Shell planned to try to divest the refinery as it considers closing facilities it cannot sell, the company told investors. Of the three California refineries undergoing scheduled maintenance, one is in Benicia and the other two are in Los Angeles. 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. CAPACITY: 161,000 bpd (Martinez); 27,000 bpd (Gallup). are a crude refinery and a synfuels refinery after the biggest crude oil refinery ceased refining at the end of March 2022. 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. You can change your choices at any time by visiting your privacy controls. Overall, its throughput in Q3 was 1% up on the year at 1.225 million b/d, but 29% down from 2019. 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. Additionally, refining investment is still underway. 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 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. 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. No profanity, hate speech or personal attacks. You can received notifications daily or weekly. (LogOut/ Previously worked at Euromoney Institutional Investor and CNN. 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. It isnt as if these facilities have been idle. In addition to the shutdown of refineries, at least two are set to be converted to biofuel production. Eduardo Munoz Alvarez/Getty Images Monday, June 20, 2022 Industry Why are refineries closing amid oil price windfall? Well, it turns out a lot of people need refined products," says Blanch. There were other disasters around the same time. U.S. refiners throttle back Q1 output after record 2022 runs By Erwin Seba . (Photo by George Frey/Getty Images) The refinery has since been bulldozed. Why are refineries closing amid oil price windfall? 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. Refineries transform that oil into products and sell those. In Louisiana, another refinery was wiped out by Hurricane Ida. Of course, high demand combined with high prices has led oil companies to make big profits. 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. June 21, 2022 Why is Oil Refining Down? document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); This site uses Akismet to reduce spam. According to our annual Refinery Capacity Report, 2021 was the second consecutive year of decreasing refinery capacity. The end of the Keystone pipeline is also troubling for the oil gas . In the interim, the company will continue serving the fuels market, which is expected to remain strong near-term.. Reports also came in on Monday. (Photo by Justin Sullivan/Getty Images). (Photo by Justin Sullivan/Getty Images) Get exclusive content only available to INSIDERS. 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. And that's when you shut down refineries," says Denton Cinquegrana, chief oil analyst at Oil Price Information Service. We, Yahoo, are part of the Yahoo family of brands. All rights reserved. During the past week alone, according to some industry insiders, prices at the pump have jumped by more than 50 cents. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. 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. New England's diesel supply issues were made worse when a Canadian refinery in Newfoundland shut down in 2020 as the pandemic impacted on demand. Information about your device and internet connection, like your IP address, Browsing and search activity while using Yahoo websites and apps. Daily Caller News Foundation June 7, 2022. UPDATED: Please read and follow our commenting policy: Santa Rosa gas prices charged an average of $6 for a gallon of regular fuel Monday. Individuals should consider whether they can afford the risks associated to trading. She recalled paying closer to $5.25 per gallon less than two weeks ago. The industry leader for online information for tax, accounting and finance professionals. 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. 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. The national average price of gasoline surpassed $5 a gallon for the first time ever this month. 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. (LogOut/ You can reach Staff Writer Colin Atagi at colin.atagi@pressdemocrat.com. 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. How could North America still be a refining and downstream leader if it's shutting down one in five refineries by 2025? George Frey/Getty Images 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. 2008-2023 - Shore News Media & Marketing Ltd. Co. All rights reserved. Thursday, May 12, 2022. Experts say ongoing fears of a recession had been pushing down gas prices on a global level during the past several months. 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 permitting and building of a new greenfield refinery would take at least a decade; major expansions take several years from cradle to startup. The U.S. had five fewer refineries at the beginning of this year that at the beginning of 2020. New York gas stations, for example, charged an average of $3.68 per gallon as of Monday, according to AAA. Meanwhile, the operator made modifications in 2014 and 2015 to process 3,500 barrels of vegetable oils and beef tallow per day. Refining capacity in the U.S. is about a million barrels a day below what it was prior to the pandemic. The company is converting the Martinez refinery to produce 260 million gallons per year of renewable diesel starting in 2023. 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 . Meanwhile Chevron reported its highest quarterly profit in nearly a decade, while Shell posted its highest earnings ever. I dont know that Ive ever seen a wider gamut of price behaviors coast to coast in my career, De Haan said. 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. 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. The result was that five refineries across the US shut down permanently. 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. The United States hasn't seen a major new refinery built since the 1970s. They said the numbers just didn't work, and closed up shop. 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. Since the start of the pandemic, statistics related to Covid-19 hospitalizations in the world "only got worse month by month . 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. It doesnt make sense, the 23-year-old said. 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. But on Monday, at that same Safeway, Prince paid $5.39 per gallon to fill his Mazda 6. Informations sur votre appareil et sur votre connexion Internet, y compris votre adresseIP, Navigation et recherche lors de lutilisation des sites Web et applications Yahoo. Stay tuned. Chevron CEO Mike Wirth recently stated as much in an interview with Bloomberg. Operable atmospheric crude oil distillation capacity, our primary measure of refinery capacity in the United States, totaled 17.9 million barrels per calendar day as of January 1, 2022, down 1% from the beginning of 2021. This is a family newspaper, please use a kind and respectful tone. Unless otherwise stated, photos Big Stock Photography Dreamstime Photos Google Maps Thompson Reuters. 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. It had been $5.64 last week. Start Trading CFDs Over 2,200 Different Instruments, Germanys Natural Gas Bill Doubled In 2022 Despite Import Volumes Falling, Shells leadership considered ditching Europe. Valeros (NYSE: VLO) Texas City 225,000 bpd refinery has also shut down. The refinery became unprofitable as COVID-19 spread across the United States. 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. Lyondell originally planned to sell the plant back in 2017 but pivoted and continued operations. The cost of driving had been dropping for 14 weeks nationwide before the recent refinery issues developed. 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. Francisco Blanch, head of commodities research at Bank of America, points out that the country is still heavily reliant on gasoline despite those goals. The drop in capacity was driven by a 13% drop in gasoline consumption, and prices for gasoline and diesel hit a four year low. A Philadelphia refinery, one of the largest in the country, was rocked by explosions a few months before the pandemic. The response, across many parts of the oil refining industry, has been to think of ways of repurposing the existing infrastructure in order to ensure that defunct sites can continue to bring in revenue. 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 . 2022 Welcome: Official Visitors Guide to Greater Baton Rouge. 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. Get access to more than a decade of story archives. 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. Phillips 66 announced in November 2021 that it would not reopen the Alliance refinery, which was shut in mid-August ahead of Hurricane Ida. That is pretty much always the inevitable outcome of such policies. The refinery is among the top 25 largest-capacity facilities in the U.S., according to the Energy Information Administration. 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. Prices have edged down by a few cents in recent days, but remain elevated. About three weeks ago, gas at the Safeway on Mendocino Avenue was $4.94 per gallon. Has Saudi Arabias Relationship With Russia Reached Its Limits? Some refineries shuttered during the pandemic-induced recession in 2020, when demand for gasoline took a nosedive. Both have been shut down. Fill in your details below or click an icon to log in: You are commenting using your WordPress.com account. By clicking submit below, you consent to allow us to store and process the personal information submitted above to provide you the content requested. UPDATE: This article has been updated to include comment from LyondellBasell Industries on its plans to cease operations in 2023. The 50-year-old refinery was severely damaged after several feet of water flooded it during the storm. Could Gravity Batteries Win The Energy Storage War? By Alex Kimani - Dec 29, 2022, 11:00 AM CST. (Photo by George Frey/Getty Images). Search Posts. Those that remain are running at 94% capacity. 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 successful shut down and closure of the Houston Refinery, including within the expected timeframe; the outcome of . Most of the refinery closures occurred in western countries, the data showed. Phillips 66 is shutting down its Santa Maria Refinery facility on the Nipomo Mesa as it pivots to renewable fuels, but it's unclear . In Pursuit Of Higher Value, Big Oil Isnt Losing Any Sleep Over The EV Revolution, Mining Majors Are Treading Carefully As Battery Metals Boom. HOUSTON, April 21, 2022 /PRNewswire/ -- LyondellBasell (NYSE: LYB) . 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. "I think the refining executives say, well, looks like the writing's on the wall," Cinquegrana says. 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. Bidens intemperate outburst at ExxonMobil last week and todays letter indicates Mr. Yergins fears were well-founded. 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. 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. Underpinning the decisions not to reopen refineries is the fact that the U.S. is undergoing an energy transition from fossil fuels to renewables. 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. "With companies. 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. The U.S. hasn't constructed a major petroleum refinery since 1977 even as fuel demand and domestic oil production have surged in recent decades. We average between 2 and 3 posts a day. if(window.innerWidth<=1023){var write_html='