The refinery had already been idle for a decade before restart. Enter your email address to follow this blog and receive notifications of new posts by email. Daily Caller News Foundation June 7, 2022. In Pursuit Of Higher Value, Big Oil Isnt Losing Any Sleep Over The EV Revolution, Mining Majors Are Treading Carefully As Battery Metals Boom. Massive Oil Refinery On Track To Shut Down Amid Fuel Supply Shortages, Record Prices. 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. 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. Trading and investing carries a high risk of losing money rapidly due to leverage. You can change your choices at any time by visiting your privacy controls. 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. Its hard to get a grip on what prices will do, he said. These are the refiners that have closed or cut capacity: Lyondell said in April of 2022 that it would permanently shut the refinery by year-end 2023, as it was unable to find a buyer and did not want to invest to keep the facility open. 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. Prior to the pandemic, experts were already predicting a major downturn in the oil refinery sector across Europe, with companies having to rationalise their presence across the continent, particularly in light of the ageing nature of many of the refineries themselves. "With companies. Individuals should consider whether they can afford the risks associated to trading. By Alex Kimani - Dec 29, 2022, 11:00 AM CST. And there's a good chance it never will. What capacity that has been added since that time has been the result of expansion of pre-existing refineries and the building of smaller facilities with less than 50,000 bopd capacity and are thus exempt from certain EPA permitting processes. Biden spoke at the 29th AFL-CIO Quadrennial Constitutional Convention in Philadelphia. "The narrative until today was that we were going to be driving electric vehicles by the end of the year. (LogOut/ 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. 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. 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. Right now, all bets are off.. Thursday, May 12, 2022. President Joe Biden has repeatedly slammed the U.S. fossil fuel industry for allegedly profiting while Americans are suffering from high gas prices, and he resists expanding refinery capacity, even as he continues to hobble producers, including delaying lease . 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. Second-largest Valero Energy Corp is targeting between 85% and 88%, down from 97% last quarter. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. 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. There's just fewer refiners in the U.S. today than a couple of years ago. 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. 74-89% of retail investor accounts lose money. The oil company's Santa Maria Refinery has about 110 . Throughput at its French refineries was up 3% on the quarter at 274,000 b/d but remained 46% down compared with 2019. CRONIN: That's Patrick. See here for a complete list of exchanges and delays. The payment will decline to zero if margins increase to $10.20 per barrel. Just last Friday, in its response to Bidens intemperate attack during a speech at the Port of Los Angeles, ExxonMobil noted that it is in the process of expanding its own refining capacity in the U.S. by 250,000 bopd. 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. Five refineries have shut down in the United States in just the past two years, reducing the nation's refining capacity by about 5 percent and eliminating more than 1 million barrels of fuel. On Twitter @colin_atagi. This proved not to be the case in February of this year, however, when unseasonably freakish arctic weather temperatures dropped as low as -13C in Austin, -15C in Dallas and -23C in Amarillo led to the largest refineries in North America having to be shut down across the state. (LogOut/ From the industrial separation & filtration experts. The Biden administration envisions a future where the world is powered by clean energy rather than oil with its destructive effect on the environment. (Photo by George Frey/Getty Images). By 2022, EIA similarly forecasts global consumption of petroleum and liquid fuels to increase by 3.6 million b/d. In the interim, the company will continue serving the fuels market, which is expected to remain strong near-term.. 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. PATRICK DE HAAN: There's been a tremendous challenge with the refineries being able to meet demand that has resurged as the economy continues to gain momentum post-COVID. Eduardo Munoz Alvarez/Getty Images "You're talking about a lot of money to get these refineries that are idled up and runningwhen I'm being told five years from now, we hope you don't exist," Cinquegrana says. 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. Once the assembly line at the Toledo North factory shuts down, Chrysler will begin preparing the plant for the Liberty's successor, scheduled to go on sale next spring. Denton Cinquegrana, chief oil analyst with the Maryland-based Oil Price Information Service, wouldnt rule that out, but he cautioned that fuel prices tend to be unpredictable. Meanwhile, six refineries with a capacity of about 801,000 bpd of oil have shuttered over the last two years amid the pandemic, federal data showed. 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. 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. It occurred at the Richmond-based Chevron Richmond Refinery, which reportedly experienced power problems. Until now, California fuel costs followed worldwide trends. "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 . When the pandemic hit and demand for oil evaporated during the recession, refineries took a big financial hit when the price of gasoline plummeted. 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. UPDATE: This article has been updated to include comment from LyondellBasell Industries on its plans to cease operations in 2023. Image Drilling for oil . 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. Refineries Shutting Down. 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. Santa Rosa resident Alex Prince said it gave him hope that the cost of driving would be more affordable by Halloween. Shutdowns, or at the very least reduced production, have been reported at four California refineries, as well as at one in Washington, experts say. Sadly, it always seems to take a crisis for politicians to begin to wake up to the folly of their own actions. 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