(LogOut/ hide caption, PETALUMA, CALIFORNIA - MAY 18: A customer pumps gas into their car at a gas station on May 18, 2022 in Petaluma, California. Reports on oil and energy, including refineries, markets and renewable fuels. Second-largest Valero Energy Corp is targeting between 85% and 88%, down from 97% last quarter. The Midwest is also seeing supply constraints . Elsewhere in the world, capacity has shrunk by 2.13. Get access to more than a decade of story archives. CAPACITY: 161,000 bpd (Martinez); 27,000 bpd (Gallup). 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. 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. She recalled paying closer to $5.25 per gallon less than two weeks ago. "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. When the pandemic hit and demand for oil evaporated during the recession, refineries took a big financial hit when the price of gasoline plummeted. 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. Refining capacity in the U.S. is about a million barrels a day below what it was prior to the pandemic. According to Gas Buddy, the online monitor that tracks fuel prices by community, Santa Rosas lowest-priced gas is being sold at the 7-Eleven on College Avenue, where regular unleaded was $5.29 per gallon, as of Monday. The result was that five refineries across the US shut down permanently. Report: Biden Shuts Down Domestic Oil and Gas Supplies, Calls for More Production. Both have been shut down. Refinery maintenance along the West Coast is being blamed for the sudden spike in the cost of gas across California after weeks of downward trending prices. The refinery has since been bulldozed. 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 . 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. Refineries Shutting Down South Africa is refining less crude oil and only two refineries remain operational as it has become increasingly expensive to operate refineries and more. Louisiana's 17 oil refineries account for nearly one-fifth of the nation's refining capacity, with the ability to process about 3.4 million barrels of crude oil per day, according to the . 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.". 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. Fill in your details below or click an icon to log in: You are commenting using your WordPress.com account. 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%. On Monday, a barrel of oil sold for as little as $76 the lowest since January but thats a reflection of worldwide trends as opposed to whats happening on the West Coast. The long term aim is for the company to achieve carbon neutrality by 2050. 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. 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. 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. HOUSTON, April 21, 2022 /PRNewswire/ -- LyondellBasell (NYSE: LYB) . As of Monday, his agency reported Santa Rosas average price for a gallon of regular unleaded fuel was $6. The drop in capacity was driven by a 13% drop in gasoline consumption, and prices for gasoline and diesel hit a four year low. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. 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. 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. In what is possibly his most irrational action yet related to energy policy, President Joe Biden on Wednesday lashed out at oil refiners for shutting down too much refining capacity in recent years. 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. At a time when gas prices are at the highest level in history, hurting regular Americans, he points out that Big Oil companies are enjoying record profits. 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. We will remove any comments or commenters that do not follow this commenting policy. See here for a complete list of exchanges and delays. 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. 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 COVID pandemic really drove down gasoline and diesel demand which accelerated some things that were already happening, Geoff Moody, the vice president of government relations at the American Fuel & Petrochemical Manufacturers, previously told TheDCNF. Refiners' prices on those fuels - $250 to $280 per barrel - are closer to what consumers pay, Daniel Milan, managing partner at. Some of these refineries that shut down in 2020 "will become terminals, some of them will become renewable diesel or biofuel plants," Israel added. Staples says that if the federal land ban continues, Texas is set to lose 120,000 jobs and $65 million in revenue by 2022. Globally, some 2.13 million bpd in refining capacity has been shut down since 2020. Those that remain are running at 94% capacity. 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 . But the continued decline in domestic refinery capacity could signal long-term domestic fuel supply shortfall, Reuters reported. About three weeks ago, gas at the Safeway on Mendocino Avenue was $4.94 per gallon. 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. Some refineries shuttered during the pandemic-induced recession in 2020, when demand for gasoline took a nosedive. Refineries transform that oil into products and sell those. The solutions we offer can be scaled up or down depending upon the size and scope of the refinery, and can play a key role in helping to ensure that the oil refineries of yesterday help to play a part in the green fuel revolution of tomorrow. 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. Phillips 66 announced in November 2021 that it would not reopen the Alliance refinery, which was shut in mid-August ahead of Hurricane Ida. 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. Underpinning the decisions not to reopen refineries is the fact that the U.S. is undergoing an energy transition from fossil fuels to renewables. It isnt as if these facilities have been idle. Gasoline Prices 26 Cents Lower Than Last Year, Russias Lukoil Looks To Sell Stake In Offshore Oil And Gas Field, Kazakhstan Could Suspend Natural Gas Exports Next Winter, Kazakh Oil Starts Flowing To Germany Via Russian Pipeline Network, Saudi Arabia Signs $400 Million Aid Package For Ukraine, Chinas Coal Plant Approvals Surged To A 7-Year High In 2022, Iranian Currency Drops To Record Low Against The U.S. Dollar, Oil Prices Dip As Traders Wait For Chinese Demand To Rebound, Academics: Russia Selling Oil Way Over Price Cap, Ecuador Calls Force Majeure On Almost All Of Its Oil Production, BOEM To Hold Oil, Gas Lease Sale On March 29, The U.S. Intensifies Sanctions Against Russia, U.S. LyondellBasell previously announced it will cease operations of the Houston Refinery no later than December 31, 2023. 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. 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 Houston Refinery is currently. The bottom line here is that this is a problem that has been a long time coming. Learn how your comment data is processed. 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. The United States hasn't seen a major new refinery built since the 1970s. This is a family newspaper, please use a kind and respectful tone. It has been largely driven by the federal governments own actions and it is one about which no one at the federal level has appeared to much care for more than 40 years now. The report predicted companies such as Chevron CVX.N, Royal Dutch Shell RDSa.L, France' Total TOTF.PA and China's largest refiner Sinopec could see profits from refining drop by 70%, a prediction based on commitments to limit global warming to 2 degrees Celsius, under which, according to the International Energy Agency, the demand for oil would drop by 23% between 2020 and 2035. 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. Some refineries shuttered during the pandemic-induced recession in 2020, when demand for gasoline took a nosedive. Like Marathon, Valero has not given any indication when the refinery will be back up. 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. 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. Of the three California refineries undergoing scheduled maintenance, one is in Benicia and the other two are in Los Angeles. 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 materials provided on this Web site are for informational and educational purposes only and are not intended to provide tax, legal, or investment advice. Valero's (NYSE: VLO) Texas City 225,000 bpd refinery has also shut down. It had been $5.64 last week. Find out more about how we use your information in our privacy policy and cookie policy. Given that the longer term direction of travel is away from oil and toward renewables, however, the more forward thinking companies are probably those which are pivoting their refinery sites toward renewable technologies. Some refiners threw in the towel. . Gas prices started skyrocketing following a raft of sanctions on Russian oil, after its invasion of Ukraine in February. Exacerbating these high gas prices is a huge shortage in refining capacity in the U.S., which isn't likely to be resolved any time soon. The same thing is happening across Europe, With Neste closing the Naantali refinery which has previously refined 55,000 barrels per day (bpd), and Gunvor closing the loss-making Antwerp refinery previously dealing with 115,000 bpd with no plans to reopen it if the market picks up. Not all of those refineries have come back online. Experts say ongoing fears of a recession had been pushing down gas prices on a global level during the past several months. PATRICK DE HAAN: There's been a tremendous challenge with the refineries being able to meet demand that has resurged as the economy continues to gain momentum post-COVID. LyondellBasell plans to shut down its Houston refinery at the end of 2023, impacting 550 jobs. Cinquegrana said only one of the four California refinery shutdowns was unplanned. The industry leader for online information for tax, accounting and finance professionals. Those, however, are specific to the West Coast and gas prices across the rest of the country are in better shape. Refiners turn crude oil into usable products like gasoline, diesel, and jet fuel. One refinery is set to come back online in . 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. In Louisiana, another refinery was wiped out by Hurricane Ida. }. 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. 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. 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. Of course, COVID and the government lockdowns also had a major impact, as they basically shut down the US economy. 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. 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. 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. 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. 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. How could North America still be a refining and downstream leader if it's shutting down one in five refineries by 2025? Sonoma Countys average on Monday was $6.03 per gallon, which was outpacing Californias overall average of $5.80 per gallon. The Biden administration envisions a future where the world is powered by clean energy rather than oil with its destructive effect on the environment. While gasoline prices continue to be a troubling political factor for the Biden Administration, the recent inclement weather in refinery country on the U.S. Gulf Coast has caused two major refineries to shut down. You can reach Staff Writer Colin Atagi at colin.atagi@pressdemocrat.com. The Paramount refinery began operating in the 1930s. It stopped petroleum refining operations but plans to resume operations in 2022 as a renewable diesel processing plant, which receives subsidies from the U.S. government. Even as oil and gas companies profits soar, refineries across the country are being retired and converted to other uses as owners balk. Get exclusive content only available to INSIDERS. The plant was sold to a Jamaican oil storage facility in December 2021. read more. No profanity, hate speech or personal attacks. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. 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. Overall, operating U.S. refineries had a capacity of about 17.7 million bpd of oil and produced about 9.5 million bpd of gasoline, 4.7 million bpd of diesel fuel and 1.3 million bpd of jet fuel in 2021. Massive Oil Refinery On Track To Shut Down Amid Fuel Supply Shortages, Record Prices Thomas Catenacci on June 7, 2022 UPDATE: This article has been updated to include comment from LyondellBasell Industries on its plans to cease operations in 2023. But this is a problem for which there are no quick remedies. 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. Stay tuned. (LogOut/ 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. if(window.innerWidth<=1023){var write_html='