EAST COAST RELIANCE ON OIL IMPORTS TO GROW

U.S. East Coast states' dependence on imported oil will increase sharply in this decade, the Coalition for American Energy Security (CAES) predicts.

It said by 2000 New England's reliance on imported oil will increase from the current 91% to 98%, Mid-Atlantic states will lose 240,000 b/d of products made from domestic oil, and the South Atlantic states will go from 59% dependency on imported oil to 76%.

The coalition advocates opening the Arctic National Wildlife Refuge Coastal Plain to petroleum exploration. Earlier, it released a study on how ANWR production would affect West Coast oil supply (OGJ, May 20, p. 28).

Isabelle Tapia, CAES executive director, said northeastern congressmen "can hardly ignore the numbers we're looking at here. Ten of these states are well above 80% dependency on foreign supplies now."

Bruce Wilson, an Arlington, Va., energy and transportation economist, prepared the three studies for the coalition.

BREAKOUT OF RELIANCE

Wilson found Delaware and Vermont rely 100% on imported oil, Maine and New Hampshire are 96% dependent on imports, Rhode Island 91%, Massachusetts and Connecticut 89%, New York 87%, Pennsylvania 86%, New Jersey 83%, Florida 69%, Georgia, Virginia, North Carolina, South Carolina, and West Virginia 53%, and Maryland and the District of Columbia 50%.

CAES said New England relies more heavily on imported oil than any other region in the country, and many of its states will be nearly 100% dependent by the end of the decade.

Wilson said the type of company supplying imported petroleum products in New England has changed. Large U.S. oil companies formerly controlled the market, but in the 1980s surplus supplies of products were imported at low spot prices, forcing majors out.

Wilson said, "The business vacuum created by their departure fostered creation of domestic trading companies and foreign trading companies who now dominate this market. Many of the new importing companies lack physical assets and can move out of the business (and the country) on short notice. Consequently, their ability or willingness to deliver petroleum products to the U.S. during a supply emergency represents a legitimate area of concern."

OIL SPILL LAW

Wilson pointed out that enactment of a federal oil spill law in 1990 has prompted many American companies to withdraw from U.S. flag tanker/barge operations because of concerns over unlimited liability for damage that could arise from marine accidents.

"These actions will accelerate the employment of one-ship foreign companies who will supply imports directly into New England," Wilson said. "Again, the reliability and financial capability of one-ship foreign companies transporting petroleum products supplied by trading companies to the U.S. during a supply emergency is cause for policy concern."

The U.S. Northeast increasingly relies on products from non-U.S. refineries that process crude from Middle East oil exporters.

In the Middle Atlantic states, Wilson said, high costs and foreign competition soon will eliminate U.S. flag tanker shipments from the Gulf Coast.

He said Colonial Pipeline shipments to the Middle Atlantic states will decline from 850,000 b/d in 1990 to 610,000 b/d by 2000 due to static refinery capacity on the Gulf Coast and rising petroleum requirements in the South Atlantic states.

Wilson predicted growing demand in Ohio by 2000 will nearly eliminate the current shipment of 100,000 b/d of products from Ohio to western Pennsylvania.

The South Atlantic states are almost entirely dependent on products shipments from other sections of the country and from overseas. Wilson predicted South Atlantic region demand will grow from 2.3 million b/d in 1990 to 2.6 million in 2000. And by the turn of the century, more than 75% of the oil delivered to the South Atlantic will be imported. Domestic crude supplies to the region will fall to less than half of the 1980 level.

Wilson said Florida will be affected most because of its high gasoline demand.

Because Florida is the only state in the region not supplied by a pipeline, it relies on waterborne shipments for all of its oil.

But as demand increases in other states, U.S. refineries are likely to cut waterborne shipments first, redirecting them to pipeline deliveries, which are less expensive and risky, Wilson said.