Russian Oil Imports to the US: The Geography Factor
Western states such as California and Washington, ironically two states with some of the most rigorous environmental policies, still face supply chain logistics challenges that have historically affected west coast territories since the covered wagon days. Namely, geography.
In 2021 the supply of Russian crude oil to refineries in California and Washington state increased substantially versus 2019, mainly to compensate for zero light sweet crude production from Nigeria.
It’s simply more cost-effective for West Coast state refineries to import crude from Russia and other nations via ship than to tackle the challenges of cross country, overland rail transportation for access to US domestic supplies of light sweet crude.
On the densely populated, energy voracious East Coast the AFPM blames heavy dependence on foreign sources of refined oil products “due to lack of local refining capacity and infrastructure to economically move products from refining centers along the USGC (US Gulf Coast) to markets along the eastern seaboard.”
So without Russian crude, will petrochemical-dependent product manufacturing take a significant hit?
Are Disruptions Ahead For the US Petrochemical Products Supply Chain?
Whenever crude oil is the topic, gasoline, diesel, and jet fuel come to mind, along with the traditional lubricants. But in just over a century of development, petrochemicals have worked their way into everyday industrial and household products as well.
In 2021 the petrochemical supply chain was already feeling the impact of the global wave of covid 19 disruptions, and those ripples can still rock the boats across a wide range of manufacturing sectors.
- In agriculture, petrochemicals are used for fertilizers, antibiotics, and pesticides, not to mention any food that includes artificial coloring or the wax wrap used to keep produce fresh.
- Once widely available, essential construction materials such as plastic electrical junction boxes, OSB (oriented strand board), engineered lumber, and PVC pipes that use petroleum-derived resins were already in short supply, even with Russian crude imports unimpeded.
- Cosmetics and baby products, shampoo, shaving cream, diapers, and so many other common plastic products are too numerous to list.
- Impurities are removed from CDs treated and washed with petrochemical solvents.
- Drugs such as aspirin and antihistamines, along with many others, are produced with petrochemicals.
“According to the Wall Street Journal, prices for polyethylene and polypropylene have reached the highest prices in years.” – Jeremy Bartolovitch Vice President of the Southeast Region The Douglas Company
At Resource Erectors we reported last September on the resin shortage that was impeding the construction materials supply chain throughout 2021. The US single-family housing boom left commercial PVC and paint supplies short as manufacturers prioritized the residential sector and industrial orders were put on the back burner.
We reported last August that supply chain kinks were driving hyper-volatility in construction materials and triggering double-digit price increases. Back-orders for mechanical, electrical and plumbing components with no firm fulfillment dates were all too common in 2021. But the issue affects far more than the construction industry.
According to the Douglas Company, a commercial construction firm based in Ohio and Florida, reports of supply chain disruptions are coming out from industries like automotive, food and consumer packaging, medical device and supply production, and more.
“Honda and Toyota have recently announced they will halt production at their North American plants citing plastic component supply chain issues. Unfortunately, this will mean major industries will compete for the same raw materials in the short supply.”
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