Since it opened, more than half the refineries in the U.S. have closed. (LogOut/ Eduardo Munoz Alvarez/Getty Images Covid and oil demand took divergent directions in mid-2020. Daily Caller News Foundation June 7, 2022. Crude oil production stopped and was permanently shut down in 2017. With gas prices surging past $5.00 a gallon, many Americans are wondering what is the problem. The supply is not meeting the demand for gas and that is what is keeping prices going up, especially on the West Coast, John Treanor, an AAA spokesman, told The Press Democrat. Prior to the pandemic, experts were already predicting a major downturn in the oil refinery sector across Europe, with companies having to rationalise their presence across the continent, particularly in light of the ageing nature of many of the refineries themselves. Underpinning the decisions not to reopen refineries is the fact that the U.S. is undergoing an energy transition from fossil fuels to renewables. Thus, the President whose administration has been actively trying to limit the domestic oil industrys ability to get its business done is now so desperate to shift blame for high gasoline prices that he resorts to the pretense of being disappointed that that has been happening. The refinery has since been bulldozed. It doesnt make sense, the 23-year-old said. IHS Markit: LNG Can Replace Ukraine Gas Flows To Europe, Biden Threatens End Of Nord Stream 2 If Ukraine Situation Escalates, Goldman Sachs Warns Of An Imminent Oil Supply Shortage, Court Seizes Malaysia Oil Firm Assets Amid $15 Billion Dispute, Saudi Arabias Oil Company Slips To Worlds 3rd Largest Company, Why Russia Finally Decided To Cut Its Oil Production, The Fatal Flaw Of The Renewable Revolution, Biden Thinks Oil Will Be Around For A DecadeItll Be Much Longer. }. Santa Rosa resident Paige Hogan, 33, topped off a Honda Civic for $5.79 per gallon at an Arco station on Fourth Street. As of Monday, his agency reported Santa Rosas average price for a gallon of regular unleaded fuel was $6. According to a report from Reuters, published in June of this year, the refining capacity across the US fell by 4.5% during 2020, the largest drop since the recession of 2012. What capacity that has been added since that time has been the result of expansion of pre-existing refineries and the building of smaller facilities with less than 50,000 bopd capacity and are thus exempt from certain EPA permitting processes. Cinquegrana said only one of the four California refinery shutdowns was unplanned. HOUSTON, April 21, 2022 /PRNewswire/ -- LyondellBasell (NYSE: LYB) . U.S. refiners throttle back Q1 output after record 2022 runs By Erwin Seba . She recalled paying closer to $5.25 per gallon less than two weeks ago. The average retail price of gasoline increased 51% in Colorado and 27% in the Rocky Mountain region between the end of December and Feb. 20, according to a U.S. Energy Information Administration . The reasons for those closures are due primarily to governments. This is so, so frustrating, Hogan said. Image Drilling for oil . UPDATE: This article has been updated to include comment from LyondellBasell Industries on its plans to cease operations in 2023. Limetree Bay Energy shut its St. Croix refinery due to financial problems in May 2021 after only operating for a few months, due to operational setbacks. Gasoline prices were also spiking on Monday, with the nations average up 8 cents from a week ago and 12.3 cents a month ago at $3.42 per gallon, according to Gas Buddy. Meanwhile, the operator made modifications in 2014 and 2015 to process 3,500 barrels of vegetable oils and beef tallow per day. Previously worked at Euromoney Institutional Investor and CNN. Refineries transform that oil into products and sell those. Both have been shut down. Consultants WoodMac, writing in August of this year, predicted a 9% drop in capacity across Europe in the period between 2022-2023, with clients being sent a list of allegedly under-threat refineries which included BPs 377,000 bpd Rotterdam refinery, Totals 102,000 bpd Grandpuits refinery in France and Petroineos 200,000 bpd Grangemouth refinery in Scotland. Change), You are commenting using your Facebook account. The Presidents letter goes on to ask the companies to come up with ideas to address issues relating to prices, inventories and refining capacity, and orders Energy Secretary Jennifer Granholm to convene an emergency meeting on the matter. The agreement announced on Sunday will taper into a 7.7-million-barrel-a-day cut from July to December and then to 5.8 million barrels a day from January 2021 to April 2022. By clicking Accept all you agree that Yahoo and our partners will process your personal information, and use technologies such as cookies, to display personalised ads and content, for ad and content measurement, audience insights, and product development. Fire broke out in the early morning that triggered a vat of butane to ignite with an explosion so large that it was detected from space. Before the pandemic struck, Pennsylvania Energy Solutions shut down its refinery in Philadelphia after a massive explosion shook the 335,000 bpd facility. France's TotalEnergies reported higher refinery throughput in Q3 amid improved margins. 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Dow and X-energy to build U.S. Gulf Coast nuclear demonstration plant, Oil slips as rising supplies balance Chinese demand hopes, Reporting by Laura Sanicola Nous, Yahoo, faisons partie de la famille de marques Yahoo. Lyondell originally planned to sell the plant back in 2017 but pivoted and continued operations. As a result of several U.S. refinery closures in 2020, U.S. operable atmospheric crude oil distillation capacity, the primary measure of refinery capacity in the United States, dropped 4.5% to a total of 18.1 million barrels per calendar day (b/cd) at the start of 2021. (LogOut/ Could Gravity Batteries Win The Energy Storage War? Right now, all bets are off.. The U.S. had five fewer refineries at the beginning of this year that at the beginning of 2020. Refiners turn crude oil into usable products like gasoline, diesel, and jet fuel. "I think the refining executives say, well, looks like the writing's on the wall," Cinquegrana says. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. The plant is set to close by December 31, 2023. Lyondell could permanently close the refinery ahead of the December 2023 deadline if one of several major production units is shut and cannot quickly return to production. Marathon Petroleum said in August 2020 that it would permanently close two refineries in Martinez, California, and Gallup, N.M. in response to lower fuels demand, after idling the facilities following COVID-19 outbreaks in the United States. Click Manage settings for more information and to manage your choices. The evidence for the impact of the pandemic on the sector is widespread and undeniable. Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. Another prediction is that overall earnings for refiners could fall by as much as 50% by 2035, from a figure of $147 billion in 2015. Operating refinery capacity in the US has decreased since 2020 Over the last three years, more than 1 million barrels a day of refining capacity went offline a s a result of the pandemic and extreme weather. No profanity, hate speech or personal attacks. The President might believe that a heavy-handed action to implement price controls or other actions could offer him some short-term political advantage leading up to the November elections, but in the mid-to-long-term it would only result in less availability of the products being controlled. Nothing contained on the Web site shall be considered a recommendation, solicitation, or offer to buy or sell a security to any person in any jurisdiction. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. There are examples of this approach from across Europe: Total is planning to convert the Grandpuits refinery in France which has been temporarily shut down since February this year into a biofuels and plastics recycling complex. This is a family newspaper, please use a kind and respectful tone. But suddenly, an administration that has waged a bureaucratic war on the domestic oil and gas industry since the day it took office has awakened and figuratively said, hey, maybe closing down these refining operations isnt such a great idea after all. New York gas stations, for example, charged an average of $3.68 per gallon as of Monday, according to AAA. Unless otherwise stated, photos Big Stock Photography Dreamstime Photos Google Maps Thompson Reuters. . That's left the country unable to meet its fuel needs as more people are commuting, traveling and driving as they emerge from the throes of the pandemic. In one particularly unusual move, India's Reliance Industries said it would simply sell the crude oil that it had in transit at sea, rather than allowing the cargo to arrive at its refineries. Reports also came in on Monday that Valeros Houston refinery was flaringa safety event used to manage excess material. On Thursday, Lyondellbasell Industries announced its plans to shut down its Houston Oil refinery by 2023 permanently. LyondellBasell announced in April that it would shut the refinery by 2024 due to the heavy financial burden of upgrading its more than 100-year-old infrastructure, Barrons reported at the time. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. The Biden administration has reportedly considered addressing the declining refining capacity, but has yet to act on the issue. Of course, COVID and the government lockdowns also had a major impact, as they basically shut down the US economy. The United States hasn't seen a major new refinery built since the 1970s. Globally, some 2.13 million bpd in refining capacity has been shut down since 2020. In other words, governments and/or the green agenda are the primary reason for the expensive gas. Francisco Blanch, head of commodities research at Bank of America, points out that the country is still heavily reliant on gasoline despite those goals. President Joe Biden has repeatedly slammed the U.S. fossil fuel industry for allegedly profiting while Americans are suffering from high gas prices, and he resists expanding refinery capacity, even as he continues to hobble producers, including delaying lease . In the interim, the company will continue serving the fuels market, which is expected to remain strong near-term.. Refineries Shutting Down. According to a report from Reuters, published in June of this year, the refining capacity across the US fell by 4.5% during 2020, the largest drop since the recession of 2012. Indeed, Galp halted operations at the Matosinhos oil refinery complex in Portugal from early 2021, citing a 16% drop in throughput in the fourth quarter of 2020. Over 2021, several refinery complexes saw workforce lay-offs - some as high as 60%. Additionally, refining investment is still underway. The Paramount refinery began operating in the 1930s. "The narrative until today was that we were going to be driving electric vehicles by the end of the year. At Separo weve spent many years earning a global reputation for the excellence and flexibility of our tank cleaning and recovery services. Marathon has not given any indication on when the refinerythe second largest in the United Statesmight restart. The company is converting the Martinez refinery to produce 260 million gallons per year of renewable diesel starting in 2023. We average between 2 and 3 posts a day. The refinery became unprofitable as COVID-19 spread across the United States. Well, it turns out a lot of people need refined products," says Blanch. The refinery processes 268,000 barrels per day (bpd) of oil and produces 92,600 bpd of diesel fuel, 89,000 bpd of gasoline and 44,500 bpd of jet fuel. Neste, having ceased refining operations at the Naantali refinery in Finland, announced plans to develop the Porvoo refinery in their own words - "towards co-processing renewable and circular raw materials.". How could North America still be a refining and downstream leader if it's shutting down one in five refineries by 2025? In addition to the shutdown of refineries, at least two are set to be converted to biofuel production. Once the assembly line at the Toledo North factory shuts down, Chrysler will begin preparing the plant for the Liberty's successor, scheduled to go on sale next spring. 2022 Welcome: Official Visitors Guide to Greater Baton Rouge. Bidens letter does appear to recognize that the U.S. refining industry is already currently operating at near-full capacity as the industry has worked overtime to meet consumer demand for its products. Its forward progress could shut down that regions refineries. This needs to last me for a couple weeks.. By Alex Kimani - Dec 29, 2022, 11:00 AM CST. So, as was the case throughout the 1970s, the industry and consumers are left to wait to see what disastrous and ineffective action to control the market this President and his inept team might take next. The previous weeks average was $5.64, according to AAA. The result was that five refineries across the US shut down permanently. Russia's invasion of Ukraine has helped drive gasoline prices to new heights, and last week, Marketplace's Andy Uhler wrote that some U.S. refineries shut down for good after prices hit rock . Of course, high demand combined with high prices has led oil companies to make big profits. Learn how your comment data is processed. The refinery processes 268,000 barrels per day (bpd) of oil and produces 92,600 bpd of diesel fuel, 89,000 bpd of gasoline and 44,500 bpd of jet fuel. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. U.S. District Judge Terry A. Doughty in Louisiana struck down Biden's Jan. 27, 2021, executive order in June, dealing a major blow to the president's plans to cut greenhouse gas emissions from . Massive Oil Refinery On Track To Shut Down Amid Fuel Supply Shortages, Record Prices. LyondellBasell will be closing its Houston refinery and exiting the refining industry, according to a filing with the Securities and Exchange Commission (SEC). Weve written in the past about the repurposing of decommissioned oil and gas rigs as geothermal energy sites, and the redevelopment of oil refineries that are surplus to requirements follows the same pattern older, environmentally damaging infrastructure being retained thanks to the role it can play in supplying the environmentally friendlier energy of the future. No portions of this website may be reproduced, retransmitted, copied, or republished without expressed written consent from Shore News Media & Marketing, LLC. It occurred at the Richmond-based Chevron Richmond Refinery, which reportedly experienced power problems. The Midwest is also seeing supply constraints . Some of these refineries that shut down in 2020 "will become terminals, some of them will become renewable diesel or biofuel plants," Israel added. The national average price of gasoline surpassed $5 a gallon for the first time ever this month. The industrial landscape for oil refineries has been challenging of late, with the Covid-19 pandemic, It would be a fairly simple task to produce predictions about the future of geothermal, Every day seems to bring news of another extreme weather event which might almost have. Hurricane Ida shuttered or curtailed output at six refineries in Louisiana that process 1.92 million barrels per day (bpd) of crude, around 12% of U.S. refining capacity. David Ryder/Getty Images The American Petroleum Institute (API), which represents most if not all of the companies targeted by the Presidents letter, responded with a letter of its own, offering a laundry list of 10 actions the administration could take to incentivize and enable the industry to start to reverse the capacity shortage. HollyFrontier shut all units as of the end of August 2020 at its 48,000 barrels per day refinery in Cheyenne, Wyoming. According to the International Energy Agency (IEA . The refinery had already been idle for a decade before restart. When a recent Emerson poll asked Americans why they thought gas prices were so high: READ: Survey: Plurality Blame Joe Biden for High Gas Prices, RELATED: Biden Presses Oil Industry to Increase Production as Refineries Already Running at Full Capacity, Pingback: Eleven US gas refineries closed over the past 2 years OpentheWord.org New Human New Earth Communities. The obvious answer is to convert what was once an oil refinery into an oil terminal. En cliquant sur Accepter tout, vous acceptez que Yahoo et nos partenaires traitent vos informations personnelles et utilisent des technologies telles que les cookies pour afficher des publicits et des contenus personnaliss, et des fins de mesure des publicits et des contenus, dtude des audiences et de dveloppement de produit. A key Texas petroleum refinery that produces more than 200,000 barrels of fuel per day is facing a premature shutdown that could increase pressure on domestic fuel supplies. Some refiners threw in the towel. Major refinery operators have largely opted to upgrade facilities rather than construct new greenfield plants because of the projected fuel demand decline in coming years and lengthy regulatory . ExxonMobil's profit in the first quarter more than doubled from a year earlier. The long term aim is for the company to achieve carbon neutrality by 2050. Fire smolders at an oil refinery that triggered several large explosions at the Philadelphia Energy Solutions Refining Complex on June 21, 2019. In Germany, the Heide refinery has reduced staff numbers by 106 positions, but is looking to the future with confidence due to plans to change the business model of the plant to concentrate on the production of green hydrogen. Bidens intemperate outburst at ExxonMobil last week and todays letter indicates Mr. Yergins fears were well-founded. The Department of Energy didnt respond to a request for comment from TheDCNF. For licensing opportunities of our original content, please contact Daily Caller News Foundation, Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher thatcan provide a large audience. Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. According to our annual Refinery Capacity Report, 2021 was the second consecutive year of decreasing refinery capacity. Cinquegrana from Oil Price Information Service says that from the refiners' perspective, it doesn't make financial sense to invest in additional oil refining given the broader transition. at its modules plant in Toledo.The plant built the one millionth Fiat 500 in November 2012. Editing by Nick Zieminski, Exclusive: Biden administration to move on Midwest ethanol-blended gasoline rule this week -sources, Greta Thunberg detained by Norway police during pro-Sami protest, Norway's Equinor nears deal to buy Suncor's UK oilfields, Dollar Tree sees weak 2023 profit as costs mount, shoppers curb spending, EU silence over Pfizer COVID contract talks is problem that won't go away -watchdog, Russian internet speeds drop on hardware shortage, research finds, Kohl's swings to surprise loss as margins crumble on steep discounts, Enbridge to buy US Gulf Coast gas storage facility for $335 million, Exclusive news, data and analytics for financial market professionals. 2008-2023 - Shore News Media & Marketing Ltd. Co. All rights reserved. With the U.S. blocking new purchases of Russian oil, the White House, Republicans and the oil industry are engaged in a disagreement over whether the administration has hampered domestic oil. The 50-year-old refinery was severely damaged after several feet of water flooded it during the storm. Canadian integrated oil company Suncor Energy Inc. (NYSE: SU) has revealed that extreme weather including multiple fires have forced the company to . Most of the refinery closures occurred in western countries, the data showed. Fire broke out in the early morning that triggered a vat of butane to ignite with an explosion so large that it was detected from space. Staples says that if the federal land ban continues, Texas is set to lose 120,000 jobs and $65 million in revenue by 2022. The drop in capacity was driven by a 13% drop in gasoline consumption, and prices for gasoline and diesel hit a four year low. Refiners' prices on those fuels - $250 to $280 per barrel - are closer to what consumers pay, Daniel Milan, managing partner at. Refineries will receive a maximum payment of 1.8 cents per litre when the margin they make per barrel of oil falls to $7.30. Denton Cinquegrana, chief oil analyst with the Maryland-based Oil Price Information Service, wouldnt rule that out, but he cautioned that fuel prices tend to be unpredictable. CRONIN: That's Patrick. The payment will decline to zero if margins increase to $10.20 per barrel. Individuals should consider whether they can afford the risks associated to trading. Our Standards: The Thomson Reuters Trust Principles. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); This site uses Akismet to reduce spam. Given the highly-ideological nature of this administration and the fact that most of APIs suggestions would conflict with Bidens Green New Deal-based agenda, most if not all of them are likely to fall on deaf ears. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. All quotes delayed a minimum of 15 minutes. About three weeks ago, gas at the Safeway on Mendocino Avenue was $4.94 per gallon. read more. Overall, its throughput in Q3 was 1% up on the year at 1.225 million b/d, but 29% down from 2019. Given that the recent COP26 committed governments around the world to measures which would hit targets at or around 2 degrees Celsius depending upon interpretations of the various conditional and unconditional commitments the direction of travel identified in 2017 has clearly remained the same and has, if anything, accelerated. SALT LAKE CITY, UT - MAY 24: A driver unloads raw crude oil from his tanker to process into gas at Marathon Refinery on May 24, 2022 in Salt Lake City, Utah. "When you're losing money on doing it, what do you do? "At a time of war, refinery profit margins well above normal being passed directly onto American families are not acceptable," the president wrote in a letter to the heads of seven oil companies earlier this month. Trading and investing carries a high risk of losing money rapidly due to leverage. Five refineries have shut down in the past two years, reducing the nation's refining capacity by about 5% and eliminating more than 1 million barrels of fuel per day from the market, leaving the remaining facilities straining to meet demand. Global refining, which is vital for producing fuels like gasoline and diesel, decreased by 1.4 million barrels a day between 2019 and the first quarter of 2022, according to the International Energy Agency. This would be the latest step in wider moves to shift the company as a whole onto a more environmentally sustainable footing, with two other refineries in Italy already having undergone a similar conversion. Until now, California fuel costs followed worldwide trends. All rights reserved. TOLEDO, Ohio (WTVG) - The company operating a pipeline serving Midwest refineries says it's ignoring an order by Michigan's governor to shut down as she threatens to go after the company's. Shell planned to try to divest the refinery as it considers closing facilities it cannot sell, the company told investors. Sonoma Countys average on Monday was $6.03 per gallon, which was outpacing Californias overall average of $5.80 per gallon. Valeros (NYSE: VLO) Texas City 225,000 bpd refinery has also shut down. President Biden and Big Oil are at each other's throats. You can reach Staff Writer Colin Atagi at colin.atagi@pressdemocrat.com. Not all of those refineries have come back online. These are the refiners that have closed or cut capacity: Lyondell said in April of 2022 that it would permanently shut the refinery by year-end 2023, as it was unable to find a buyer and did not want to invest to keep the facility open. All defendants in crime reports are presumed innocent until proven guilty. Education: BA, Marquette University. Since the start of the pandemic, statistics related to Covid-19 hospitalizations in the world "only got worse month by month . De Haan added that one wild card could be Hurricane Ian, which, as of Monday, was approaching the Gulf Coast. The president urged oil executives to increase the supply of gasoline and other refined products, and to drill for more oil in a bid to bring gas prices down. The reasons for those closures are due primarily to governments. Contrary to claims from Trump and other Republicans, Biden has not "shut down" American energy: US crude oil production in Biden's first year was higher than in each of Trump's first two years. The materials provided on this Web site are for informational and educational purposes only and are not intended to provide tax, legal, or investment advice. Like Marathon, Valero has not given any indication when the refinery will be back up. HOUSTON, Texas (KTRK) -- LyondellBasell is leaving the refining business. There's just fewer refiners in the U.S. today than a couple of years ago. Eni is evaluating the conversion of the Livorno refinery in Italy into a biorefinery. A Philadelphia refinery, one of the largest in the country, was rocked by explosions a few months before the pandemic. if(window.innerWidth<=1023){var write_html='