Fire smolders at an oil refinery that triggered several large explosions at the Philadelphia Energy Solutions Refining Complex on June 21, 2019. 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. Enter your email address to follow this blog and receive notifications of new posts by email. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. HOUSTON, Texas (KTRK) -- LyondellBasell is leaving the refining business. 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. The refinery outages have caused refinery stocksincluding Valero and Marathon--to trade higher on Monday. She recalled paying closer to $5.25 per gallon less than two weeks ago. Like Marathon, Valero has not given any indication when the refinery will be back up. U.S. District Judge Terry A. Doughty in Louisiana struck down Biden's Jan. 27, 2021, executive order in June, dealing a major blow to the president's plans to cut greenhouse gas emissions from . 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. Valeros (NYSE: VLO) Texas City 225,000 bpd refinery has also shut down. Strikes Back At EU Criticism Of The Inflation Reduction Act, China Secures Two Long-Term LNG Deals With U.S. Producer, Oil Gains Over 2% As Gasoline Stocks Show Second Weekly Decline, Russia Says Europe Will Struggle To Replace Its Oil Products, "Natural Gas Price Fundamental Daily Forecast Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas, 'Get A Loan,' Commerce Chief Tells Unpaid Federal Workers, Shell Considered Relocating To The U.S. 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. Report: Biden Shuts Down Domestic Oil and Gas Supplies, Calls for More Production. 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. Shell announced in November 2020 it would be shuttering the refinery after attempts to sell the plant between July and October were unsuccessful. As for turning back on idled refineries, that's not a quick fix either. Bidens intemperate outburst at ExxonMobil last week and todays letter indicates Mr. Yergins fears were well-founded. 2008-2023 - Shore News Media & Marketing Ltd. Co. All rights reserved. De Haan added that one wild card could be Hurricane Ian, which, as of Monday, was approaching the Gulf Coast. LYB Friday, February 11, 2022 3:56 am. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org. Sadly, it always seems to take a crisis for politicians to begin to wake up to the folly of their own actions. By Mike Lee | 06/16/2022 07:17 AM EDT 74-89% of retail investor accounts lose money. According to the International Energy Agency (IEA . This is a family newspaper, please use a kind and respectful tone. Not all of those refineries have come back online. Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. On Twitter @colin_atagi. 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. In addition to the shutdown of refineries, at least two are set to be converted to biofuel production. The Midwest is also seeing supply constraints . Refining capacity in the U.S. is about a million barrels a day below what it was prior to the pandemic. Education: BA, Marquette University. Major refinery operators have largely opted to upgrade facilities rather than construct new greenfield plants because of the projected fuel demand decline in coming years and lengthy regulatory . Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. There's just fewer refiners in the U.S. today than a couple of years ago. 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 refinery has since been bulldozed. Of the three California refineries undergoing scheduled maintenance, one is in Benicia and the other two are in Los Angeles. 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. 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. See here for a complete list of exchanges and delays. France's TotalEnergies reported higher refinery throughput in Q3 amid improved margins. We average between 2 and 3 posts a day. 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. LyondellBasell plans to shut down its Houston . Of course, COVID and the government lockdowns also had a major impact, as they basically shut down the US economy. Why are refineries closing amid oil price windfall? In 2011, the refinery was idled. 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. 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 industrial landscape for oil refineries has been challenging of late, with the Covid-19 pandemic, It would be a fairly simple task to produce predictions about the future of geothermal, Every day seems to bring news of another extreme weather event which might almost have. 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. The two shareholders of the refinery will implement a spending freeze and pause refinery operations at Sapref no later than the end of March 2022 as they will attempt to find a buyer for the. 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. Biden spoke at the 29th AFL-CIO Quadrennial Constitutional Convention in Philadelphia. Its hard to get a grip on what prices will do, he said. By Alex Kimani - Dec 29, 2022, 11:00 AM CST. 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. are a crude refinery and a synfuels refinery after the biggest crude oil refinery ceased refining at the end of March 2022. And that's when you shut down refineries," says Denton Cinquegrana, chief oil analyst at Oil Price Information Service. The 50-year-old refinery was severely damaged after several feet of water flooded it during the storm. 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. Get exclusive content only available to INSIDERS. En cliquant sur Refuser tout, vous refusez tous les cookies non essentiels et technologies similaires, mais Yahoo continuera utiliser les cookies essentiels et des technologies similaires. By Daily Report Staff (iStock) Even as oil and gas companies' profits soar, refineries across the country. The oil company's Santa Maria Refinery has about 110 . 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. I dont know that Ive ever seen a wider gamut of price behaviors coast to coast in my career, De Haan said. The refinery is among the top 25 largest-capacity facilities in the U.S., according to the Energy Information Administration. The Paramount refinery began operating in the 1930s. 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. Unless otherwise stated, photos Big Stock Photography Dreamstime Photos Google Maps Thompson Reuters. (AP Photo/David J. Phillip), Energy Information Administration reported. Before the pandemic struck, Pennsylvania Energy Solutions shut down its refinery in Philadelphia after a massive explosion shook the 335,000 bpd facility. 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. But this is a problem for which there are no quick remedies. On Thursday, the. 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. With gas prices surging past $5.00 a gallon, many Americans are wondering what is the problem. "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 . Copyright 2023 Separo. 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. It isnt as if these facilities have been idle. 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. President Biden and Big Oil are at each other's throats. By 2022, EIA similarly forecasts global consumption of petroleum and liquid fuels to increase by 3.6 million b/d. 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. 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Opinions expressed by Forbes Contributors are their own. Has Saudi Arabias Relationship With Russia Reached Its Limits? June 21, 2022 Why is Oil Refining Down? Crude oil production stopped and was permanently shut down in 2017. 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. (Photo by George Frey/Getty Images) 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. 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