During the past week alone, according to some industry insiders, prices at the pump have jumped by more than 50 cents. 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. Overall, its throughput in Q3 was 1% up on the year at 1.225 million b/d, but 29% down from 2019. 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. This is so, so frustrating, Hogan said. Even as oil and gas companies profits soar, refineries across the country are being retired and converted to other uses as owners balk. LYB UPDATED: Please read and follow our commenting policy: Santa Rosa gas prices charged an average of $6 for a gallon of regular fuel Monday. 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. On Thursday, the. 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. 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. 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 permitting and building of a new greenfield refinery would take at least a decade; major expansions take several years from cradle to startup. Contrary to claims from Trump and other Republicans, Biden has not "shut down" American energy: US crude oil production in Biden's first year was higher than in each of Trump's first two years. Citgo Petroleum Corp. is shutting down a section of a sulfur recovery unit known as a B-train for four days due to the loss of third-party oxygen supply "resulting from increased medical field. The cost of driving had been dropping for 14 weeks nationwide before the recent refinery issues developed. LYONDELLBASELL HOUSTON: CAPACITY: 263,776 barrel-per-day (bpd) Register for free to Reuters and know the full story Lyondell said in April of 2022 that it would permanently shut the. Experts say ongoing fears of a recession had been pushing down gas prices on a global level during the past several months. Unless otherwise stated, photos Big Stock Photography Dreamstime Photos Google Maps Thompson Reuters. Justin Sullivan/Getty Images What the letter does not recognize, of course, is the role the federal government, pressured by climate change interest groups, has played in creating the current shortage of domestic refining capacity. 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. 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. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Refineries transform that oil into products and sell those. Santa Rosa resident Alex Prince said it gave him hope that the cost of driving would be more affordable by Halloween. 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. Reports also came in on Monday that Valeros Houston refinery was flaringa safety event used to manage excess material. June 21, 2022 Why is Oil Refining Down? LyondellBasell plans to shut down its Houston . Change), You are commenting using your Twitter account. 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. 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.". Those that remain are running at 94% capacity. Sadly, it always seems to take a crisis for politicians to begin to wake up to the folly of their own actions. US governments accomplished this through various methods, including increasingly restrictive environmental regulations. 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. 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. Lyondell originally planned to sell the plant back in 2017 but pivoted and continued operations. Like Marathon, Valero has not given any indication when the refinery will be back up. Those, however, are specific to the West Coast and gas prices across the rest of the country are in better shape. 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. 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. 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. 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. The national average price of gasoline surpassed $5 a gallon for the first time ever this month. In the interim, the company will continue serving the fuels market, which is expected to remain strong near-term.. While the Biden administration says market manipulation by Big Oil is behind the shortage of refined fuel right now, the . Of the three California refineries undergoing scheduled maintenance, one is in Benicia and the other two are in Los Angeles. 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. As of Monday, his agency reported Santa Rosas average price for a gallon of regular unleaded fuel was $6. On Twitter @colin_atagi. 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. The long term aim is for the company to achieve carbon neutrality by 2050. 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. 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. "I think the refining executives say, well, looks like the writing's on the wall," Cinquegrana says. Some refiners threw in the towel. 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. (Photo by George Frey/Getty Images) The refinery became unprofitable as COVID-19 spread across the United States. The oil company's Santa Maria Refinery has about 110 . 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. Daily Caller News Foundation June 7, 2022. I filled up because I dont know if its going to get cheaper anytime soon. CRONIN: That's Patrick. The United States hasn't seen a major new refinery built since the 1970s. U.S. refineries are already going gangbusters right now. Friday, February 11, 2022 3:56 am. 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. With gas prices surging past $5.00 a gallon, many Americans are wondering what is the problem. LyondellBasell will be closing its Houston refinery and exiting the refining industry, according to a filing with the Securities and Exchange Commission (SEC). The Biden administration envisions a future where the world is powered by clean energy rather than oil with its destructive effect on the environment. David Blackmon is a Texas-based public policy analyst/consultant. On Thursday, Lyondellbasell Industries announced its plans to shut down its Houston Oil refinery by 2023 permanently. The bottom line here is that this is a problem that has been a long time coming. 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. See here for a complete list of exchanges and delays. 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. Those that remain are running at 94% capacity. hide caption. 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. 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. Refiners' prices on those fuels - $250 to $280 per barrel - are closer to what consumers pay, Daniel Milan, managing partner at. New York gas stations, for example, charged an average of $3.68 per gallon as of Monday, according to AAA. '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. 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. 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. 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. That is pretty much always the inevitable outcome of such policies. (LogOut/ 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. 74-89% of retail investor accounts lose money. The payment will decline to zero if margins increase to $10.20 per barrel. Reports on oil and energy, including refineries, markets and renewable fuels. 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. 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. The Houston, Texas, facility which is operated by LyondellBasell Industries, spans 700 acres and was built in 1918 is . , 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. Phillips 66 is shutting down its Santa Maria Refinery facility on the Nipomo Mesa as it pivots to renewable fuels, but it's unclear . 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. About three weeks ago, gas at the Safeway on Mendocino Avenue was $4.94 per gallon. 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 . Reports also came in on Monday. Until now, California fuel costs followed worldwide trends. Individuals should consider whether they can afford the risks associated to trading. 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. Change), You are commenting using your Facebook account. All rights reserved. (Photo by Justin Sullivan/Getty Images). 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. 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. Fire smolders at an oil refinery that triggered several large explosions at the Philadelphia Energy Solutions Refining Complex on June 21, 2019. "We have been expecting a pretty hefty spring turnaround season in 2023 after refiners ran hard in 2022," said Matthew Blair, refining analyst at research firm Tudor . France's TotalEnergies reported higher refinery throughput in Q3 amid improved margins. They're operating above 90% capacity according to the Energy Information Administration, and expected to run at 95% for the rest of the summer. if(window.innerWidth <= 1023){ The president urged oil executives to increase the supply of gasoline and other refined products, and to drill for more oil in a bid to bring gas prices down. Of course, high demand combined with high prices has led oil companies to make big profits. She recalled paying closer to $5.25 per gallon less than two weeks ago. The refinery has since been bulldozed. Monday, June 20, 2022 Industry Why are refineries closing amid oil price windfall? 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. 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. 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. Copyright 2023 Separo. 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. 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. While Gas Buddy indicated that gasoline prices would start to ease somewhat this week, Marathon Petroleums 593,000 bpd Galveston Bay refinery is shut down for the foreseeable future, thanks to a citywide power outage during freezing temperatures. As for turning back on idled refineries, that's not a quick fix either. 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. 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. The U.S. had five fewer. U.S. refiners throttle back Q1 output after record 2022 runs By Erwin Seba . The refinery's major units are its two crude distillation units (CDUs), two cokers, gasoline-producing fluidic catalytic cracker (FCC), sulfur recovery units, and certain hydrotreaters, the. If the answer to this question is yes, whats more, then the sector will have to accept that refinery shutdowns are becoming a fact of life and, having accepted that, start planning for the future. 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. The Department of Energy didnt respond to a request for comment from TheDCNF. Elsewhere in the world, capacity has shrunk by 2.13. Refiners turn crude oil into usable products like gasoline, diesel, and jet fuel. The 50-year-old refinery was severely damaged after several feet of water flooded it during the storm. Education: BA, Marquette University. Stay tuned. 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