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 Paramount refinery began operating in the 1930s. Thus, the President whose administration has been actively trying to limit the domestic oil industrys ability to get its business done is now so desperate to shift blame for high gasoline prices that he resorts to the pretense of being disappointed that that has been happening. Like Marathon, Valero has not given any indication when the refinery will be back up. The national average price of gasoline surpassed $5 a gallon for the first time ever this month. Santa Rosa resident Alex Prince said it gave him hope that the cost of driving would be more affordable by Halloween. LyondellBasell plans to shut down its Houston refinery at the end of 2023, impacting 550 jobs. Reports also came in on Monday. (Photo by Justin Sullivan/Getty Images) Its forward progress could shut down that regions refineries. Underpinning the decisions not to reopen refineries is the fact that the U.S. is undergoing an energy transition from fossil fuels to renewables. ExxonMobil's profit in the first quarter more than doubled from a year earlier. Find out more about how we use your information in our privacy policy and cookie policy. hide caption. Cinquegrana said only one of the four California refinery shutdowns was unplanned. Its hard to get a grip on what prices will do, he said. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. US governments accomplished this through various methods, including increasingly restrictive environmental regulations. So who cares about refined products? The Midwest is also seeing supply constraints . By 2022, EIA similarly forecasts global consumption of petroleum and liquid fuels to increase by 3.6 million b/d. The result was that five refineries across the US shut down permanently. Eni is evaluating the conversion of the Livorno refinery in Italy into a biorefinery. Change). 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. 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. We, Yahoo, are part of the Yahoo family of brands. 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. The Houston, Texas, facility which is operated by LyondellBasell Industries, spans 700 acres and was built in 1918 is . Merchant of Record: A Media Solutions trading as Oilprice.com, That email address is already in the database. As of Monday, his agency reported Santa Rosas average price for a gallon of regular unleaded fuel was $6. EMBED <> More Videos LyondellBasell plans to shut down its Houston refinery at the end of 2023, impacting 550 jobs. 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 Houston Refinery is currently. Thursday, May 12, 2022. Gas prices started skyrocketing following a raft of sanctions on Russian oil, after its invasion of Ukraine in February. In the interim, the company will continue serving the fuels market, which is expected to remain strong near-term.. 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. No profanity, hate speech or personal attacks. 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. Eduardo Munoz Alvarez/Getty Images Those that remain are running at 94% capacity. Of the three California refineries undergoing scheduled maintenance, one is in Benicia and the other two are in Los Angeles. 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. 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. In fact, some refiners have repurposed their facilities, where instead of making gasoline from oil, they're ramping up to produce renewable diesel and sustainable aviation fuel out of feed stocks like soybean oil and used cooking oil. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. In addition, five refineries with a capacity of 408,100 bpd of oil are idle, the largest number of idle refineries since 2012. It doesnt make sense, the 23-year-old said. And there's a good chance it never will. 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. Neste, having ceased refining operations at the Naantali refinery in Finland, announced plans to develop the Porvoo refinery in their own words - "towards co-processing renewable and circular raw materials.". Start Trading CFDs Over 2,200 Different Instruments, Germanys Natural Gas Bill Doubled In 2022 Despite Import Volumes Falling, Shells leadership considered ditching Europe. The end of the Keystone pipeline is also troubling for the oil gas . HOUSTON, Texas (KTRK) -- LyondellBasell is leaving the refining business. This is a family newspaper, please use a kind and respectful tone. This is so, so frustrating, Hogan said. We average between 2 and 3 posts a day. Fire smolders at an oil refinery that triggered several large explosions at the Philadelphia Energy Solutions Refining Complex on June 21, 2019. Click Manage settings for more information and to manage your choices. According to the International Energy Agency (IEA . (Photo by Justin Sullivan/Getty Images). Change), You are commenting using your Twitter account. 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 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. 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. As for turning back on idled refineries, that's not a quick fix either. Reports also came in on Monday that Valeros Houston refinery was flaringa safety event used to manage excess material. 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. 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. 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. Second-largest Valero Energy Corp is targeting between 85% and 88%, down from 97% last quarter. With gas prices surging past $5.00 a gallon, many Americans are wondering what is the problem. Fill in your details below or click an icon to log in: You are commenting using your WordPress.com account. Search Posts. Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. 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. Crude oil production stopped and was permanently shut down in 2017. Shutdowns, or at. 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. Information about your device and internet connection, like your IP address, Browsing and search activity while using Yahoo websites and apps. (Photo by George Frey/Getty Images). 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. Shutdowns, or at the very least reduced production, have been reported at four California refineries, as well as at one in Washington, experts say. The U.S. hasn't constructed a major petroleum refinery since 1977 even as fuel demand and domestic oil production have surged in recent decades. The Biden administration has reportedly considered addressing the declining refining capacity, but has yet to act on the issue. 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. Elsewhere in the world, capacity has shrunk by 2.13. "With companies. 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. Like Marathon, Valero has not given any indication when the refinery will be back up. Refineries transform that oil into products and sell those. Additionally, refining investment is still underway. 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. On Monday, a barrel of oil sold for as little as $76 the lowest since January but thats a reflection of worldwide trends as opposed to whats happening on the West Coast. 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. Overall, operating U.S. refineries had a capacity of about 17.7 million bpd of oil and produced about 9.5 million bpd of gasoline, 4.7 million bpd of diesel fuel and 1.3 million bpd of jet fuel in 2021. And that's when you shut down refineries," says Denton Cinquegrana, chief oil analyst at Oil Price Information Service. 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. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. "I think the refining executives say, well, looks like the writing's on the wall," Cinquegrana says. Of course, COVID and the government lockdowns also had a major impact, as they basically shut down the US economy. Sonoma Countys average on Monday was $6.03 per gallon, which was outpacing Californias overall average of $5.80 per gallon. 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. Some refineries shuttered during the pandemic-induced recession in 2020, when demand for gasoline took a nosedive. 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. Of the two remaining Australian refineries, Geelong in Melbourne is the largest, with a capacity of 128,000 bpd, but is by no means guaranteed to remain in operation with the owners, Viva Energy, accepting a government subsidy but refusing to rule out closure. The oil company's Santa Maria Refinery has about 110 . The drop in capacity was driven by a 13% drop in gasoline consumption, and prices for gasoline and diesel hit a four year low. Refiners turn crude oil into usable products like gasoline, diesel, and jet fuel. 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, Goldman Sachs predicted refinery rates in 2021-2024 to be 3% lower relative to 2019, something which they felt would lead to more competition and permanent closures. 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. 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. In February, news and content in a highly-customised workflow experience on desktop, web and mobile impacting jobs! Santa Rosas average price for a gallon of regular unleaded fuel was 6... Reports also came in on Monday that Valeros Houston refinery was flaringa safety event used to manage excess.. 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