Energy Markets: Refinery Outages Can Impact Petroleum Product Prices, but No Federal Requirements to Report Outages Exist
GAO-09-87
Published: Oct 07, 2008. Publicly Released: Nov 06, 2008.
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Highlights
In recent years, global demand for petroleum products such as gasoline and diesel fuel has grown more quickly than the capacity to produce them, creating a tight market. U.S. refiners have been running near capacity, particularly during peak summer demand. In such conditions, unexpected refinery outages can result in price increases that adversely affect consumers. GAO was asked to evaluate (1) the trends in U.S. refinery outages over the last 5 years, in terms of reduced production capacity, frequency, and geographic location, and (2) the federal requirements for reporting outages at U.S. refineries. To evaluate these objectives, GAO obtained and analyzed Energy Information Administration (EIA) and commercial data, and obtained and analyzed federal legislation and policies, and interviewed federal agency, academic, and industry trade group officials.
Recommendations
Recommendations for Executive Action
| Agency Affected Sort descending | Recommendation | Status |
|---|---|---|
| Department of Energy | To meet its obligations to periodically report on the potential effects of planned outages and fulfill its federal role in providing timely and accurate data to explain trends in energy markets, the Secretary of Energy should direct the Administrator of EIA to reevaluate its EIA-810 monthly refinery production survey and commercially available data, to determine whether those data sufficiently reflect changes over time in various blends of fuels refiners produce to allow EIA to adequately conduct future analyses of outage effects on prices of petroleum products. |
Closed – Implemented
During an engagement examining trends in refinery outages (GAO-09-87), we found that there are important gaps in data currently available on refineries and refined products, and that some of these gaps would persist even if an Energy Information Administration (EIA) proposal to collect outage data is adopted. Without formally collecting other data within EIA's purview to collect--including data on special fuel blends and biofuel blendstocks--EIA and others may not be able to adequately analyze and describe the effects of refinery outages on reduced production capacity and prices of petroleum products. Therefore, in October 2008 we recommended that the Secretary of Energy direct the Administrator of EIA to reevaluate its EIA-810 monthly refinery production survey and commercially available data, to determine whether those data sufficiently reflect changes over time in various blends of fuels refiners produce and allow EIA to adequately conduct future analyses of the effects refinery outages have on prices of petroleum products and consider collecting additional, more discrete data on fuels not currently included in the EIA-810 monthly refinery survey, including special fuel blends and biofuel blendstocks. In January 2009, EIA reported to us that it would revisit its data collection efforts. That month, EIA began collecting information regarding refineries' production of biodiesel and other renewable diesel fuels in its monthly refinery survey. Moreover, in February 2010, EIA again updated its monthly refinery survey to include the collection of data regarding refineries' production of finished conventional gasoline blended with ethanol. Officials from EIA reported to us in August 2010 that these decisions were in part due to our work.
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| Department of Energy | To meet its obligations to periodically report on the potential effects of planned outages and fulfill its federal role in providing timely and accurate data to explain trends in energy markets, the Secretary of Energy should direct the Administrator of EIA to report to the Congress on the cost and benefits of collecting any additional, more discrete data on fuels not currently included in the EIA-810 survey, including special fuel blends and biofuel blendstocks that may be produced by a limited number of refineries or used in a limited market that could be disproportionately affected by outages. |
Closed – Implemented
During an engagement examining trends in refinery outages (GAO-09-87), we found that there are important gaps in data currently available on refineries and refined products, and that some of these gaps would persist even if an Energy Information Administration (EIA) proposal to collect outage data is adopted. Without formally collecting other data within EIA's purview to collect--including data on special fuel blends and biofuel blendstocks--EIA and others may not be able to adequately analyze and describe the effects of refinery outages on reduced production capacity and prices of petroleum products. Therefore, in October 2008 we recommended that the Secretary of Energy direct the Administrator of EIA to reevaluate its EIA-810 monthly refinery production survey and commercially available data, to determine whether those data sufficiently reflect changes over time in various blends of fuels refiners produce and allow EIA to adequately conduct future analyses of the effects refinery outages have on prices of petroleum products and consider collecting additional, more discrete data on fuels not currently included in the EIA-810 monthly refinery survey, including special fuel blends and biofuel blendstocks. In January 2009, EIA reported to us that it would revisit its data collection efforts. That month, EIA began collecting information regarding refineries' production of biodiesel and other renewable diesel fuels in its monthly refinery survey. Moreover, in February 2010, EIA again updated its monthly refinery survey to include the collection of data regarding refineries' production of finished conventional gasoline blended with ethanol. Officials from EIA reported to us in August 2010 that these decisions were in part due to our work.
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