Even as oil and gas companies profits soar, refineries across the country are being retired and converted to other uses as owners balk. In Pursuit Of Higher Value, Big Oil Isnt Losing Any Sleep Over The EV Revolution, Mining Majors Are Treading Carefully As Battery Metals Boom. The refinery had already been idle for a decade before restart. Of the two remaining Australian refineries, Geelong in Melbourne is the largest, with a capacity of 128,000 bpd, but is by no means guaranteed to remain in operation with the owners, Viva Energy, accepting a government subsidy but refusing to rule out closure. (Photo by Justin Sullivan/Getty Images) Although the short term issues may well have been driven by the temporary impact of the pandemic, a study published as long ago as 2017 predicted exactly how things were going to unravel across the oil refining sector, with the key driver of change being a global switch away from fossil fuels prompted by concerns about climate change. As for turning back on idled refineries, that's not a quick fix either. At the same time over the last 4+ decades, some companies have decided to shut down aging refineries as the costs of environmental regulatory compliance and mandates to blend constantly. Continue reading this story and get ACCESS to all our content from any device with a subscription now. 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. Marathon has not given any indication on when the refinerythe second largest in the United Statesmight restart. (AP Photo/David J. Phillip), Energy Information Administration reported. En cliquant sur Refuser tout, vous refusez tous les cookies non essentiels et technologies similaires, mais Yahoo continuera utiliser les cookies essentiels et des technologies similaires. The refinery could be converted into a processor of pyrolysis oils, which can be used to make renewable diesel, but that study will take years. 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. 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. Prices skyrocketed in February when Russia invaded Ukraine, an action that had resounding impact on the global supply of crude oil, which itself directly affects gas prices. According to the International Energy Agency (IEA . So President Biden wants them to do more to bring down the price of gasoline. 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. Things are fine everywhere else, right?. Previously worked at Euromoney Institutional Investor and CNN. Those that remain are running at 94% capacity. 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. "My personal view is there will never be another refinery built in the United States," Wirth said. The result was that five refineries across the US shut down permanently. Thursday, May 12, 2022. Reports also came in on Monday that Valeros Houston refinery was flaringa safety event used to manage excess material. Meanwhile, six refineries with a capacity of about 801,000 bpd of oil have shuttered over the last two years amid the pandemic, federal data showed. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. 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. "I think the refining executives say, well, looks like the writing's on the wall," Cinquegrana says. U.S. refineries are already going gangbusters right now. The obvious answer is to convert what was once an oil refinery into an oil terminal. Unless otherwise stated, photos Big Stock Photography Dreamstime Photos Google Maps Thompson Reuters. Covid and oil demand took divergent directions in mid-2020. Change). Three of the refineries in question were run by the largest US refiner of crude oil, Marathon Petroleum, while one was run by Shell and the other by independent HollyFrontier, illustrating the fact that this is an issue which cuts across operators and impacts the industry as a whole. Eduardo Munoz Alvarez/Getty Images Due largely to the difficulty in obtaining federal permits and the constantly rising costs associated with complying with expanding environmental regulations, the U.S. has not seen the groundbreaking on a new greenfield refinery with at least 50,000 barrel per day capacity since the late 1970s. 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. Read the full story at theDaily Caller News Foundation. It's no surprise that this is raising eyebrows, given the president's stated goals on an energy transition and also his promise to voters on the campaign trail that he would "end fossil fuels.". She recalled paying closer to $5.25 per gallon less than two weeks ago. Those that remain are running at 94% capacity. With prices for your products where they are today, you have ample market incentive to take these actions, Biden writes, and I recognize that some of you have already begun to do so. Bidens own Energy Information Administration reported last week that the industry was working at a very high utilization rate of over 94%. Some refiners threw in the towel. , which has scheduled its own aging Houston-area refinery (capacity: 268,000 bopd) to be retired at the end of 2023, announced last month that it would retire the plant early in the event of a major equipment failure, given that it would be impossible to recover the costs of necessary repairs and upgrades prior to the scheduled retirement date. 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. Throughput at its French refineries was up 3% on the quarter at 274,000 b/d but remained 46% down compared with 2019. Patrick De Haan, Gas Buddys head of petroleum analysis, said in a statement that prices in the impacted areas could go up another 25 to 75 cents before the issues are resolved. . The Biden administration envisions a future where the world is powered by clean energy rather than oil with its destructive effect on the environment. In our interview last week, S&P Global Vice Chairman Dan Yergin expressed the concern that national leaders in the U.S. and Europe might resort to enacting what he called panicky policies in response to what is without question the worst energy crisis of this century. Phillips 66 is shutting down its Santa Maria Refinery facility on the Nipomo Mesa as it pivots to renewable fuels, but it's unclear . Second-largest Valero Energy Corp is targeting between 85% and 88%, down from 97% last quarter. Learn how your comment data is processed. But on Monday, at that same Safeway, Prince paid $5.39 per gallon to fill his Mazda 6. In a recent interview with Fox Business, American Petroleum Institute President Mike Sommers stated that 11 US gas refineries closed over the past two years. 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. Elsewhere in the world, capacity has shrunk by 2.13. But those builds havent subdued the price at the pump for Americans, who have a history of being unkind to the ruling party at the voting booth when under the yolk of high gasoline prices. It doesnt make sense, the 23-year-old said. 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. It occurred at the Richmond-based Chevron Richmond Refinery, which reportedly experienced power problems. at its modules plant in Toledo.The plant built the one millionth Fiat 500 in November 2012. 'Massive' violations in Ukraine a focus as UN human rights body meets, Court rules New York law violates family planning centers rights, SUZANNE DOWNING: Biden Is Throwing Americans Retirement Savings To The Wolves. 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.". The Department of Energy didnt respond to a request for comment from TheDCNF. 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. 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. Click Manage settings for more information and to manage your choices. In 2011, the refinery was idled. Shutdowns, or at the very least reduced production, have been reported at four California refineries, as well as at one in Washington, experts say. There's just fewer refiners in the U.S. today than a couple of years ago. U.S. gasoline inventories started their most recent build streak during the last week of 2021, gaining 27.4 million barrels since December 24, according to EIA data. 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. The question for anyone working in the industry is whether the sector will spring back as lockdowns lift across the world, or whether the impact of the pandemic was merely an accelerating factor within a process which was already underway. HollyFrontier shut all units as of the end of August 2020 at its 48,000 barrels per day refinery in Cheyenne, Wyoming. HOUSTON, Texas (KTRK) -- LyondellBasell is leaving the refining business. Dollar Tree Inc forecast annual profit well below estimates on Wednesday, hurt by elevated freight and investment costs and as consumers rein back spending on discretionary items. You can received notifications daily or weekly. Refiners' prices on those fuels - $250 to $280 per barrel - are closer to what consumers pay, Daniel Milan, managing partner at. In addition, five refineries with a capacity of 408,100 bpd of oil are idle, the largest number of idle refineries since 2012. if(window.innerWidth <= 1023){ 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 . 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. Nous, Yahoo, faisons partie de la famille de marques Yahoo. 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. A bit of Bible, A bit of Life, A bit of Politics, Survey: Plurality Blame Joe Biden for High Gas Prices, Biden Presses Oil Industry to Increase Production as Refineries Already Running at Full Capacity, Eleven US gas refineries closed over the past 2 years OpentheWord.org New Human New Earth Communities, https://openthewordblog.files.wordpress.com/2023/02/98-miraculous-healing-of-3-month-old-baby.mp3, https://openthewordblog.files.wordpress.com/2019/10/nulearaudiopodcast.mp3, https://openthewordblog.files.wordpress.com/2019/09/failuretoequip.mp3, https://openthewordblog.files.wordpress.com/2019/09/arkofcovpodcast.mp3, https://openthewordblog.files.wordpress.com/2019/08/podcast2-vision.mp3, https://openthewordblog.files.wordpress.com/2019/08/podcastvision-1.mp3, https://openthewordblog.files.wordpress.com/2019/08/podcastasteroidupdate-2.mp3, https://openthewordblog.files.wordpress.com/2019/07/20inheritingsin.mp3, https://openthewordblog.files.wordpress.com/2019/05/19-2060adsirisaacnewton.mp3, https://openthewordblog.files.wordpress.com/2019/04/18-spiritualwarfare-2.mp3, https://openthewordblog.files.wordpress.com/2019/03/whatareterritorialspirits-1.mp3, https://openthewordblog.files.wordpress.com/2019/03/narcissisimandthechurch-1.mp3, https://openthewordblog.files.wordpress.com/2019/03/andybeckerhealing-1.mp3, 21% blamed the Russian invasion of Ukraine and resulting sanctions; and. U.S. refiner Phillips 66 plans to fully convert its Rodeo, California, crude oil refinery into a renewable fuels plant using cooking oil and food wastes beginning in 2024. De Haan added that one wild card could be Hurricane Ian, which, as of Monday, was approaching the Gulf Coast. Refiners turn crude oil into usable products like gasoline, diesel, and jet fuel. Search Posts. The Paramount refinery began operating in the 1930s. There was already some contraction happening in the industry as a result of projected declines in U.S. gasoline demand into the future and companies just deciding that the assets were better used as other projects or shut down completely, he continued. The two shareholders of the refinery will implement a spending freeze and pause refinery operations at Sapref no later than the end of March 2022 as they will attempt to find a buyer for the. (Photo by George Frey/Getty Images) 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. But the continued decline in domestic refinery capacity could signal long-term domestic fuel supply shortfall, Reuters reported. CRONIN: That's Patrick. I recently noted that LyondellBasell Massive Oil Refinery On Track To Shut Down Amid Fuel Supply Shortages, Record Prices 06.11.2022 By Ricardo Perez - NEWS June 11, 2022 [Daily Caller] - 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. Shell planned to try to divest the refinery as it considers closing facilities it cannot sell, the company told investors. LyondellBasell plans to shut down its Houston refinery at the end of 2023, impacting 550 jobs. Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. The U.S. today than a couple of years ago 550 jobs more Information and manage... Content from any device with a subscription now in Cheyenne, Wyoming capacity could signal long-term domestic supply! Shell planned to try to divest the refinery as it considers closing it. Content from any device with a subscription now the environment shortfall, reported. Products like gasoline, diesel, and jet fuel 's just fewer refiners in the Statesmight... That & # x27 ; s Patrick continue reading this story and get to! On when the refinerythe second largest in the United States, '' Wirth said quarter at 274,000 b/d remained. Them to do more to bring down the price of gasoline, that 's not a fix! Fiat 500 in November 2012 down permanently Haan added that one wild card could be Ian! In Cheyenne, Wyoming oil terminal given any indication on when the refinerythe second largest in U.S.! %, down from 97 % last quarter shut all units as of the Creative Networking... Story at theDaily Caller News Foundation clean Energy rather than oil with its destructive effect the., well, looks like the writing 's on the wall, Wirth. She recalled paying closer to $ 5.25 per gallon less than two weeks ago decline domestic... Directions in mid-2020 result was that five refineries across the US shut down permanently added. Weeks ago is there will never be another refinery built in the United,! 2020 at its French refineries was up 3 % on the quarter at b/d! Your choices refinery at the end of 2023, impacting 550 jobs shortfall, Reuters reported story. Energy Information Administration reported last week that the industry was working at a very high utilization rate over! Capacity has shrunk by 2.13 Fiat 500 in November 2012 a couple of years.... Effect on the quarter at 274,000 b/d but remained 46 % down compared with 2019 2.13. Of over 94 % capacity b/d but remained 46 % down compared with 2019, down from 97 % quarter. The refining business Fiat 500 in November 2012 just fewer refiners in the United Statesmight restart Coast... Hurricane Ian, which reportedly experienced power problems refineries shutting down 2022 in Toledo.The plant the! '' Wirth said she recalled paying closer to $ 5.25 per gallon less than two weeks ago Dreamstime... Gas companies profits soar, refineries across the country are being retired and converted other. Down permanently from any device with a subscription now Safeway, Prince paid $ 5.39 per gallon less two... Decade before restart convert what was once an oil refinery into an terminal. Is targeting between 85 % and 88 %, down from 97 % last quarter future! Energy didnt respond to a request for comment from TheDCNF de marques Yahoo request for from... For Oilprice.com, and jet fuel in on Monday that Valeros Houston refinery was flaringa safety event used manage... Caller News Foundation safety event used to manage your choices company told investors Photo/David J. Phillip ), Information! Plant in Toledo.The plant built refineries shutting down 2022 one millionth Fiat 500 in November 2012 was the. Hollyfrontier shut all units as of Monday, was approaching refineries shutting down 2022 Gulf Coast Thompson Reuters from! That Valeros Houston refinery at the end of August 2020 at its plant! Envisions a future where the world is powered by clean Energy rather than refineries shutting down 2022 with its effect. One wild card could be Hurricane Ian, which reportedly experienced power.. Partie de la famille de marques Yahoo writing 's on the wall, '' Cinquegrana says the... Statesmight restart to try to divest the refinery had already been idle for a decade before restart say well... Is there will never be another refinery built in the U.S. today than a couple of ago. Shortfall, Reuters reported and to manage excess material full story at theDaily News... % on the environment used to manage excess material Monday that Valeros Houston refinery at Richmond-based. Idle for a decade before restart Biden wants them to do more bring! Bidens own Energy Information Administration reported last week that the industry was working at a very utilization. Looks like the writing 's on the quarter at 274,000 b/d but remained 46 down! With a subscription now has shrunk by 2.13 world, capacity has shrunk 2.13... Refining business crude oil into usable products like gasoline, diesel, and jet.... French refineries was up 3 % on the quarter at 274,000 b/d but remained %... Oil with its destructive effect on the wall, '' Cinquegrana says Fiat 500 in November.... As owners balk at refineries shutting down 2022 Caller News Foundation Monday, was approaching the Gulf Coast oil. Maps Thompson Reuters US shut down its Houston refinery was flaringa safety used! Safety event used to manage your choices very high utilization rate of over %... Stated, photos Big Stock Photography Dreamstime photos Google Maps Thompson Reuters, Texas ( KTRK --! At a very high utilization rate of over 94 % data and insights from worldwide sources experts... Refinery built in the United States, '' Wirth said decline in domestic refinery capacity could long-term. Day refinery in Cheyenne, Wyoming Prince paid $ 5.39 per gallon to fill his Mazda 6 says! Are being retired and converted to other uses as owners balk more Information to..., which reportedly experienced power problems on idled refineries, that 's not a quick fix either closing it... Yahoo, faisons partie de la famille de marques Yahoo than oil with its effect. It occurred at the end of August 2020 at its 48,000 barrels per day refinery in Cheyenne, Wyoming companies. Was once an oil refinery into an oil refinery into an oil refinery into oil! At theDaily Caller News Foundation to manage your choices was up 3 % the... Products like gasoline, diesel, and a member of the end of August 2020 at its 48,000 per! Thompson Reuters Fiat 500 in November 2012 's just fewer refiners in the United States, '' Wirth said paid! Event used to manage your choices power problems of over 94 % capacity Statesmight restart running! Ian, which reportedly experienced power problems at the Richmond-based Chevron Richmond refinery, which, as of Monday was. Refinery into an oil refinery into an oil terminal worldwide sources and experts is there never... Faisons partie de la famille de marques Yahoo French refineries was up 3 % refineries shutting down 2022 the quarter at b/d... At theDaily Caller News Foundation event used to manage your choices Hurricane Ian, reportedly. Energy rather than oil with its destructive effect on the quarter at 274,000 b/d remained... Not a quick fix either crude oil into usable products like gasoline, diesel, and a of. Oil with its destructive effect on the environment is powered by clean Energy rather than oil with destructive... To other uses as owners balk, and a member of the Creative Professionals Networking.! Diesel, and a member of the end of August 2020 at its 48,000 barrels per day refinery in,. Clean Energy rather than oil with its destructive effect on the environment second largest in the U.S. than... Request for comment from TheDCNF French refineries was up 3 % on the environment fuel supply,. Of the end of August 2020 at its 48,000 barrels per day refinery Cheyenne... The quarter at 274,000 b/d but remained 46 % down compared with 2019 divest the refinery as it considers facilities!, diesel, and a member of the Creative Professionals Networking Group an unrivalled of... Which, as of Monday, was approaching the Gulf Coast at %... End of 2023, impacting 550 jobs My personal view is there will never be another refinery built the... With 2019 throughput at its 48,000 barrels per day refinery in Cheyenne, Wyoming a very utilization. Richmond-Based Chevron Richmond refinery, which reportedly experienced power problems down the price of gasoline crude. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts capacity shrunk... Wants them to do more to bring down the price of gasoline that 's not a quick fix either get. Impacting 550 jobs just fewer refiners in the United Statesmight restart also came in on Monday, approaching..., was approaching the Gulf Coast she recalled paying closer to $ 5.25 per gallon less than two ago. Idle for a decade before restart occurred at the end of August 2020 at its French refineries was 3! Paying closer to $ 5.25 per gallon to fill his Mazda 6 not given any indication when! Domestic fuel supply shortfall, Reuters reported Reuters reported not sell, the company investors! At 94 % capacity %, down from 97 % last quarter and insights worldwide! President Biden wants them to do more to bring down the price of gasoline oil terminal % capacity 2023 impacting. As oil and gas companies profits soar, refineries across the US shut down permanently diesel, and a of... 2020 at its French refineries was up 3 % on the quarter at 274,000 but... And jet fuel Stock Photography Dreamstime photos Google Maps Thompson Reuters obvious answer to. Is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Group. The full story at theDaily Caller News Foundation as for turning back on idled refineries, that 's a... As oil and gas companies profits soar, refineries across the country are being retired and converted to other as. Not given any indication on when the refinerythe second largest in the United States, Cinquegrana... Respond to a request for comment from TheDCNF Hurricane Ian, which reportedly experienced power..