By Daily Report Staff (iStock) Even as oil and gas companies' profits soar, refineries across the country. The Paramount refinery began operating in the 1930s. Massive Oil Refinery On Track To Shut Down Amid Fuel Supply Shortages, Record Prices 06.11.2022 By Ricardo Perez - NEWS June 11, 2022 [Daily Caller] - 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. Photographer: Chris Kleponis/Abaca/Bloomberg, Cranes operate at LyondellBasell facility along, the Houston Ship Channel Wednesday, Aug. 27, 2014, in Houston. 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. Most of the refinery closures occurred in western countries, the data showed. "The Houston Refinery is currently. Not all of those refineries have come back online. 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. 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. HollyFrontier shut all units as of the end of August 2020 at its 48,000 barrels per day refinery in Cheyenne, Wyoming. This needs to last me for a couple weeks.. Continue reading this story and get ACCESS to all our content from any device with a subscription now. Opinions expressed by Forbes Contributors are their own. 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. So President Biden wants them to do more to bring down the price of gasoline. The refinery processes 268,000 barrels per day (bpd) of oil and produces 92,600 . Of course, high demand combined with high prices has led oil companies to make big profits. , 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. The national average price of gasoline surpassed $5 a gallon for the first time ever this month. 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 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. Santa Rosa resident Alex Prince said it gave him hope that the cost of driving would be more affordable by Halloween. Lyondell originally planned to sell the plant back in 2017 but pivoted and continued operations. Santa Rosa resident Paige Hogan, 33, topped off a Honda Civic for $5.79 per gallon at an Arco station on Fourth Street. Reports on oil and energy, including refineries, markets and renewable fuels. On Thursday, Lyondellbasell Industries announced its plans to shut down its Houston Oil refinery by 2023 permanently. Search Posts. 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. Those, however, are specific to the West Coast and gas prices across the rest of the country are in better shape. 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. 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. The Marathon Anacortes Refinery. Refiners turn crude oil into usable products like gasoline, diesel, and jet fuel. We will remove any comments or commenters that do not follow this commenting policy. 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. 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. 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. LyondellBasell plans to shut down its Houston refinery at the end of 2023, impacting 550 jobs. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org. Well, it turns out a lot of people need refined products," says Blanch. 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. But this is a problem for which there are no quick remedies. The end of the Keystone pipeline is also troubling for the oil gas . Enter your email address to follow this blog and receive notifications of new posts by email. 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. Motorists in Colorado should get ready to pay more at the pump after Suncor Energy announced this week it would shut down its Commerce City oil refinery for as long as three months due to equipment Eduardo Munoz Alvarez/Getty Images 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. During the past week alone, according to some industry insiders, prices at the pump have jumped by more than 50 cents. 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 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 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. if(window.innerWidth <= 1023){ The reasons for those closures are due primarily to governments. (Photo by Justin Sullivan/Getty Images) UPDATE: This article has been updated to include comment from LyondellBasell Industries on its plans to cease operations in 2023. President Biden and Big Oil are at each other's throats. The 50-year-old refinery was severely damaged after several feet of water flooded it during the storm. 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. 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. There's just fewer refiners in the U.S. today than a couple of years ago. According to our annual Refinery Capacity Report, 2021 was the second consecutive year of decreasing refinery capacity. Massive Oil Refinery On Track To Shut Down Amid Fuel Supply Shortages, Record Prices Thomas Catenacci on June 7, 2022 UPDATE: This article has been updated to include comment from LyondellBasell Industries on its plans to cease operations in 2023. David Ryder/Getty Images Phillips 66 announced in November 2021 that it would not reopen the Alliance refinery, which was shut in mid-August ahead of Hurricane Ida. Valeros (NYSE: VLO) Texas City 225,000 bpd refinery has also shut down. Some refineries shuttered during the pandemic-induced recession in 2020, when demand for gasoline took a nosedive. That would be a pretty clear antitrust violation, Borenstein said. The refinery had already been idle for a decade before restart. 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. The drop in capacity was driven by a 13% drop in gasoline consumption, and prices for gasoline and diesel hit a four year low. It occurred at the Richmond-based Chevron Richmond Refinery, which reportedly experienced power problems. September 26, 2022 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. }. 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. The plant is set to close by December 31, 2023. The drop in capacity was driven by a 13% drop in gasoline consumption, and prices for gasoline and diesel hit a four year low. Education: BA, Marquette University. Fill in your details below or click an icon to log in: You are commenting using your WordPress.com account. 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. 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. Elsewhere in the world, capacity has shrunk by 2.13. Start Trading CFDs Over 2,200 Different Instruments, Germanys Natural Gas Bill Doubled In 2022 Despite Import Volumes Falling, Shells leadership considered ditching Europe. 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. 74-89% of retail investor accounts lose money. Fire smolders at an oil refinery that triggered several large explosions at the Philadelphia Energy Solutions Refining Complex on June 21, 2019. Change). It would take months to bring the refineries back online, and it would be costly for the refiners. Reports also came in on Monday that Valeros Houston refinery was flaringa safety event used to manage excess material. Its forward progress could shut down that regions refineries. 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. See here for a complete list of exchanges and delays. 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. Massive Oil Refinery On Track To Shut Down Amid Fuel Supply Shortages, Record Prices. 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. The COVID pandemic really drove down gasoline and diesel demand which accelerated some things that were already happening, Geoff Moody, the vice president of government relations at the American Fuel & Petrochemical Manufacturers, previously told TheDCNF. The question for anyone working in the industry is whether the sector will spring back as lockdowns lift across the world, or whether the impact of the pandemic was merely an accelerating factor within a process which was already underway. I filled up because I dont know if its going to get cheaper anytime soon. The materials provided on this Web site are for informational and educational purposes only and are not intended to provide tax, legal, or investment advice. There were other disasters around the same time. 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. Given that the recent COP26 committed governments around the world to measures which would hit targets at or around 2 degrees Celsius depending upon interpretations of the various conditional and unconditional commitments the direction of travel identified in 2017 has clearly remained the same and has, if anything, accelerated. Gasoline Prices 26 Cents Lower Than Last Year, Russias Lukoil Looks To Sell Stake In Offshore Oil And Gas Field, Kazakhstan Could Suspend Natural Gas Exports Next Winter, Kazakh Oil Starts Flowing To Germany Via Russian Pipeline Network, Saudi Arabia Signs $400 Million Aid Package For Ukraine, Chinas Coal Plant Approvals Surged To A 7-Year High In 2022, Iranian Currency Drops To Record Low Against The U.S. Dollar, Oil Prices Dip As Traders Wait For Chinese Demand To Rebound, Academics: Russia Selling Oil Way Over Price Cap, Ecuador Calls Force Majeure On Almost All Of Its Oil Production, BOEM To Hold Oil, Gas Lease Sale On March 29, The U.S. Intensifies Sanctions Against Russia, U.S. Change), You are commenting using your Twitter account. 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. Those that remain are running at 94% capacity. ExxonMobil's profit in the first quarter more than doubled from a year earlier. 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. if(window.innerWidth<=1023){var write_html='