Valero could stop importing light, sweet crude to its Gulf Coast refineries as soon as 2013 and fully rely on U.S. production, Chief Executive Officer Bill Klese said at a recent industry conference.
With the rapid growth of domestic oil, Valero has projected that Gulf Coast refiners will soon run without foreign imports of light, sweet crude. Klese now says that moment could come by the end of 2013.
“The amount of production coming on is huge,” Klese said during the conference this month. “They really are going to push out imports.”
Federal data shows crude imports to the Gulf Coast have been gradually falling since about 2004. The region imported about 4.9 million barrels of crude per day in 2011, compared to 5.9 million barrels per day a decade earlier.
Crude production has been surging in West Texas, North Dakota and other U.S. regions as technology advances have given producers access to difficult-to-reach reserves. The rapidly growing domestic oil supply has moderate prices in the U.S. as the world crude price rose above $100 per barrel.
Meanwhile the closure of East Coast refineries, which are more dependent on higher-priced foreign crude, has squeezed the supply of refined fuels and improved profit margins for Gulf Coast refiners, Klese noted.
“The U.S. is an extremely competitive place to produce,” he said. “This is a huge opportunity for U.S. refining.”