California to import more crude as domestic, Alaska output falls

Long Beach (Platts)--27Mar2007

Dwindling crude production in California and Alaska amid expansions in
refining capacities will lead Californian refiners to meet their crude oil
requirements through imports, said Gordon Schremp of the California Energy
Commission at the Platts California Fuel Conference in Long Beach, California,
Monday.
"Despite the current high prices, the decline in California's crude
production will continue," said Schremp. "California's production has fallen
from its peak of about 1.16 million barrels/day in 1985 to 685,000 b/d in
2006."
In 2005, crude imports into California amounted to about 1.1 million b/d
while in 2015 this is expected to rise to between 1.3 and 1.5 million b/d.
About 60% of these imports would go into southern California, Schremp said.
"Alaskan crude production has declined 60% since 1986 and declining
domestic oil production will need to be replaced with increased imports of
crude oil from foreign sources," Schremp said. "Total crude imports into
California has risen by 18% from 1996 to 2005 while imports from Alaska has
fallen by 50%."
He added: "Reducing the rate of demand growth for transportation fuels
will not have any impact on crude imports. Any reduction in demand FOR
traditional fuels will likely result in a`decrease of imported transportation
fuels rather than a decrease in crude oil processing."
Currently, California has a refining capacity of about 2 million b/d.
Californian refiners use domestic and Alaskan crudes to feed their refineries
with any shortfall being met through imports.
--Esa Ramasamy, esa_ramasamy@platts.com