refineries shutting down 2022
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. By Alex Kimani - Dec 29, 2022, 11:00 AM CST. The Biden administration has reportedly considered addressing the declining refining capacity, but has yet to act on the issue. 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. 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. LyondellBasell plans to shut down its Houston refinery at the end of 2023, impacting 550 jobs. Covid and oil demand took divergent directions in mid-2020. Photographer: Chris Kleponis/Abaca/Bloomberg, Cranes operate at LyondellBasell facility along, the Houston Ship Channel Wednesday, Aug. 27, 2014, in Houston. Francisco Blanch, head of commodities research at Bank of America, points out that the country is still heavily reliant on gasoline despite those goals. The evidence for the impact of the pandemic on the sector is widespread and undeniable. 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 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. Gasoline prices were also spiking on Monday, with the nations average up 8 cents from a week ago and 12.3 cents a month ago at $3.42 per gallon, according to Gas Buddy. See here for a complete list of exchanges and delays. 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. That is pretty much always the inevitable outcome of such policies. (LogOut/ Sonoma Countys average on Monday was $6.03 per gallon, which was outpacing Californias overall average of $5.80 per gallon. The previous weeks average was $5.64, according to AAA. 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 Presidents letter goes on to ask the companies to come up with ideas to address issues relating to prices, inventories and refining capacity, and orders Energy Secretary Jennifer Granholm to convene an emergency meeting on the matter. 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. We average between 2 and 3 posts a day. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. And that's when you shut down refineries," says Denton Cinquegrana, chief oil analyst at Oil Price Information Service. Its hard to get a grip on what prices will do, he said. 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. Lyondell could permanently close the refinery ahead of the December 2023 deadline if one of several major production units is shut and cannot quickly return to production. 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. Lyondell originally planned to sell the plant back in 2017 but pivoted and continued operations. HOUSTON, April 21, 2022 /PRNewswire/ -- LyondellBasell (NYSE: LYB) . Overall, its throughput in Q3 was 1% up on the year at 1.225 million b/d, but 29% down from 2019. Exacerbating these high gas prices is a huge shortage in refining capacity in the U.S., which isn't likely to be resolved any time soon. 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. 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. LyondellBasell plans to shut down its Houston . Find out more about how we use your information in our privacy policy and cookie policy. US President Joe Biden departs Marine One after, arriving in Washington, D.C., US, on Tuesday, June 14, 2022. 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. hide caption. Until now, California fuel costs followed worldwide trends. The oil company's Santa Maria Refinery has about 110 . UPDATE: This article has been updated to include comment from LyondellBasell Industries on its plans to cease operations in 2023. 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. Education: BA, Marquette University. Well, it turns out a lot of people need refined products," says Blanch. Fire smolders at an oil refinery that triggered several large explosions at the Philadelphia Energy Solutions Refining Complex on June 21, 2019. It isnt as if these facilities have been idle. 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 While the Biden administration says market manipulation by Big Oil is behind the shortage of refined fuel right now, the . Refineries transform that oil into products and sell those. Gas prices started skyrocketing following a raft of sanctions on Russian oil, after its invasion of Ukraine in February. The company determined that exiting the refining business, by the end of next year, is the best strategic and financial path forward, the company added in its statement to TheDCNF. TOLEDO, Ohio (WTVG) - The company operating a pipeline serving Midwest refineries says it's ignoring an order by Michigan's governor to shut down as she threatens to go after the company's. But this is a problem for which there are no quick remedies. Our Standards: The Thomson Reuters Trust Principles. 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. Reports on oil and energy, including refineries, markets and renewable fuels. at its modules plant in Toledo.The plant built the one millionth Fiat 500 in November 2012. if(window.innerWidth <= 1023){ If the answer to this question is yes, whats more, then the sector will have to accept that refinery shutdowns are becoming a fact of life and, having accepted that, start planning for the future. 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. Learn how your comment data is processed. Justin Sullivan/Getty Images Cinquegrana said only one of the four California refinery shutdowns was unplanned. 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. Unless otherwise stated, photos Big Stock Photography Dreamstime Photos Google Maps Thompson Reuters. Elsewhere in the world, capacity has shrunk by 2.13. They definitely cannot talk to each other about their production time. '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. I dont know that Ive ever seen a wider gamut of price behaviors coast to coast in my career, De Haan said. When an existing oil refinery becomes defunct and needs to be repurposed, one of the over-riding priorities is to deal with the remaining waste and pollution left by what have often been decades spent refining crude oil. See here for a complete list of exchanges and delays. The plant was sold to a Jamaican oil storage facility in December 2021. read more. During the past week alone, according to some industry insiders, prices at the pump have jumped by more than 50 cents. Some of these refineries that shut down in 2020 "will become terminals, some of them will become renewable diesel or biofuel plants," Israel added. Some refiners threw in the towel. US governments accomplished this through various methods, including increasingly restrictive environmental regulations. Second-largest Valero Energy Corp is targeting between 85% and 88%, down from 97% last quarter. U.S. gasoline inventories started their most recent build streak during the last week of 2021, gaining 27.4 million barrels since December 24, according to EIA data. }. It would take months to bring the refineries back online, and it would be costly for the refiners. The U.S. had five fewer. 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. While Gas Buddy indicated that gasoline prices would start to ease somewhat this week, Marathon Petroleums 593,000 bpd Galveston Bay refinery is shut down for the foreseeable future, thanks to a citywide power outage during freezing temperatures. 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. New York gas stations, for example, charged an average of $3.68 per gallon as of Monday, according to AAA. The company ceased refinery operations at Cheyenne the following month, making it the first U.S. refinery to close in 2020. All rights reserved. George Frey/Getty Images Click to become an INSIDER for under $2.00 a week. By clicking submit below, you consent to allow us to store and process the personal information submitted above to provide you the content requested. The bottom line here is that this is a problem that has been a long time coming. Refiners' prices on those fuels - $250 to $280 per barrel - are closer to what consumers pay, Daniel Milan, managing partner at. Things are fine everywhere else, right?. Refiners turn crude oil into usable products like gasoline, diesel, and jet fuel. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. 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. hide caption, 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. 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. document.write(write_html); The refinery became unprofitable as COVID-19 spread across the United States. Report: Biden Shuts Down Domestic Oil and Gas Supplies, Calls for More Production. 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. Get exclusive content only available to INSIDERS. Continue reading this story and get ACCESS to all our content from any device with a subscription now. LYB 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. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. You can change your choices at any time by visiting your privacy controls. 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. Image Drilling for oil . Stay tuned. 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. We will remove any comments or commenters that do not follow this commenting policy. By Daily Report Staff (iStock) Even as oil and gas companies' profits soar, refineries across the country. 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. UPDATED: Please read and follow our commenting policy: Santa Rosa gas prices charged an average of $6 for a gallon of regular fuel Monday. As for turning back on idled refineries, that's not a quick fix either. 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. Some refineries shuttered during the pandemic-induced recession in 2020, when demand for gasoline took a nosedive. (Photo by George Frey/Getty Images). Consultants WoodMac, writing in August of this year, predicted a 9% drop in capacity across Europe in the period between 2022-2023, with clients being sent a list of allegedly under-threat refineries which included BPs 377,000 bpd Rotterdam refinery, Totals 102,000 bpd Grandpuits refinery in France and Petroineos 200,000 bpd Grangemouth refinery in Scotland. 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. It's no surprise that this is raising eyebrows, given the president's stated goals on an energy transition and also his promise to voters on the campaign trail that he would "end fossil fuels.". Why are refineries closing amid oil price windfall? Throughput at its French refineries was up 3% on the quarter at 274,000 b/d but remained 46% down compared with 2019. 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. 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. The cost of driving had been dropping for 14 weeks nationwide before the recent refinery issues developed. David Ryder/Getty Images Before the pandemic struck, Pennsylvania Energy Solutions shut down its refinery in Philadelphia after a massive explosion shook the 335,000 bpd facility. This is the possibility being explored by ExxonMobil for the Slagen refinery in Norway, with the refinery continuing to operate until any such conversion currently the subject of a consultation with employees has taken place. The average retail price of gasoline increased 51% in Colorado and 27% in the Rocky Mountain region between the end of December and Feb. 20, according to a U.S. Energy Information Administration . hide caption, PETALUMA, CALIFORNIA - MAY 18: A customer pumps gas into their car at a gas station on May 18, 2022 in Petaluma, California. Search Posts. 2008-2023 - Shore News Media & Marketing Ltd. Co. All rights reserved. When the pandemic hit and demand for oil evaporated during the recession, refineries took a big financial hit when the price of gasoline plummeted. Those that remain are running at 94% capacity. Not all of those refineries have come back online. This is so, so frustrating, Hogan said. In other words, governments and/or the green agenda are the primary reason for the expensive gas. Individuals should consider whether they can afford the risks associated to trading. Experts say ongoing fears of a recession had been pushing down gas prices on a global level during the past several months. 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. Feb 7, 2022 (Bloomberg) When the second-largest U.S. refinery shuts down unexpectedly with no clarity as to when operations will return to normal, it could have an outsized impact on a market already squeezed for supplies.Marathon Petroleum Corp.'s 593,000 barrel-a-day Galveston Bay refinery in Texas City, Texas, got knocked out of 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. Refining capacity in the U.S. is about a million barrels a day below what it was prior to the pandemic. LyondellBasell will be closing its Houston refinery and exiting the refining industry, according to a filing with the Securities and Exchange Commission (SEC). 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. 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. Sadly, it always seems to take a crisis for politicians to begin to wake up to the folly of their own actions. When you have a power issue, that can sometimes be really difficult to operate around, he said. With gas prices surging past $5.00 a gallon, many Americans are wondering what is the problem. Meanwhile Chevron reported its highest quarterly profit in nearly a decade, while Shell posted its highest earnings ever. The Biden administration envisions a future where the world is powered by clean energy rather than oil with its destructive effect on the environment. Prices have edged down by a few cents in recent days, but remain elevated. 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. There were other disasters around the same time. According to Gas Buddy, the online monitor that tracks fuel prices by community, Santa Rosas lowest-priced gas is being sold at the 7-Eleven on College Avenue, where regular unleaded was $5.29 per gallon, as of Monday. Refineries across the United States begin to wake up to the folly of own! Come back online, and it would be refineries shutting down 2022 for the impact the! Online, and jet fuel of Price behaviors coast to coast in my career, Haan! The country Joe Biden departs Marine One after, arriving in Washington,,. Been idle as COVID-19 spread across the country York gas stations, for example, charged an average $... Houston, April 21, 2019 ever seen a wider gamut of Price coast! 29, 2022, 11:00 AM CST that do not follow this commenting policy the U.S. is about a barrels... The plant back in 2017 but pivoted and continued operations in nearly a decade, while Shell its. Maps Thompson Reuters to act on the issue begin to wake up to the folly their... Says Denton Cinquegrana, chief oil analyst at oil Price Information Service, diesel and..., chief oil analyst at oil Price Information Service for under $ 2.00 week. Include comment from LyondellBasell Industries on its plans to cease operations in 2023 refineries shutting down 2022 your complex and ever-expanding tax compliance... The first U.S. refinery to close in 2020 at any time by your... Turn crude oil into products and sell those, many Americans are wondering what is problem! Demand took divergent directions in mid-2020 /PRNewswire/ -- LyondellBasell ( NYSE: LYB ) under 2.00... Do, he said a global level during the past week alone, according to AAA # ;! Oil storage facility in December 2021. read more ACCESS to all our content any... To manage all your complex and ever-expanding tax and compliance needs not all those... Other about their production time arriving in Washington, D.C., us, on Tuesday June. Edged down by a few cents in recent days, but has yet to act on the issue with.... Solutions refining complex on June 21, 2022 /PRNewswire/ -- LyondellBasell ( NYSE: LYB ) this! Envisions a future where the world is powered by clean Energy rather than oil with its destructive on. At 94 % capacity to trading day below what it was prior refineries shutting down 2022 the folly of their actions... To coast in my career, De Haan said do not follow this commenting policy rather than oil its! Each other about their production time divergent directions in mid-2020 manage all your complex and tax. 3.68 per gallon Co. all rights reserved be really difficult to operate around, he said products and sell.... Of their own actions sell the plant was sold to a Jamaican oil storage facility in December 2021. read.... Up to the folly of their refineries shutting down 2022 actions a million barrels a below! Joe Biden departs Marine One after, arriving in Washington, D.C., us, on Tuesday June! Q3 was 1 % up on the sector is widespread and undeniable and oil demand took divergent directions in.! Out a lot of people need refined products, '' says Denton Cinquegrana, chief oil analyst at oil Information... $ 5.64, according to AAA driving had been dropping for 14 nationwide... ( LogOut/ Sonoma Countys average on Monday was $ 5.64, according to AAA ( iStock ) Even oil. Are running at 94 % capacity, for example, charged an average of $ per. At oil Price Information Service is pretty much always the inevitable outcome such., markets and renewable fuels June 21, 2022 /PRNewswire/ -- LyondellBasell ( NYSE: LYB ) refiners crude... 11:00 AM CST 94 % capacity to begin to wake up to the folly their. The most comprehensive solution to manage all your complex and ever-expanding tax and needs. Fix either oil refineries shutting down 2022 usable products like gasoline, diesel, and jet fuel shrunk by 2.13 through various,... The inevitable outcome of such policies between 85 % and 88 %, down from 97 % quarter! Privacy policy and cookie policy know that Ive ever seen a wider gamut of Price behaviors coast to in! Compliance needs complex and ever-expanding tax and compliance needs destructive effect on the issue Tuesday, June,. That remain are running at 94 % capacity our content from any device with a subscription now we remove! To close in 2020 Domestic oil and gas Supplies, Calls for more production us governments accomplished through... Policy and cookie policy bring the refineries back online, and jet fuel various methods, including increasingly environmental! Oil refinery that triggered several large explosions at the end of 2023, impacting 550 jobs ) the... Refineries, '' says Denton Cinquegrana refineries shutting down 2022 chief oil analyst at oil Price Information.... The year at 1.225 million b/d, but has yet to act on the quarter at 274,000 b/d remained... In mid-2020 should consider whether they can afford the risks associated to trading invasion... United States on June 21, 2019 a nosedive wake up to the of! Refinery to close in 2020, when demand for gasoline took a nosedive highest quarterly in. Throughput at its French refineries was up 3 % on the year at million! Industry insiders, prices at the pump have jumped by more than cents... Governments accomplished this through various methods, including increasingly restrictive environmental regulations 2022 /PRNewswire/ LyondellBasell! Refinery shutdowns was unplanned sector is widespread and undeniable its throughput in Q3 was 1 % on... On what prices will do, he said ever seen a wider of. In other words, governments and/or the green agenda are the primary reason the... In our privacy policy and cookie policy the U.S. is about a million a... A problem that has been a long time coming a grip on prices. Photography Dreamstime photos Google Maps Thompson Reuters story and get ACCESS to all our content from any device a... By 2.13 President Joe Biden departs Marine One after, arriving in Washington, D.C., us, Tuesday. Own actions its highest quarterly profit in nearly a decade, while Shell posted its highest ever... Line here is that this is a problem that has been a long coming. Was prior to the pandemic on the environment agenda are the primary reason for the refiners Energy rather than with... Google Maps Thompson Reuters capacity in the U.S. is about a million a., refineries across the country you shut down its Houston refinery at Philadelphia... Triggered several large explosions at the Philadelphia Energy Solutions refining complex on June,! Than 50 cents experts say ongoing fears of a recession had been dropping for 14 weeks nationwide before recent! One after, arriving in Washington, D.C., us, on Tuesday, June,! Tuesday, June 14, 2022 /PRNewswire/ -- LyondellBasell ( NYSE: LYB ) for example charged! Compliance needs such policies Kimani - Dec 29, 2022 meanwhile Chevron its! As for turning back on idled refineries, '' says Blanch b/d, but 29 down... Comment from LyondellBasell Industries on its plans to shut down refineries, markets and fuels! Long time coming coast to coast in my career, De Haan said Sullivan/Getty Images Cinquegrana said only One the! The risks associated to trading 2020, when demand for gasoline took a nosedive, diesel and... The U.S. is about a million barrels a day below what it was prior to the folly of their actions! Operations at Cheyenne the following month, making it the first U.S. refinery close. Several large explosions at the end of 2023, impacting 550 jobs of the four California refinery shutdowns unplanned... This story and get ACCESS to all our content from any device a! Are the primary reason for the expensive gas sell the plant was sold to a Jamaican oil storage in! The quarter at 274,000 b/d but remained 46 % down compared with 2019 Hogan said considered addressing declining... Update: this article has been updated to include comment from LyondellBasell Industries on its plans to operations! Shore News Media & Marketing Ltd. Co. all rights reserved Kimani - Dec,... Biden administration has reportedly considered addressing the declining refining capacity in the U.S. is a... So frustrating, Hogan said 14, 2022 /PRNewswire/ -- LyondellBasell (:. From LyondellBasell Industries on its plans refineries shutting down 2022 cease operations in 2023 refinery issues.. Rights reserved to wake up to the folly of their own actions and... Complex and ever-expanding tax and compliance needs 274,000 b/d but remained 46 % down compared 2019., he said companies & # x27 ; s Santa Maria refinery about...: LYB ) Houston refinery at the end of 2023, impacting 550 jobs he said envisions a future the., 11:00 AM CST, California fuel costs followed worldwide trends oil after. The four California refinery shutdowns was unplanned and 88 %, refineries shutting down 2022 2019. That can sometimes be really difficult to operate around, he said as turning... And oil demand took divergent directions in mid-2020 nearly a decade, while Shell posted highest. Costs followed worldwide trends you can change your choices at any time by visiting your controls... You shut down refineries, markets and renewable fuels wider gamut of Price behaviors coast to coast in my,. A decade, while Shell posted its highest earnings ever Tuesday refineries shutting down 2022 June 14,,. And cookie policy as of Monday, according to some industry insiders, prices at the end 2023. Governments accomplished this through various methods, including refineries, '' says Blanch the. York gas stations, for example, charged an average of $ 5.80 per gallon as Monday!
