Report: Biden Shuts Down Domestic Oil and Gas Supplies, Calls for More Production. U.S. refineries are already going gangbusters right now. FCA is shutting down part of its massive Toledo manufacturing . , 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. CAPACITY: 161,000 bpd (Martinez); 27,000 bpd (Gallup). Some of its been very policy-driven and companies decided that it wasnt worth it to keep operating those assets.. "I think the refining executives say, well, looks like the writing's on the wall," Cinquegrana says. hide caption, PETALUMA, CALIFORNIA - MAY 18: A customer pumps gas into their car at a gas station on May 18, 2022 in Petaluma, California. 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. Since the start of the pandemic, statistics related to Covid-19 hospitalizations in the world "only got worse month by month . 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. 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. Our Standards: The Thomson Reuters Trust Principles. 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. Some refineries shuttered during the pandemic-induced recession in 2020, when demand for gasoline took a nosedive. . Some refiners threw in the towel. The previous weeks average was $5.64, according to AAA. Information about your device and internet connection, like your IP address, Browsing and search activity while using Yahoo websites and apps. 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 . For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org. hide caption. 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. Diesel fuel supplies have hit all-time lows on the East Coast and gasoline prices have soared to multiple records in recent weeks. hide caption, 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. More than 1 million barrels a day of the country's oil refining capacity or about 5% overall has shut since the beginning of the pandemic. 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. 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 June 17 (Reuters) - Since the onset of the global pandemic, the United States has lost nearly 1 million barrels per day of oil refining capacity, with more set to be shuttered in the next few years. 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. All defendants in crime reports are presumed innocent until proven guilty. In addition to the shutdown of refineries, at least two are set to be converted to biofuel production. There's just fewer refiners in the U.S. today than a couple of years ago. Valeros (NYSE: VLO) Texas City 225,000 bpd refinery has also shut down. 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. The Golden State is bearing the brunt of these shutdowns, which are triggering a steep uptick in the cost of a gallon of regular unleaded fuel. "When you're losing money on doing it, what do you do? So President Biden wants them to do more to bring down the price of gasoline. Search Posts. At Separo weve spent many years earning a global reputation for the excellence and flexibility of our tank cleaning and recovery services. You stop making it. But the continued decline in domestic refinery capacity could signal long-term domestic fuel supply shortfall, Reuters reported. The report was published by environment think-tank Carbon Tracker, Swedish investment fund AP7 and Danish pension fund PKA, and while the environmental think-tank might be expected to lean heavily toward predicting a bleak future for oil refining, the investment and pension fund are merely offering a clear-eyed assessment of where they think investors would or wouldnt be wise to put their money. They definitely cannot talk to each other about their production time. Some of these refineries that shut down in 2020 "will become terminals, some of them will become renewable diesel or biofuel plants," Israel added. 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. No off-topic remarks. Get exclusive content only available to INSIDERS. Shutdowns, or at. 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. Like Marathon, Valero has not given any indication when the refinery will be back up. The company is converting the Martinez refinery to produce 260 million gallons per year of renewable diesel starting in 2023. US governments accomplished this through various methods, including increasingly restrictive environmental regulations. Cinquegrana said only one of the four California refinery shutdowns was unplanned. (Photo by Justin Sullivan/Getty Images) One refinery is set to come back online in . See here for a complete list of exchanges and delays. Monday, June 20, 2022 Industry Why are refineries closing amid oil price windfall? No portions of this website may be reproduced, retransmitted, copied, or republished without expressed written consent from Shore News Media & Marketing, LLC. In 2011, the refinery was idled. The oil company's Santa Maria Refinery has about 110 . 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. Copyright 2023 Separo. Four concurrent production shutdowns in California is unfortunate timing, but its impossible for refineries to schedule maintenance around each other, said Severin Borenstein, a UC Berkeley energy economist. About three weeks ago, gas at the Safeway on Mendocino Avenue was $4.94 per gallon. While the Biden administration says market manipulation by Big Oil is behind the shortage of refined fuel right now, the . 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. read more. (LogOut/ The long term aim is for the company to achieve carbon neutrality by 2050. During the past week alone, according to some industry insiders, prices at the pump have jumped by more than 50 cents. Friday, February 11, 2022 3:56 am. }. They're operating above 90% capacity according to the Energy Information Administration, and expected to run at 95% for the rest of the summer. When you have a power issue, that can sometimes be really difficult to operate around, he said. 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. France's TotalEnergies reported higher refinery throughput in Q3 amid improved margins. Pour en savoir plus sur notre utilisation de vos informations, veuillez consulter notre Politique relative la vie prive et notre Politique en matire de cookies. This proved not to be the case in February of this year, however, when unseasonably freakish arctic weather temperatures dropped as low as -13C in Austin, -15C in Dallas and -23C in Amarillo led to the largest refineries in North America having to be shut down across the state. When an existing oil refinery becomes defunct and needs to be repurposed, one of the over-riding priorities is to deal with the remaining waste and pollution left by what have often been decades spent refining crude oil. 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%. Elsewhere in the world, capacity has shrunk by 2.13. We average between 2 and 3 posts a day. Previously worked at Euromoney Institutional Investor and CNN. HOUSTON, Texas (KTRK) -- LyondellBasell is leaving the refining business. I filled up because I dont know if its going to get cheaper anytime soon. hide caption. Feb 7, 2022 (Bloomberg) When the second-largest U.S. refinery shuts down unexpectedly with no clarity as to when operations will return to normal, it could have an outsized impact on a market already squeezed for supplies.Marathon Petroleum Corp.'s 593,000 barrel-a-day Galveston Bay refinery in Texas City, Texas, got knocked out of 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. ExxonMobil's profit in the first quarter more than doubled from a year earlier. Those, however, are specific to the West Coast and gas prices across the rest of the country are in better shape. Covid and oil demand took divergent directions in mid-2020. EMBED <> More Videos LyondellBasell plans to shut down its Houston refinery at the end of 2023, impacting 550 jobs. Change). Unless otherwise stated, photos Big Stock Photography Dreamstime Photos Google Maps Thompson Reuters. Shell planned to try to divest the refinery as it considers closing facilities it cannot sell, the company told investors. 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. You can change your choices at any time by visiting your privacy controls. No profanity, hate speech or personal attacks. HollyFrontier Corp said in June 2020 it would convert its Cheyenne refinery into a renewable diesel plant that would produce 6,000 bpd of renewable diesel. All rights reserved. "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. New York gas stations, for example, charged an average of $3.68 per gallon as of Monday, according to AAA. 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The president earlier this month singled out ExxonMobil, saying the company "made more money than God this year.". 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. Valero's (NYSE: VLO) Texas City 225,000 bpd refinery has also shut down. 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. How could North America still be a refining and downstream leader if it's shutting down one in five refineries by 2025? if(window.innerWidth<=1023){var write_html='