Knoxville Asphalt Terminal
Daniel H. MoenterManager, State Government Affairs
33rd Annual TRB Summer Ports, Waterways, Freight and International Trade Conference
Baltimore, Maryland June 19, 2008
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Marathon Oil CorporationUpstream
Downstream Integrated Gas
In business since 1887
Fourth-largest U.S.-based integrated oil company
$65 billion in revenues in 2007
Fifth-largest U.S. refiner
Oil Sands Mining
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Marathon Downstream Segment
Fifth-largest U.S. refinerLargest pipeline carrier in volumes deliveredLargest privately operated inland liquids barge fleetOne of the largest producers of liquid asphaltThird-largest terminal system among R&M companiesMajor supplier to independent marketers in Midwest & SoutheastRetail marketing system of ~6,000 outlets in 18 states
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Marathon’s RM&T Operations
PipelinesUtilized
TerminalsUtilizedCoastal WaterTerminal
Inland Water Terminal
Refineries
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Tennessee RiverKnoxville, Tennessee
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Knoxville South Waterfront Redevelopment Vision Plan
Marathon Asphalt
Terminal
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Knoxville Asphalt Binder 2007
Knoxville, TN
Oakland, CA Could pave a 2,459-mile, two-lane road, if paved with 2-inch overlay
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100 miles
100 mile
s
160 miles
Knoxville Territory Map
270 miles
200 miles
120 miles
Knoxville TerminalAsphalt Customer
Chattanooga
Greensboro
Lynchburg
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Knoxville Asphalt Supply Routes
Catlettsburg to Knoxville
1,200 river miles 17 locks
Garyville to Knoxville1,500 river miles 13 locks
Requires ~12 days of transit time, provided no delays(weather, locks, equipment, etc.)
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Marathon Asphalt – Primary Transportation
Primary transportation from refineries– 86% barge– 12% truck– 2% rail
Knoxville asphalt terminal– Supply: 100% barge– Sales: 100% truck
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Knoxville Terminal’s Potential Options
Relocate
Close
Co-exist
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Relocate Asphalt Terminal
River access essential
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Barge to Railcar / Truck Transport Ratio
1 tow / 2 barges =
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Barge to Railcar / Truck Transport Ratio
1 tow / 2 barges =
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72 railcars
Note: Knoxville Asphalt terminal has no rail capabilities.
2121
Barge to Railcar / Truck Transport Ratio(Cont.)
1 tow / 2 barges = 275 truck transports
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Knoxville Asphalt Receipts – 2007
61 Barges 8,000 Trucks
~
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Relocate Asphalt Terminal
River access essential
Few suitable alternate sites– Adequate draft– Topography– Highway access– Utilities
Like-kind replacement of terminal assets extremely expensive
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Knoxville Terminal’s Potential Options
Relocate
Close
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Asphalt Supply Locations
Nashville
Kuttawa
Louisville
Knoxville
Memphis
Catlettsburg
Chattanooga
Asphalt Terminals
Third-party TerminalAsphalt / Emulsions Terminal
110 Miles
175 Miles
265 Miles
X
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100 miles
100 mile
s
160 miles
Knoxville Territory Map
270 miles
200 miles
120 miles
Knoxville TerminalAsphalt Customer
Chattanooga
Greensboro
Lynchburg
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Knoxville Asphalt Supply Routes
ChickamaugaWatts Bar
Fort Loudon
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Marathon Knoxville Asphalt Throughput as Percentage of Annual Lock Tonnage
0
10
20
30
40
50
2003 2004 2005 2006 2007
Chickamauga Watts Bar Fort Loudon
Perc
ent
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Close Asphalt Terminal
Few alternate asphalt supply options
Increased transportation expense for customers
Proposed highway projects likely burdened by higher material costs
Loss of economic activity and associated taxes
Significant reduction in tonnage through upper Tennessee River locks
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Knoxville Terminal’s Potential Options
Relocate
Close
Co-exist
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Takeaway Messages
Economic development should accommodate existing “economic base”
Barge transportation essential to cost-effective asphalt supply
Knoxville asphalt terminal a “regional asset”– Supplies customers in five states– Critical to highway construction & maintenance programs
Relocation of industrial facilities often problematic
Measures may be available to harmonize industrial facilities with new development
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