The Midwest is also seeing supply constraints . The Environmental Protection Agency under President Joe Biden is set to abruptly issue a sweeping denial of economic hardship exemptions to the Renewable Fuel Standard (RFS) program from small oil refineries around the U.S., likely forcing one Texas refinery to go out of business at a time when American energy independence is desperately needed. "You're talking about a lot of money to get these refineries that are idled up and runningwhen I'm being told five years from now, we hope you don't exist," Cinquegrana says. Refiners turn crude oil into usable products like gasoline, diesel, and jet fuel. 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. 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. Learn how your comment data is processed. They said the numbers just didn't work, and closed up shop. Reports also came in on Monday. By 2022, EIA similarly forecasts global consumption of petroleum and liquid fuels to increase by 3.6 million b/d. 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. CRONIN: That's Patrick. Start Trading CFDs Over 2,200 Different Instruments, Germanys Natural Gas Bill Doubled In 2022 Despite Import Volumes Falling, Shells leadership considered ditching Europe. In Louisiana, another refinery was wiped out by Hurricane Ida. Our Standards: The Thomson Reuters Trust Principles. 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. Why are refineries closing amid oil price windfall? Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. One refinery is set to come back online in . The obvious answer is to convert what was once an oil refinery into an oil terminal. Just last Friday, in its response to Bidens intemperate attack during a speech at the Port of Los Angeles, ExxonMobil noted that it is in the process of expanding its own refining capacity in the U.S. by 250,000 bopd. Some refiners threw in the towel. I recently noted that LyondellBasell Both have been shut down. The Department of Energy didnt respond to a request for comment from TheDCNF. You stop making it. This needs to last me for a couple weeks.. 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. Even as oil and gas companies profits soar, refineries across the country are being retired and converted to other uses as owners balk. No profanity, hate speech or personal attacks. US President Joe Biden departs Marine One after, arriving in Washington, D.C., US, on Tuesday, June 14, 2022. 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 (LogOut/ Click to become an INSIDER for under $2.00 a week. Since the start of the pandemic, statistics related to Covid-19 hospitalizations in the world "only got worse month by month . 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. Justin Sullivan/Getty Images Over 2021, several refinery complexes saw workforce lay-offs - some as high as 60%. Change). 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. The refinery is among the top 25 largest-capacity facilities in the U.S., according to the Energy Information Administration. A Philadelphia refinery, one of the largest in the country, was rocked by explosions a few months before the pandemic. We, Yahoo, are part of the Yahoo family of brands. The reasons for those closures are due primarily to governments. 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. The evidence for the impact of the pandemic on the sector is widespread and undeniable. Fill in your details below or click an icon to log in: You are commenting using your WordPress.com account. 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. This is a family newspaper, please use a kind and respectful tone. "My personal view is there will never be another refinery built in the United States," Wirth said. US governments accomplished this through various methods, including increasingly restrictive environmental regulations. Unless otherwise stated, photos Big Stock Photography Dreamstime Photos Google Maps Thompson Reuters. Lyondell Bassel called this a "strategic and financial decision." The Houston Oil refinery can transform 268,000 barrels per day of crude oil into transportation fuels like gasoline, diesel, jet fuel, and other products. The oil company's Santa Maria Refinery has about 110 . Nous, Yahoo, faisons partie de la famille de marques Yahoo. Previously worked at Euromoney Institutional Investor and CNN. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); This site uses Akismet to reduce spam. Meanwhile Chevron reported its highest quarterly profit in nearly a decade, while Shell posted its highest earnings ever. 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. Individuals should consider whether they can afford the risks associated to trading. 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 addition to the shutdown of refineries, at least two are set to be converted to biofuel production. When you have a power issue, that can sometimes be really difficult to operate around, he said. Like Marathon, Valero has not given any indication when the refinery will be back up. As for turning back on idled refineries, that's not a quick fix either. Its forward progress could shut down that regions refineries. So who cares about refined products? 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. Eni is evaluating the conversion of the Livorno refinery in Italy into a biorefinery. 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. In Pursuit Of Higher Value, Big Oil Isnt Losing Any Sleep Over The EV Revolution, Mining Majors Are Treading Carefully As Battery Metals Boom. at its modules plant in Toledo.The plant built the one millionth Fiat 500 in November 2012. Sonoma Countys average on Monday was $6.03 per gallon, which was outpacing Californias overall average of $5.80 per gallon. At Separo weve spent many years earning a global reputation for the excellence and flexibility of our tank cleaning and recovery services. It doesnt make sense, the 23-year-old said. In fact, some refiners have repurposed their facilities, where instead of making gasoline from oil, they're ramping up to produce renewable diesel and sustainable aviation fuel out of feed stocks like soybean oil and used cooking oil. By Alex Kimani - Dec 29, 2022, 11:00 AM CST. 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. According to our annual Refinery Capacity Report, 2021 was the second consecutive year of decreasing refinery capacity. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. The national average price of gasoline surpassed $5 a gallon for the first time ever this month. 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. See here for a complete list of exchanges and delays. The refinery that subsequently grew at the junction of the Delaware and Schuylkill Rivers today occupies 1,300 acres of urban South Philadelphia landscape, an area that is larger than the. HOUSTON, Texas (KTRK) -- LyondellBasell is leaving the refining business. 74-89% of retail investor accounts lose money. Five refineries have shut down in the United States in just the past two years, reducing the nation's refining capacity by about 5 percent and eliminating more than 1 million barrels of fuel. Total gasoline inventories in the United States have been slowly building over the last few weeks, ending at 250 million barrels as of January 28, before the storm. document.write(write_html); Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. The refinery has since been bulldozed. Trading and investing carries a high risk of losing money rapidly due to leverage. In a letter sent to seven refining and fuel companies, Biden alleges they are engaged in price-gouging and threatens that he is prepared to use all reasonable and appropriate Federal Government tools and emergency authorities to increase refinery capacity and output in the near term, raising the specter that the current President could be ready to resort to even more Jimmy Carter-style market control measures that were tried and failed during the 1970s. The United States hasn't seen a major new refinery built since the 1970s. Some refineries shuttered during the pandemic-induced recession in 2020, when demand for gasoline took a nosedive. 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. (Photo by Justin Sullivan/Getty Images) "The narrative until today was that we were going to be driving electric vehicles by the end of the year. The company is converting the Martinez refinery to produce 260 million gallons per year of renewable diesel starting in 2023. Shutdowns, or at. 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. Those, however, are specific to the West Coast and gas prices across the rest of the country are in better shape. 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. 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. So President Biden wants them to do more to bring down the price of gasoline. Crude oil production stopped and was permanently shut down in 2017. 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 . Photographer: Chris Kleponis/Abaca/Bloomberg, Cranes operate at LyondellBasell facility along, the Houston Ship Channel Wednesday, Aug. 27, 2014, in Houston. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. The refinery processes 268,000 barrels per day (bpd) of oil and produces 92,600 . George Frey/Getty Images Chevron CEO Mike Wirth recently stated as much in an interview with Bloomberg. But the continued decline in domestic refinery capacity could signal long-term domestic fuel supply shortfall, Reuters reported. But on Monday, at that same Safeway, Prince paid $5.39 per gallon to fill his Mazda 6. Home; . The Houston, Texas, facility which is operated by LyondellBasell Industries, spans 700 acres and was built in 1918 is scheduled to permanently close by the end of 2023, but could shut down earlier if a major equipment failure spreads to major units, two people familiar with the issues told Reuters. 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. 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. Santa Rosa resident Alex Prince said it gave him hope that the cost of driving would be more affordable by Halloween. No off-topic remarks. 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. 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. hide caption. With gas prices surging past $5.00 a gallon, many Americans are wondering what is the problem. When the pandemic hit and demand for oil evaporated during the recession, refineries took a big financial hit when the price of gasoline plummeted. Not all of those refineries have come back online. hide caption, PETALUMA, CALIFORNIA - MAY 18: A customer pumps gas into their car at a gas station on May 18, 2022 in Petaluma, California. 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. 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. LYB 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. 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. HollyFrontier shut all units as of the end of August 2020 at its 48,000 barrels per day refinery in Cheyenne, Wyoming. Since it opened, more than half the refineries in the U.S. have closed. Change), You are commenting using your Twitter account. The refinery outages have caused refinery stocksincluding Valero and Marathon--to trade higher on Monday. 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. Daily Caller News Foundation June 7, 2022. The payment will decline to zero if margins increase to $10.20 per barrel. Follow this author to stay notified about their latest stories. 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 . The Houston Refinery is currently operating as planned, LyondellBasell said in a statement Tuesday to The Daily Caller News Foundation. hide caption. 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. 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. On Thursday, the. Merchant of Record: A Media Solutions trading as Oilprice.com, That email address is already in the database. We average between 2 and 3 posts a day. Things are fine everywhere else, right?. It would take months to bring the refineries back online, and it would be costly for the refiners. On Twitter @colin_atagi. Pledges Additional $2 Billion In Security Assistance To Ukraine, Three Fires At Pemex Facilities In One Day, Native Americans Urge Biden To Halt Offshore Wind Permitting, High Energy Prices Force Worlds Largest Chemicals Company To Cut Jobs, U.S. According to the International Energy Agency (IEA . It occurred at the Richmond-based Chevron Richmond Refinery, which reportedly experienced power problems. Those that remain are running at 94% capacity. 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. All quotes delayed a minimum of 15 minutes. Underpinning the decisions not to reopen refineries is the fact that the U.S. is undergoing an energy transition from fossil fuels to renewables. Continue reading this story and get ACCESS to all our content from any device with a subscription now. Massive Oil Refinery On Track To Shut Down Amid Fuel Supply Shortages, Record Prices. President Biden and Big Oil are at each other's throats. 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. September 26, 2022 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. That is pretty much always the inevitable outcome of such policies. Throughput at its French refineries was up 3% on the quarter at 274,000 b/d but remained 46% down compared with 2019. On Thursday, Lyondellbasell Industries announced its plans to shut down its Houston Oil refinery by 2023 permanently. Those that remain are running at 94% capacity. Santa Rosa resident Paige Hogan, 33, topped off a Honda Civic for $5.79 per gallon at an Arco station on Fourth Street. 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. Like Marathon, Valero has not given any indication when the refinery will be back up. Image Drilling for oil . 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. 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. Valeros (NYSE: VLO) Texas City 225,000 bpd refinery has also shut down. It isnt as if these facilities have been idle. 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 cost of driving had been dropping for 14 weeks nationwide before the recent refinery issues developed. 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. These closures were temporary, of course, but they serve to underline how fragile the infrastructure upon which the industry is based can be, and how external events of varying size and type can lead to not just interrupted operations but complete shutdowns. ExxonMobil's profit in the first quarter more than doubled from a year earlier. Meanwhile, the operator made modifications in 2014 and 2015 to process 3,500 barrels of vegetable oils and beef tallow per day. Slectionnez Grer les paramtres pour grer vos prfrences. 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. Some of its been very policy-driven and companies decided that it wasnt worth it to keep operating those assets.. The Biden administration has reportedly considered addressing the declining refining capacity, but has yet to act on the issue. 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. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. 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. Eduardo Munoz Alvarez/Getty Images Calcasieu Refining shut its Lake Charles plant in early August of 2020, according to the Louisiana Department on Environmental Quality, citing demand loss during the pandemic. Experts say ongoing fears of a recession had been pushing down gas prices on a global level during the past several months. Bidens intemperate outburst at ExxonMobil last week and todays letter indicates Mr. Yergins fears were well-founded. See here for a complete list of exchanges and delays. 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 rising volumes of biofuels into the gasoline have overwhelmed their ability to be profitable. 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. if(window.innerWidth<=1023){var write_html='