Crude oil production in PADD 5—the western U.S.—continues a slow decline and crude-by-rail shipments are helping to make up the difference, according to the U.S. Energy Information Administration (EIA). West Coast oil imports also are increasing, the agency said.

The PADD 5 oil production drop differs markedly from the rest of the nation, where rising production from unconventional plays has turned around a decades-long fall in crude output that began in the early 1970s. U.S. crude production increased by 3.2 million barrels per day (MMbbl/d) from 2012 to 2014, EIA statistics show.

In comparison, PADD 5 output dropped by 100,000 bbl/d in the same four-year period, primarily due to a decline in Alaska North Slope (ANS) crude production. North Slope output peaked at 2 MMbbl/d in 1988 and has declined steadily since, averaging 479,000 bbl/d last year. The drop has created operating problems for the giant Trans-Alaska Pipeline that moves North Slope crude 800 miles south to the ice-free port of Valdez, Alaska. The crude is then shipped primarily to West Coast refineries. The 48-inch pipeline has an operating capacity of slightly more than 2 MMbbl/d.

North Slope production for March, the most current monthly number available, ticked up slightly to 491,580 bbd/d, the EIA reported. No major pipelines link West Coast refiners with oil-producing regions east of California.

That regional production drop off has left the three major West Coast refining centers—Puget Sound, San Francisco and Los Angeles—in a feedstock bind. Crude imports to the West Coast were fairly rare 20 years ago but now average 1.1 MMbbl/d, primarily from Saudi Arabia, Canada, Ecuador, Iraq and Colombia, according to EIA.

The other major response to the shortfall has been growing rail shipments, which were unknown just a few years ago. Government figures show crude by rail provided just 23,000 bbl/d to West Coast refiners in 2012, rising to 157,000 bbl/d last year, a 61.6% CAGR.

“Of the crude by rail moving to the West Coast, nearly 90% came from the Midwest (PADD 2), an average of 140,000 b/d in 2014,” the EIA said in a report. Blocking even greater rail-borne volumes has been a lack of West Coast unloading infrastructure.

“The increase in crude-by-rail movements was possible only after crude-by-rail unloading infrastructure was significantly expanded on the West Coast,” the report noted. “However, completion of these projects has not been equally distributed across the region. Currently, almost all operating facilities capable of unloading unit trains consisting of 80-120 tank cars, or an average of 70,000 bbl. of crude oil, are in the Pacific Northwest.”

West Coast crude-by-rail growth could have grown even more sharply.

“In California, regulatory and permitting problems have delayed construction of, or forced a cessation of, operations at several crude-by-rail unloading facilities,” the EIA said. In May, “the Plains-All American facility in Bakersfield, Calif., which unloads crude-by-rail shipments and then flows the oil via pipeline to California refineries, was given notice of air permit violations by the (U.S.) Environmental Protection Agency.”

Another challenge to westward rail shipment has been crude type. West Coast refiners spent billions of dollars to tool their plants to run most efficiently on ANS. The Alaskan oil is a comparatively heavy crude. ExxonMobil’s standard for ANS is 31.4º API gravity and just under 1% sulfur. Also, much of California’s in-state production is still heavier.

“The types of domestic crude oil most commonly transported by rail—Bakken from the Midwest and Niobrara from the Rocky Mountains—are light sweet crudes,” the EIA report noted. “Typically, Washington state refineries process lighter and sweeter crudes compared with the slate at California refineries, which are configured to run heavy sour crude oil similar to what is produced in California.”

It noted a large share of California-bound crude-by-rail shipments have been from PADD 4, primarily Utah and Wyoming. However, increasingly tight state regulatory standards have brought much of that traffic to a standstill.

“With rail access to domestic light sweet crude oil and pipeline and rail receipts of heavy Canadian crude, Washington state refineries have begun to replace declining production of ANS crude oil. Trade press reports indicate that refineries are blending light-sweet crude oil such as Bakken, with a heavier API crude oil, such as Western Canadian Select, to create a crude mix with characteristics similar to ANS,” EIA said.

The future for westbound rail shipments remains uncertain, EIA said.

“Several facilities in Washington and Oregon have the capability to unload crude-by-rail trains as well as to load the crude oil onto marine vessels,” it added. “Thus, domestic crude oil can be delivered to refineries along the coast in Washington and California via coastwise-compliant marine vessels. Additionally, some crude oil production in California has been transported by rail to refineries within California, albeit in limited quantities.

“Future increases of crude by rail to West Coast refineries will depend on the economic viability of crude by rail versus imported crude oil, the flexibility of refineries to modify their crude oil slate, and the regulatory outcomes for new or existing crude by rail facilities,” it concluded.