- This study examined one refinery product, residual fuel oil, and
analyzed changes that have occurred in its production and consumption
in the United States through time, with the objective of explaining why
the quantities and qualities of residual fuel produced, imported, and
used in different times and places have varied.
Refined petroleum products are not produced in equal or fixed
amounts, but reflect limits imposed by technology and the type of
crude processed, as well as contemporary economic constraints.
Thus, there is considerable variation in the refinery mix from one
country or region to another and from one time to another.
Demand for petroleum products also varies geographically and
temporally and reflects economic, political, and technological
factors as well as the availability of alternative fuels.
Statistical data analysis determined the changes that have
occurred and the spatial patterns that have developed in: 1) the absolute and relative importance of residual fuel output per refining
district; 2) the role played by imported residual fuel; 3) the market
sectors in which residual competes and its absolute and relative
importance to each.
Domestic production of residual fuel declined from 316, 221, 000
barrels in 1940 to 292, 517, 000 barrels in 1972 and average yield per
barrel of crude processed declined from 24.4 percent to 6.8 percent.
This downward trend was economically motivated and regionally most
pronounced in the Texas Gulf, Louisiana Gulf, Texas Inland, and
Oklahoma-Kansas -Missouri refining districts.
Residual fuel demand increased from 338, 106, 000 barrels in
1940 to 925, 647, 000 barrels in 1972. The difference between
domestic production and demand was made up by imports mainly
from Venezuela and the Netherlands Antilles. Residual fuels are
used for heating large spaces, supplying industrial heat, powering
vessels and locomotives, and for generating eLectricity. For these
markets, residual competes principally with coal and natural gas.
The main changes residual fuel has experienced in these markets has
been a marked decline in railroad use, and during the 1970's a rapid
growth in the utility market. Regionally, residual fuel is consumed
principally on the East Coast where in 1972, imported residual
accounted for 89. 6 percent of consumption.