are a crude refinery and a synfuels refinery after the biggest crude oil refinery ceased refining at the end of March 2022. Photographer: Chris Kleponis/Abaca/Bloomberg, Cranes operate at LyondellBasell facility along, the Houston Ship Channel Wednesday, Aug. 27, 2014, in Houston. David Blackmon is a Texas-based public policy analyst/consultant. On Twitter @colin_atagi. CAPACITY: 161,000 bpd (Martinez); 27,000 bpd (Gallup). 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. the successful shut down and closure of the Houston Refinery, including within the expected timeframe; the outcome of . The fragility of the sector as a whole was underlined not merely by the impact of the pandemic, which, in all honesty, left hardly any sector completely untouched, but also by the example of Texas, a part of the world which, over and above almost anywhere else, could surely be expected to be able to cope with any temporary issues caused by wider conditions. From the industrial separation & filtration experts. Sadly, it always seems to take a crisis for politicians to begin to wake up to the folly of their own actions. Right now, all bets are off.. Valeros (NYSE: VLO) Texas City 225,000 bpd refinery has also shut down. The reasons for those closures are due primarily to governments. Search Posts. Fill in your details below or click an icon to log in: You are commenting using your WordPress.com account. 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. 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 company ceased refinery operations at Cheyenne the following month, making it the first U.S. refinery to close in 2020. 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. 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. Chevron CEO Mike Wirth recently stated as much in an interview with Bloomberg. The end of the Keystone pipeline is also troubling for the oil gas . Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. Its forward progress could shut down that regions refineries. 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. 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. US President Joe Biden departs Marine One after, arriving in Washington, D.C., US, on Tuesday, June 14, 2022. Staples says that if the federal land ban continues, Texas is set to lose 120,000 jobs and $65 million in revenue by 2022. (Photo by George Frey/Getty Images) The evidence for the impact of the pandemic on the sector is widespread and undeniable. In Australia, the collapse of the oil refining industry has resulted in their now being just two refineries in the country, after Exxon Mobil closed the 86,000 bpd Altona refinery in February, following on from BP closing the Kwinana refinery in November of last year, and converting it into a fuel import terminal. 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. 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 rising volumes of biofuels into the gasoline have overwhelmed their ability to be profitable. Change), You are commenting using your Facebook account. Crude oil production stopped and was permanently shut down in 2017. 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. 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. '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. You can received notifications daily or weekly. 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. The refinery could be converted into a processor of pyrolysis oils, which can be used to make renewable diesel, but that study will take years. Cinquegrana said only one of the four California refinery shutdowns was unplanned. Like Marathon, Valero has not given any indication when the refinery will be back up. 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. The refinery became unprofitable as COVID-19 spread across the United States. All quotes delayed a minimum of 15 minutes. The permitting and building of a new greenfield refinery would take at least a decade; major expansions take several years from cradle to startup. 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. All rights reserved. I filled up because I dont know if its going to get cheaper anytime soon. Merchant of Record: A Media Solutions trading as Oilprice.com, That email address is already in the database. Elsewhere in the world, capacity has shrunk by 2.13. The Marathon Anacortes Refinery. Five refineries have shut down in the past two years, reducing the nation's refining capacity by about 5% and eliminating more than 1 million barrels of fuel per day from the market, leaving the remaining facilities straining to meet demand. LyondellBasell plans to shut down its Houston refinery at the end of 2023, impacting 550 jobs. Information about your device and internet connection, like your IP address, Browsing and search activity while using Yahoo websites and apps. FCA is shutting down part of its massive Toledo manufacturing . US governments accomplished this through various methods, including increasingly restrictive environmental regulations. 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. This is so, so frustrating, Hogan said. Underpinning the decisions not to reopen refineries is the fact that the U.S. is undergoing an energy transition from fossil fuels to renewables. See here for a complete list of exchanges and delays. 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. The company is converting the Martinez refinery to produce 260 million gallons per year of renewable diesel starting in 2023. Gas prices started skyrocketing following a raft of sanctions on Russian oil, after its invasion of Ukraine in February. Second-largest Valero Energy Corp is targeting between 85% and 88%, down from 97% last quarter. 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. 2008-2023 - Shore News Media & Marketing Ltd. Co. All rights reserved. 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. President Biden and Big Oil are at each other's throats. 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. if(window.innerWidth<=1023){var write_html='
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