The drop in capacity was driven by a 13% drop in gasoline consumption, and prices for gasoline and diesel hit a four year low. 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. And that's when you shut down refineries," says Denton Cinquegrana, chief oil analyst at Oil Price Information Service. The company ceased refinery operations at Cheyenne the following month, making it the first U.S. refinery to close in 2020. 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 Marathon Anacortes Refinery. 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. 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. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Not all of those refineries have come back online. Things are fine everywhere else, right?. Learn how your comment data is processed. The refinery processes 268,000 barrels per day (bpd) of oil and produces 92,600 . 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. Additionally, refining investment is still underway. read more. Nous, Yahoo, faisons partie de la famille de marques Yahoo. It would take months to bring the refineries back online, and it would be costly for the refiners. Before the pandemic struck, Pennsylvania Energy Solutions shut down its refinery in Philadelphia after a massive explosion shook the 335,000 bpd facility. Since it opened, more than half the refineries in the U.S. have closed. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. 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. 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. }. (Photo by George Frey/Getty Images). Eni is evaluating the conversion of the Livorno refinery in Italy into a biorefinery. 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. 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. "I think the refining executives say, well, looks like the writing's on the wall," Cinquegrana says. 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. "When you're losing money on doing it, what do you do? 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. Gas prices started skyrocketing following a raft of sanctions on Russian oil, after its invasion of Ukraine in February. While the Biden administration says market manipulation by Big Oil is behind the shortage of refined fuel right now, the . There was already some contraction happening in the industry as a result of projected declines in U.S. gasoline demand into the future and companies just deciding that the assets were better used as other projects or shut down completely, he continued. Until now, California fuel costs followed worldwide trends. 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/ 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. Staples says that if the federal land ban continues, Texas is set to lose 120,000 jobs and $65 million in revenue by 2022. 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. 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. No profanity, hate speech or personal attacks. We, Yahoo, are part of the Yahoo family of brands. 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. EMBED <> More Videos LyondellBasell plans to shut down its Houston refinery at the end of 2023, impacting 550 jobs. 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. 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. "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. FCA is shutting down part of its massive Toledo manufacturing . 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. 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. U.S. refineries are already going gangbusters right now. UPDATED: Please read and follow our commenting policy: Santa Rosa gas prices charged an average of $6 for a gallon of regular fuel Monday. LyondellBasell previously announced it will cease operations of the Houston Refinery no later than December 31, 2023. hide caption, PETALUMA, CALIFORNIA - MAY 18: A customer pumps gas into their car at a gas station on May 18, 2022 in Petaluma, California. Its hard to get a grip on what prices will do, he said. All rights reserved. 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. This is the possibility being explored by ExxonMobil for the Slagen refinery in Norway, with the refinery continuing to operate until any such conversion currently the subject of a consultation with employees has taken place. That would be a pretty clear antitrust violation, Borenstein said. When you have a power issue, that can sometimes be really difficult to operate around, he said. 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. Both have been shut down. But this is a problem for which there are no quick remedies. 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. 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. According to the International Energy Agency (IEA . U.S. refiners throttle back Q1 output after record 2022 runs By Erwin Seba . 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. She recalled paying closer to $5.25 per gallon less than two weeks ago. Sonoma Countys average on Monday was $6.03 per gallon, which was outpacing Californias overall average of $5.80 per gallon. One refinery is set to come back online in . The Midwest is also seeing supply constraints . 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. It occurred at the Richmond-based Chevron Richmond Refinery, which reportedly experienced power problems. 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 . Phillips 66 announced in November 2021 that it would not reopen the Alliance refinery, which was shut in mid-August ahead of Hurricane Ida. Copyright 2023 Separo. The Department of Energy didnt respond to a request for comment from TheDCNF. They definitely cannot talk to each other about their production time. 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. 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. (Photo by Justin Sullivan/Getty Images) 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. On Thursday, the. US governments accomplished this through various methods, including increasingly restrictive environmental regulations. 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 The refinery is among the top 25 largest-capacity facilities in the U.S., according to the Energy Information Administration. Refiners' prices on those fuels - $250 to $280 per barrel - are closer to what consumers pay, Daniel Milan, managing partner at. The cost of driving had been dropping for 14 weeks nationwide before the recent refinery issues developed. France's TotalEnergies reported higher refinery throughput in Q3 amid improved margins. 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 50-year-old refinery was severely damaged after several feet of water flooded it during the storm. The Paramount refinery began operating in the 1930s. 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. The United States hasn't seen a major new refinery built since the 1970s. New York gas stations, for example, charged an average of $3.68 per gallon as of Monday, according to AAA. 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. 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. 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. 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. I dont know that Ive ever seen a wider gamut of price behaviors coast to coast in my career, De Haan said. Even as oil and gas companies profits soar, refineries across the country are being retired and converted to other uses as owners balk. LyondellBasell will be closing its Houston refinery and exiting the refining industry, according to a filing with the Securities and Exchange Commission (SEC). 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. Dollar Tree Inc forecast annual profit well below estimates on Wednesday, hurt by elevated freight and investment costs and as consumers rein back spending on discretionary items. The President might believe that a heavy-handed action to implement price controls or other actions could offer him some short-term political advantage leading up to the November elections, but in the mid-to-long-term it would only result in less availability of the products being controlled. By clicking submit below, you consent to allow us to store and process the personal information submitted above to provide you the content requested. 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. Fill in your details below or click an icon to log in: You are commenting using your WordPress.com account. The refinery became unprofitable as COVID-19 spread across the United States. 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. Trading and investing carries a high risk of losing money rapidly due to leverage. 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. 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. var write_html = `