Closure of Refinery May Cause Ultra-Low-Sulfur-Diesel Fuel Shortage in the Northeast

With the planned closure of Sonoco Inc’s Philadelphia refinery this July, motor carriers that operate in the Northeastern US might soon find adequate supplies of ultra-low-sulfur-diesel (ULSD) fuel difficult to come by. Sonoco’s Philadelphia operation currently produces 330 thousand barrels of ULSD daily, and with the closure of two other refineries in Pennsylvania since September, the Sonoco refinery’s end would mean a total loss of 50% of the region’s production capacity.

While 40% of the ULSD fuel in the northwestern US already comes from Gulf Coast refineries or other imports, the loss of Philadelphia’s Sunoco refinery would mean the region would likely need an additional 180,000 barrels per day of ULSD fuel to meet demand by 2013. Due to a shortage of excess pipeline to move any additional product from the Gulf Coast, it is likely that any additional fuel would need to be shipped by rail. This would likely lead to a rise in cost for northwestern consumers.

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