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    GAS PRICES

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Fuel prices affect us all. Whether you drive for a living or hardly at all, the price of gasoline can significantly affect our family budget, vacation plans or corporate fleet costs . Gasoline is a commodity like any other and is subject to the same basic economic principles - supply and demand. Utah, unlike many states, has both oil production as well as refining capacity within the State. Utah’s five petroleum refineries depend on crude oil supplies from Utah as well as surrounding intermountain states. Our local refineries manufacture roughly the equivalent of Utah’s overall gasoline needs, but the market for gasoline is more complex than that. We both import and export a significant amount of fuel through the State. Fuel is imported from refineries in Wyoming and Montana and also exported to Idaho, Washington, Nevada and other surrounding states.

Several factors play into the retail price of gasoline, but the single largest factor is the price of crude oil. Transportation costs, refining costs, marketing costs, profits and taxes are also key cost components.

MORE INFO COMING SOON

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The Basics of Price

Utah’s petroleum industry strives to provide a reliable supply of products for consumers at fair market prices

Crude oil and gasoline are commodities and are subject to market forces like any other commodity

Sometimes we’re above the national average price, sometimes we’re below
Over time, markets equalize based on supply and demand
Utah’s isolated market is sometimes slow to go up and slow to go down, but market forces always dictate direction and speed

Competition is Good
Utah is a small market
There are five small refineries plus one products pipeline competing to supply the market

Factors Affecting Price

Crude Oil
Supply
Demand
Market Conditions
Taxes

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Crude Oil

GRAPH - Crude Oil Receipts

Crude used in Utah originates in the Intermountain West or Canada
The price of crude oil is set in the international marketplace.
Utah refiners pay “market price” for the crudes they use
Percentage of Utah crudes used has grown significantly
over the past 2 years

Crude Oil

GRAPH - Oil Production by County

Oil production plays a key role in economic development in rural Utah
Utah’s refineries “monetize” and give
value to Utah’s crude oil
Nearly all Utah crude has to be trucked to
refineries

Supply

Utah’s refineries produce over 3.6 million gallons of gasoline and 1.9 million gallons of diesel each day
Comparatively, California refineries produce 46.5 million gallons of gasoline and 8.7 million gallons of diesel each day
Utah’s 5 refineries have a combined capacity of 167,000 barrels per day throughput
Lack of Economies of Scale

Demand

Utah drivers and industry use over 3 million gallons of gasoline and 1.7 million gallons of diesel each day
In comparison, California consumes 44 million gallons of gasoline and 10 million gallons of diesel each day
Utah both imports and exports fuel.
Most excess refined capacity goes to supply points north via pipeline
Nationally, gasoline demand was up 3.8 percent in March over the previous year and is up 1.4% year to date

Did You Know?

  • As of 2015, Utah ranks 11th nationally in oil production and 12th among states in natural gas production.
  • There are currently 141 operating refineries in the United States with 5 located in Utah. Utah refineries produced over 36 million barrels (1.5 billion gallons) of motor gasoline in 2015 and over 19 million barrels (798 million gallons) of distillate fuel (diesel).
  • Well completions in Utah (both oil and gas) have declined dramatically over recent years as commodity prices plummeted and have stayed low. There were 1243 completions in 2008, 925 in 2014 and only 305 in 2015.
  • Duchesne (46%), Uintah (34%) and San Juan (12%) Counties accounted for 92% of oil production in Utah in 2015. The balance was produced collectively from Sevier, Grand, Summit, Carbon and Emery Counties.
  • The ratio of oil wells drilled in Utah versus natural gas wells has shifted significantly over recent years as commodity prices have affected company's drilling programs. In 2008, only 28% of wells drilled were for oil while in 2014, 76% of all wells drilled were primarily seeking oil.
  • Wages for energy-related jobs are nearly double the average annual wage for all employment in Utah.
  • In 2015 petroleum products and natural gas accounted for 59% of total energy consumed in Utah. Coal was responsible for 38% while all renewables combined made up 3% of energy use.
  • Utah refineries received record amounts of crude oil in 2014 and only slightly less in 2015, with 43% coming from in-state and 8% coming from Canada.
  • Fossil fuels made up 98% of Utah’s total energy production in 2015, while renewable sources accounted for only 2% of Utah’s production portfolio.
  • Property taxes charged against Utah oil and gas activities have increased more than six times since 1996, totaling nearly $64 million in 2015.
  • The value of crude oil produced in Utah reached an all-time inflation-adjusted high of $3.2 billion in 2014, but then dropped to only $1.5 billion in 2015 as commodity prices sank.
  • Natural gas production in Utah reached a record high in 2012 of 491 billion cubic feet, but has since dropped to 423 billion cubic feet in 2015.
  • Oil and gas operations in Utah account for about 1.3% of the State's gross state product. Utilities (including some non-energy sectors), refineries, and pipeline transportation and maintenance account for an additional 1.9%.
  • The last major refinery built in the United States was put into operation in 1977.
  • Utah’s average price of residential natural gas in 2015 was $9.72 per thousand cubic feet, the 17th lowest in the nation. As recently as 2011, Utah’s price was the third lowest in the nation, but new natural gas pipelines have better connected our once captive market with the rest of the United States.
  • Natural gas is the largest source of annual energy production in Utah, surpassing coal for the first time in 2010.
  • In 2015, 76% of the electricity generated in Utah was from coal-burning power plants. Electricity generation from natural-gas power plants more than doubled since 2007, increasing its total share in 2015 to 19%.
  • Utah produced 18% more energy than it consumed in 2015, continuing its status as a net-energy exporter. This percentage is usually closer to 30%, but production of fossil fuels was significantly down in 2015.
  • Energy-related employment in Utah declined to 15,367 in September of 2015 (down 16% from the 18,236 recorded in October 2014 prior to the oil price crash), of which the majority (30%) came from the oil and gas sector.
  • Average yearly wages in the energy sector ($83,400, first three quarters of 2015) are more than double the statewide average annual wage ($41,500, first three quarters of 2015).

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