FYIO / FWIW Washington state refineries slam crude-by-rail law as ban takes root
Phillips 66 (NYSE:PSX) tells U.S. regulators it has been forced to significantly cut shipments of Bakken crude to its Ferndale refinery on the Puget Sound because of Washington state's new crude-by-rail law, hurting the refinery's profitability.
The Ferndale refinery, with crude capacity of 105K bbl/day, is one of five refineries in the state which receive a total 175K bbl/day of crude by rail, more than 90% of it originating in North Dakota.
These refineries are fighting a Washington law, which took effect in July, that prohibits the unloading of any crude from a rail tank car unless the oil has a vapor pressure of less than 9 psi, potentially setting a de facto ban on Bakken crude shipped by rail.
Marathon Petroleum (NYSE:MPC), which operates the 120K bbl/day Anacortes refinery, says the value of its crude rail offload facility there "could be severely limited" because of the law.
BP says the law would prevent its Cherry Point Refinery from receiving and unloading crude at the rate allowed by permit.
North Dakota and Montana have petitioned the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration to block the law; Washington says it will fight any attempt to block the state law in court.