From 2007 through 2010, imports of products from the U.S. Virgin Islands were split relatively evenly between New England (PADD 1A), Central Atlantic (PADD 1B), and the Lower Atlantic (PADD 1C), with a little over 10 percent going to the Gulf Coast (PADD 3) and the West Coast (PADD 5). That meant the Northeast region (New England and Central Atlantic) was taking about twice the volumes of imports from the U.S. Virgin Islands as the Lower Atlantic. But in 2011, imports into the Central Atlantic fell more than in the other East Coast sub-regions, bringing import volumes from the U.S. Virgin Islands into the Northeast closer to import volumes from the U.S. Virgin Islands into the Lower Atlantic.
As discussed in an earlier This Week in Petroleum, the HOVENSA announcement closely followed closures of two refineries in the greater Philadelphia area and the potential shuttering of a third. The loss of product supply from HOVENSA is likely to impact New England and the Lower Atlantic more than the Central Atlantic, as the Central Atlantic used little supply from HOVENSA in 2011. Options for alternative supplies include increasing shipments from other regions of the United States, boosting production at local refineries, and expanding imports from other sources. India's Reliance Industries, for example, has been a small but growing presence in East Coast product markets, and has been cited in trade reports as leasing significant storage capacity in the Caribbean. Other emerging countries, particularly China and Saudi Arabia, are expected to strongly expand their refining capacity in the near- to medium-term.