LyondellBasell, the owner of one of the oldest refineries in Houston, became just one of the latest refineries to close amid rising gas prices.
“These decisions are never easy, and we understand this has a very real impact on our refinery employees, their families, and the community,” LyondellBasell interim CEO Ken Lane said in a statement over the weekend. [bold, links added]
The closure is not limited only to LyondellBasell. Houston oil analyst Andy Lipow pointed out that other Gulf Coast refineries have faced the same fate.
“This is the third refinery on the Gulf Coast that is being shut in the last couple of years,” Lipow told Fox 26.
American refinery capacity has been on the decline in recent years, according to Fuels Market News’s latest Refinery Capacity Report.
The report found that operable atmospheric crude oil distillation capacity in the U.S. fell from 19 million barrels per calendar day at the start of 2020 to 18.1 million at the start of 2021.
It marked the first decrease in refinery capacity since 2017, the report noted.
Much of that dip in output can be blamed on refinery closures such as the one in Houston, with the report noting that five facilities shuttered during 2021, including the Shell refinery in Convent, Louisiana.
Other states that saw a refinery closure include New Mexico, California, North Dakota, and Wyoming.
While some refinery closures have been blamed on pandemic market conditions that led to a decrease in demand for fuel, others believe the closures will only accelerate in the future.
Phil Flynn, a senior account executive/market analyst at the Price Futures Group and FOX Business contributor, warned that strict regulation under the Biden administration will continue to put pressure on refineries to stay in business.
“It wasn’t too long ago the country was clamoring for the industry to buy and build new refineries because they couldn’t keep up with demand,” Flynn said Monday.
But government pressure to wean the country off of fossil fuels has made business difficult, with Flynn arguing that “refineries are getting squeezed out of business because of stricter regulations from the Biden administration and the pressure by the government” to “reduce demand for gasoline.”
Flynn believes the new reality “will impact prices Americans pay at the pump.”
“The problem with this is that we’re already seeing it impact people at the pump,” Flynn said, adding such factors have “caused the run-up in the price of gasoline this summer.”
“It is also added to inflationary pressures,” Flynn said. “Ultimately, the lack of refining capacity is going to be an issue and presents challenges for economic growth.”
LyondellBasell said it has attempted to find a buyer for the facility, but the economic realities were that it could no longer wait to pull the plug.
The 700-acres site can process 263,000 barrels of crude oil every day into fuels and petroleum products.
Flynn warned that without a buyer for the facility, Americans can expect to feel the impact at the pump.
“Hopefully somebody will step in and buy this refinery,” Flynn said. “But if they don’t, I would expect that it will add at least 5 to 10 cents a gallon over the long run for consumers.”
Read more at Fox Business
How many in total?
Unfortunately it seems like the globalist[ who are not even elected ] are winning the battle to have all of us slaves to their every whim. They hate people, they hate USA, they are using Biden as their dictator to destroy us so they can send in the evil one to ” save” us and ” fix” the problems THEY created.
The intention is to make fuel so expensive that even electric cars and the like would be acceptable. But they might be acceptable if and only if there is enough energy from the sun to keep solar prices down. Which is impossible, so fuel will always be needed and electricity prices will always rise with fuel costs. The only tiebreaker is nuclear; which is why that’s not wanted either. The choice is catastrophe or buy your fuel from unregulated Putin or anyone else outside the US; so who’s the traitor? If you had a Queen or a King, they’d be chopping heads by now.
The Clinton’s+Obama+UN+Globalists=Treason
Oh, and now that the U.S. Fed Gov’mt has succeeded in getting more oil refineries to shutter, time to call them on the carpet to ask why gasoline prices are so high? Must be price collusion and unfair pricing. Said the politicians who have no idea what a market is and how it functions.
Apparently Senate Majority Leader Shumer & House Speaker Pelosi held a “presser” earlier today to announce increased FTC enforcement measures & an investigation into oil industry “price gouging” & market manipulation. Really? My dad was a football coach when I was growing up & playing ball in Texas. He said it best…”Winners look for RESULTS…LOSERS look for BLAME.” I’d say that applies pretty nicely in this case.
Oh, forgot one: 5.) A large “chunk” of Gulf Coast refining capacity requires heavier crude blends. That’s because we used to heavily rely on Venezuela. Mexico, Russia & other sources This plays into the Keystone XL as those heavier Canadian oils (despite bitumen content) were replacing most of that supply. It will be costly to convert those facilities to lighter blends (i.e. Bakken, WTI), let alone the permitting headaches. Again, ADD IN all the ESG/SEC negative signals in the financial arena and with tight refining profit margins, you begin to understand why Lyondell, Shell et al are RELUCTANT to engage in the risk of capital investment. Welcome to the energy arena. No “EASY Button”…
As to #5, the refineries won’t convert to run lighter blends, just have to de-rate the facilities — less efficient operation. Why will oil companies invest to run a different crude slate when the entire weight of the Fed Gov’mt is aligned to put you out of business. All investments now are strictly to stay in operation.
Well, let’s further complicate the subject matter. In addition to tight margins that are “squeezing out” older & smaller (often independent) refiners & Administration polices that are largely “hostile” to the industry, consider these additional factors: 1.) U.S refineries have LONG run at near capacity, so ANY shut-downs or interruptions at a major facility will (by default) send a “shock” through the market. 2.) The last refinery to be built in the U.S was something like back in 1978. While industry has applied “patches” with upgrades, you have a LOT of antiquated equipment. Feeds into the probability of interruptions or worse yet, equipment failures & upset conditions. Nice way to say LARGE, fiery industrial accident. 3.) GOOD LUCK getting all the required permits to build a new refinery or a major expansion at a facility above a certain threshold. Like the pipelines, the environmental NGO’s will make certain to “bleed you out” in the process. This is a WAR to these fanatics, so that pitched BATTLE has long discouraged investment. The Biden Administration has just applied the “icing” to this cake. 4.) With something like 38 “boutique” gasoline blends around the U.S and low sulphur diesel requirements, we have created a confusing (and constrained) fuel market. This puts additional strain on distillation & product distribution. Add in the inefficient ethanol blending standards imposed and that is about the last straw to break the proverbial camels back! Quite frankly, I am AMAZED the domestic refining sector has remained as robust as it is with all the “hurdles” in place. This is a LOT more challenging than most people realize. Not saying I have any answers, but I know one thing for sure. The current Administration sure doesn’t offer any solutions…i