The industry leader for online information for tax, accounting and finance professionals. 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. David Ryder/Getty Images Friday, February 11, 2022 3:56 am. 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. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. Like Marathon, Valero has not given any indication when the refinery will be back up. 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. This is so, so frustrating, Hogan said. Crude oil production stopped and was permanently shut down in 2017. 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. The refinery had already been idle for a decade before restart. Thursday, May 12, 2022. HOUSTON, Texas (KTRK) -- LyondellBasell is leaving the refining business. The plant is set to close by December 31, 2023. Some refineries shuttered during the pandemic-induced recession in 2020, when demand for gasoline took a nosedive. In other words, governments and/or the green agenda are the primary reason for the expensive gas. hide caption, PETALUMA, CALIFORNIA - MAY 18: A customer pumps gas into their car at a gas station on May 18, 2022 in Petaluma, California. See here for a complete list of exchanges and delays. read more. Not that the problem is confined to the US, with closures some tagged as temporary at the time also happening across Europe and in Australia. During the past week alone, according to some industry insiders, prices at the pump have jumped by more than 50 cents. 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. The previous weeks average was $5.64, according to AAA. "The narrative until today was that we were going to be driving electric vehicles by the end of the year. The drop in capacity was driven by a 13% drop in gasoline consumption, and prices for gasoline and diesel hit a four year low. So who cares about refined products? Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. 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. 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 . 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. 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. The long term aim is for the company to achieve carbon neutrality by 2050. The industrial landscape for oil refineries has been challenging of late, with the Covid-19 pandemic triggering a massive slump in demand for oil which resulted in many refineries across the world having to temporarily shut down. 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. Reports also came in on Monday. Shell announced in November 2020 it would be shuttering the refinery after attempts to sell the plant between July and October were unsuccessful. While the Biden administration says market manipulation by Big Oil is behind the shortage of refined fuel right now, the . Read the full story at theDaily Caller News Foundation. The 50-year-old refinery was severely damaged after several feet of water flooded it during the storm. 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. 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. 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. 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. Stay tuned. It isnt as if these facilities have been idle. 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. 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 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. 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The end of the Keystone pipeline is also troubling for the oil gas . In Pursuit Of Higher Value, Big Oil Isnt Losing Any Sleep Over The EV Revolution, Mining Majors Are Treading Carefully As Battery Metals Boom. The company determined that exiting the refining business, by the end of next year, is the best strategic and financial path forward, the company added in its statement to TheDCNF. And that's when you shut down refineries," says Denton Cinquegrana, chief oil analyst at Oil Price Information Service. Get access to our searchable data center of TOP LISTS. 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. 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. According to our annual Refinery Capacity Report, 2021 was the second consecutive year of decreasing refinery capacity. Covid and oil demand took divergent directions in mid-2020. A Philadelphia refinery, one of the largest in the country, was rocked by explosions a few months before the pandemic. 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. , 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. Search Posts. 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. 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. Of course, COVID and the government lockdowns also had a major impact, as they basically shut down the US economy. 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 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. From the industrial separation & filtration experts. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. The company ceased refinery operations at Cheyenne the following month, making it the first U.S. refinery to close in 2020. Both have been shut down. 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. 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. UPDATE: This article has been updated to include comment from LyondellBasell Industries on its plans to cease operations in 2023. The U.S. had five fewer. 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There were other disasters around the same time. Gas prices started skyrocketing following a raft of sanctions on Russian oil, after its invasion of Ukraine in February. Sonoma Countys average on Monday was $6.03 per gallon, which was outpacing Californias overall average of $5.80 per gallon. Nous, Yahoo, faisons partie de la famille de marques Yahoo. 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. 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. Bidens intemperate outburst at ExxonMobil last week and todays letter indicates Mr. Yergins fears were well-founded. Reports on oil and energy, including refineries, markets and renewable fuels. Refineries transform that oil into products and sell those. Photographer: Chris Kleponis/Abaca/Bloomberg, Cranes operate at LyondellBasell facility along, the Houston Ship Channel Wednesday, Aug. 27, 2014, in Houston. 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%. 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. 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