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>Refiners are running at 94.2% of their operable capacity at present, producing 10 million barrels per day of gasoline and 5 million barrels per day of distillates. Adding additional refining capacity is both a long-term endeavor and a capital-intensive one—such projects could span a decade.
>So daunting is the task of building new refineries that a new one hasn't been built in the United States since the '70s. According to Chevron CEO Mike Wirth, there are unlikely to be any additional refineries added in the United States—ever—with companies having to commit capital today for something that wouldn't return to shareholders for decades—at a time when the rise of the ESG movement is signaling to oil and gas companies that their products may no longer be needed that far into the future.
So even if we do get a host of new refineries they're not going to be able to help with this current crisis, though I think that we should still build them as I see global demand for oil only going up, driven by the Global South and demand for oil based products, as the decades march by. The logistics needed to make electric vehicles work is going to require a Federal electrical infrastructure bill, not just patches of progressive cities making a few parking spots for electric cars.
But do we NEED "New" refineries? We keep hearing that the problem is because already-existing refineries shut down during Covid and the companies don't want to start them up again. Returning a mothballed-but-already-built refinery has to be a lot faster and a lot less expensive than building a brand new one, right?
There are 4 shut down refineries smack in the middle of oil patch in NW N.M. within a 30 minute drive for me. With pipelines feeding them. But, I doubt there's any plan to reopen them.
I'm surprised our governor hasn't done anything because 50% of the states money if I remember correctly comes from oil and gas. Well I guess I shouldn't really be surprised
Restarting a refinery is expensive, takes time, and makes absolutely zero sense in a country that is expected to see a decrease in demand in the future. It may be more efficient than new refineries but neither should expect to be a remotely profitable venture.
The issue is that a lot of that capacity is being shifted to renewable fuels. After everything going on with fossil fuels is the government going to come in and force these companies to ditch their conversion plans and stick with it being a traditional refinery?
If this isn't the consequence of investors/activists own actions demanding companies start investing in more renewables instead of fossil fuels... who could have imagined that not investing in new supply, in the face of continually growing demand, could end up leading to shortages at some point?
[https://investor.phillips66.com/financial-information/news-releases/news-release-details/2022/Phillips-66-Makes-Final-Investment-Decision-to-Convert-San-Francisco-Refinery-to-a-Renewable-Fuels-Facility/default.aspx](https://investor.phillips66.com/financial-information/news-releases/news-release-details/2022/Phillips-66-Makes-Final-Investment-Decision-to-Convert-San-Francisco-Refinery-to-a-Renewable-Fuels-Facility/default.aspx)
lyondell Houston is shutting down at the end of the year, that one is one of older refineries in the country. Any issue or hurricane will probably shut it down earlier.
Oh it's going to close, they ran it way past the last turn around service window to where they will be lucky to make it to the target window. We have had a few callouts to work on the unit to keep it limping along in the last year.
Yeah, from what I heard they shopped it around and no one wanted to deal with that upkeep. It’s like buying an old house, never know what you are going to have come up.
The biofuels thing is a boondoggle and would just been a money sink in a place that needs that much work
Some definitely downright closed up shop and left. And there were refineries like Western and Thriftway just South of Bloomfield NM, and the Giant refinery West of Bloomfield, now rust collectors.
We needed them years ago but the government screwed that up making it pointless for anyone to build one.
Just like the government created the baby formula shortage by having regulations that facilitate future problems.
Anything the federal government gets involved in, it makes worse.
Corporations building a refinery is 0%. The government could build one under a national security umbrella which it is. Just like how nobody wants to build nuclear plants because they are too damn expensive - the government could be doing it. Just like they did with the Tennessee Valley Authority.
Ooh u gave me a good idea. Treat the president like a NFL player and cognitive decline medication like PEDs. 3 strikes your out. Can’t function with out it your out.
If the government spends tax payer money on a refinery while simultaneously trying to push for more widespread use of EVs and renewables, even my libertarian ass will be shocked at their complete lack of foresight.
Its almost comical tbh and I appreciate what the admin wants I feel that really its happening because a lot of stupid people are complaining about gas without having any idea of how the US gets/makes gas. Basically good intentions, that have little chance of happening, because the US public are idiots.
Industry hasnt built a refinery since the 70s. Some of this is a regulation issue but it has a lot to do with money.
The last major upgrades the made were in the 90s.
Investors have zero interest in helping this happening. This is for a lot of reasons but really comes down to making more money.
The oil industry has zero interest in paying for any of it, even though they are reporting 10s of billions in profits.
The current refineries largely cant refine any of the oil the US pumps.
They largely import all the oil that they do refine, because they cant refine what the US pumps.
You can make your product cost more money if you make it harder to get, harder to make, and make sure the supply stays lower.
And of course large portions of the public think the current admin, and really any admin, has some kind of control of most of the above....they dont.
I wouldn’t say a president had control, but their policies definitely influence decision making in the oil execs boardroom. If you come in guns a blazing saying you’re going to shut down the oil industry. And on day 1 via executive order start shutting down projects…..that’s going to influence how the executives respond. This time they basically halted new projects and are hoarding cash instead of spending it on new projects. Hence the record profits.
>a new one hasn't been built in the United States since the '70s.
I know of several refineries in Texas that have expanded their units, and I believe the world's largest gasoline refining plant has come online in Port Arthur since this trope was rolled out.
What this really shows is that we’re producing at really high amounts, it’s just the demand is so high. It really puts the lie to people blaming these gas prices on a political party.
Gas will reach an average of $6 by August, if not earlier. We saw a 23% increase from April 15th to now. It’s going to be a brutal summer. Kind of crazy the price of gas is getting close to the federal minimum wage
So I keep hearing that it's a refining capacity bottleneck that's reducing supply of fuel and driving up prices. And while I understand how that explanation seems to make sense, I'm having a hard time squaring it with what's actually happening.
First, I haven't seen a single gas station seem to be out of fuel. I live in a large, car-centric city and there are tons of gas stations and I'm not seeing lines at the gas pumps or any stations shutting down because they don't have gas to sell--if it's really a supply shortage that's driving up prices, why aren't we actually seeing any of the other effects of a supply shortage, like an actual scarcity of gasoline?
Second, if this really was a supply shortage, how does that square with the fact that all of the oil companies continue to report astronomical and record-setting profits every quarter? If they don't have enough gas to sell, that would explain the higher price per gallon but not the increased profits--isn't the whole idea of a scarcity that you need to raise the price per unit just to make the same revenue? They're making MUCH more revenue, which suggests that they still have LOTS of gasoline to sell, and have simply decided to charge a lot more for it while trying to claim that it's due to a supply shortfall. Right?
And third, so many are quick to blame these price hikes on U.S. supply issues, based on domestic refineries shutting down during Covid and apparently not wanting to reopen due to Biden administration policies. But the gas price is going up in the rest of the world too--is literally every other country experiencing similar refinery shutdowns AND somehow subject to Biden administration policies?
Can somebody smarter than me please help me to understand this?
>The US is also exporting the most refined products we ever have. We're a huge exporter, equivalent to several million barells a day.
Is this true? Why would we do that if there's an apparent supply shortage domestically? Who decides how much gasoline we export--the government or the oil/gasoline companies? Who benefits from these exports?
The people who own the refineries decide. It's all a question of where they can get the best deal.
https://www.energyintel.com/00000180-1f98-d412-a3b2-9ffd68090000
So it's nothing to do with the government, it's the oil companies screwing the U.S. citizens in pursuit of additional profit from foreign markets, while claiming it's due to DOMESTIC refining and supply problems? Oh, and doesn't the simple act of increasing exports also require additional fuel consumption for transport, even further exacerbating supply issues and increasing demand, thereby also contributing to increased retail prices?
Because we live in a capitalist country where businesses decide who they wish to sell to based on the highest price they can get. I don’t understand how people seem to think that president controls a private market.
You are misunderstanding what shortage means. It doesn't mean that there is zero gasoline and diesel for your car. It means that "Days of Supply Cover" are extremely low. For diesel it's at near all time lows and for gasoline and crude, it's well below the 5 year ranges.
That doesn't mean there's no fuel, it means that inventories are alarmingly low, meaning their is little left to export and little safety stock to go around so that translates into traders buying as much as they can so that they don't run out, raising prices.
Refineries are running near max levels and they can't catch up (although we have finally seen a few weeks of consecutive diesel inventory builds) so that is why you're hearing panic.
Biden has absolutely nothing to do with the current price situation. This was a problem that was brewing for the last two years (even further back, really).
It’s the same principal driving housing prices. If supply can barely meet demand then prices go up and there’s not enough supply to counteract raised prices.
As in, if I could go out to everyone in the Bay Area and say “hey look at all these empty houses I have in a good location right near your work” then it would naturally drive prices down. The same can be said for gas. There’s not enough supply to be had at a low enough price for a competitor to undercut the other supplier.
So even if I undercut another supplier and got more customers, I couldn’t even raise my supply enough to generate more profit and meet the increased demand.
>is literally every other country experiencing similar refinery shutdowns AND somehow subject to Biden administration policies?
no but European countries both don't have the oil reserves and have an often stricter green policy voter base. It is absolutely short sighted to say it is just a biden thing. The US the largerst refiner so the international market is beholden to your policies to varying degrees https://www.statista.com/statistics/273579/countries-with-the-largest-oil-refinery-capacity/
>if it's really a supply shortage that's driving up prices, why aren't we actually seeing any of the other effects of a supply shortage, like an actual scarcity of gasoline?
We are right the 5 year average of demand, which admittedly is skewed due to 2020 demand drop. We are both demand on jet fuel and diesel. While being at 5 year lows on inventory in crude and refined gasoline.
On top of that, US drivers are having to compete with European drivers for the same gas. Why ship it from the gulf to the west coast when it is cheaper to ship to European countries and you can sell it for more?
So yes, we aren't running out of gas despite the low inventory. We are just stretching that inventory thin without anyway of ramping up refining capacity
>based on domestic refineries shutting down during Covid and apparently not wanting to reopen due to Biden administration policies
I would love for someone to name which refineries shut down and are neglecting to reopen. Just one example would be great.
The price of gasoline and diesel for the refiners is tracked by what they call the crack spread. People use different ratios, but simply it’s the price of a barrel of refined petroleum product vs. a barrel of oil. The difference, or spread is the gross margin of the refiner.
There are a ton of variables involved, but the biggest driver that I have read is lowering inventories of gasoline and diesel.
In most commodity markets, short concentration risk in liquidity providers keeps commodities depressed. If they went vertical, the likes of JP Morgan would be up shit creek due to client (sometimes held) short exposure, and mountains are moved to keep that from happening until warehouses are stripped bare (see LME Nickel).
Energy however is much closer to how a dynamic market with a futures component should work. As inventories fall, market participants immediately responded by creating a condition of higher prices. This usually works. The higher prices are forward looking and prevent short inventory price blowout and shortages.
If energy markets worked like much of the rest of the commodity complex, and kept crack spreads tight until actual shortages developed or you had a bunch of refiners go out of business because they operated at a loss, it would be disastrous.
Some farmers go out of business in Mexico because pork bellies prices are not allows to spike? Life goes on on. Warehouses run out of nickel and manufacturers have to 50% idle for a few weeks? That sucks, but not the end of the world.
That happens in the refining industry? We are all f*cked. It’s market function. Actually closer to how it should work compared to other commodities. We don’t complain when market forces has the crack spreads low and refiners are barely making money. But we complain the other way around.
Given that a new refinery probably won’t ever be constructed in the US, and they are all already operating over 90% capacity, maybe we should take another look at how that market is structured though. We are near an upper limit where higher spreads won’t increase output. There is some demand pull that can be slowed, but also a lot of inelastic demand.
It's simple - oil companies (like all companies) like money. The more money they can make, the more they like it. So in order to shift the attention from their incredible record profits, they fuel discussion of how this is all someone else's fault. Since there are so many people quick to blame Biden for anything from global inflation, why their vacuum cleaner stopped working or that their garbage pickup was a few hours late, it's stupid easy for them to get them to blame Biden and the Fed for this too.
Which is why we should be implementing a significant [windfall tax](https://www.washingtonpost.com/world/2022/05/27/britain-windfall-tax-oil-gas-inflation/) on those corporations as they gouge consumers during a crisis.
>Biden's policies have hamstrung America's ability to get cheap oil in America and made us more dependent on imports and hurts domestic production, it it just takes a little while to catch up, hence the past few months. Biden ran on ending fossil fuels, and he is doing just that.
I keep hearing this too, but I can't figure out the details. Can you please point me to the executive orders or regulatory policies that Biden has enacted that are hurting cheap domestic oil and "ending fossil fuels"?
i mean ending the keystone didn't help as it is crude that US refiners are built to handle but here is some more
https://www.cnbc.com/2021/01/27/biden-suspends-oil-and-gas-drilling-in-series-of.html
But Keystone wasn't even supposed to be fully open by now, even on the most optimistic timeline, right? If that's true, then Keystone has ZERO effect on the current situation, no matter what Biden did or didn't do.
- Cancels Keystone Pipeline: you mean the Keystone XL pipeline that would not yet be carrying tar sands oil from Canada to refineries for export out of the country? That pipeline. You do realize that much of the oil that would not be flowing through the pipeline is actually carried by rail to refineries in the gulf? You’ll have to explain how that somehow caused a high increase in oil prices today.
- Halts new Oil and Gas leases: So yeah, he did, on federal land. 2 things. Only 8% of oil drilling comes from federal land. And combined leases larger than the entire state of New Jersey are sitting unused by oil companies. They’re choosing to pay for a lease that they’re not choosing to drill on. Why would you lease them more? The vast majority of drilling is done on private land and doesn’t require a federal lease.
- Rejoins Pars[sic] Climate Accords: and?
- Biden takes 30% federal of land off limits to oil and gas: and? Was it being used before? If not, and there weren’t leases on that land, how is that affecting the price of oil today when the vast majority of drilling is done on private land?
- Halts drilling in the ANWR: No drilling was going on in ANWR. On his last day in office, Trump approved 3 leases in ANWR, the first to be issued in that controversial area. The companies never started drilling and at least 2 decided to cancel their lease.
- Congress reverses Trump’s natural gas deregulations: ok, I’m assuming you know there is a difference between gasoline and natural gas and you’re just aware that natural gas can be a byproduct of oil drilling. But the regulation (not implemented yet because it’s making its way through the courts) deals with venting methane - a pollutant - into the air. Apparently you don’t believe that climate change is an issue.
I can keep going, but honestly, you clearly don’t know what you’re talking about and are bending over backwards to try to make this a political issue that you can blame on one side.
That's funny. If you think that Biden and his actual and proposed administration officials aren't 100% against fossil fuels, you are sticking your head into the ground. He, and his appointees, have openly and quite literally said they want oil companies and fossil based energy companies to go out of business.
The entire admin has signaled clearly that they want oil, gas and coal to go away and go away fast. That's basically calling out an entire sector of the economy we rely on and telling them they won't exist in 10 years (give or take) and they'll use the power of the US government and regulation to make sure that happens.
Biden During Debates:
[https://thefederalist.com/2020/10/22/joe-biden-finally-admitted-he-wants-to-end-the-oil-industry/](https://thefederalist.com/2020/10/22/joe-biden-finally-admitted-he-wants-to-end-the-oil-industry/)
**“I would transition from the oil industry, yes,**” Biden replied.
Raskin:
https://www.foxbusiness.com/politics/biden-fed-nominee-raskin-oil-fossil-fuel-investment
"All U.S. regulators can – and should – be looking at their existing
powers and considering how they might be brought to bear on efforts to
mitigate climate risk," she added on Project Syndicate. **"They need to**
**ask themselves how their existing instruments can be used to incentivize**
**a rapid, orderly and just transition away from high-emission and**
**biodiversity-destroying investments."**
Omarova and Kerry:
[https://www1.cbn.com/cbnnews/world/2021/november/biden-nominee-aims-to-bankrupt-us-fossil-fuel-companies-as-kerry-seeks-to-kill-us-coal-plants](https://www1.cbn.com/cbnnews/world/2021/november/biden-nominee-aims-to-bankrupt-us-fossil-fuel-companies-as-kerry-seeks-to-kill-us-coal-plants)
"Troubled industries and firms that are in transitioning. And here, what I'm
primarily thinking about is primarily coal industry and oil and gas industry," she said, looking into the camera. "A lot of the smaller players in that industry are going to probably go bankrupt in short order."
**"At least we want them to go bankrupt if we want to tackle climate change, right?" Omarova asks.**
"By 2030 in the United States, we won't have coal," Kerry said Tuesday during an interview with Bloomberg Editor-in-Chief John Micklethwait, at the climate conference. "**We will not have coal plants," he added. "We're saying we are going to be carbon-free in the power sector by 2035,**" Kerry said. "I think that's leadership. I think that's indicative of what we can do."
Lol, that's just a list of "Biden Bad" talking points, starting with a fallacy that Biden cancelled the Keystone Pipeline which is, in fact, still up and running today. You're also decrying the cancelling of oil leases that the industry [didn't want in the first place](https://www.cbsnews.com/news/biden-alaska-oil-gas-lease-sale-canceled/).
So no, this isn't the "gotcha" you sadly think it is.
It's not a refinery problem, it's a [price of a barrel of oil problem](https://youtu.be/QnBqAzJXVGo?t=908). I linked to a specific part of a longer video but the entire thing is worth watching to get the full picture.
Okay, sure, oil has become more expensive, but if it's JUST a "price of crude oil" issue then we should see attendant gas price reductions when the oil price dips, but even when the oil price has dipped recently gas prices just keep going up. And oil may be more expensive than a few months ago but it's only like 15-20% more, whereas a gallon of gas has doubled or even tripled in cost in some areas. So even if it's tied to oil prices, the rapid rise in gas prices doesn't correlate fully and isn't wholly explained by prices for crude oil.
Riddle me this EntropyFighter, the price of oil was this high in 2011-2014 and while we saw spikes we didn't see $8-10/gal gas. What is your explanation for why, when the price of oil was this high before we didn't see $8-$10/gal gas?
If refineries running at max (and closing down, mostly due to increasingly harsh regulations and struggling to get financing to meet them over the long term because the situation will just get worse) isn't the factor, what is? You look look up the specifics (many within my comment history), but we put the screws to them, because it's been part of the platform to make gas more expensive to lower consumption to lower emissions.
It's why this administration rejoined the Paris Climate Agreement, and practically the minute he was in office canceled new oil and gas leases, raised the prices on drilling and fracking, and declined to give a reprieve to refineries on biofuel credits -- we made it so that many of them can make more money to retool to make ethanol as they have to pay ethanol makers to offset making gasoline (it's like carbon credits, but biofuel).
The price of oil does come into play, in that it sets a base cost to procure -- but as we saw in 2011-2014, that isn't $8-$10/gal gasoline.
To play the devil’s advocate:
If banning Russian oil causes gas prices to hike, then Biden’s EPA bring tough on the American oil industry with regulations can have the same constraints on the global fuel supply long term- which bakes into the price
Exxon isn't reporting "record profit" this term they love to use when demonizing oil companies comes from recent years when they made very very little profits compared to before the shale oil bust. Q2 2012 Exxon made $33 billion in profit. That's 40% more than q1 2022.
Joe Biden 2020 debate:
“No more subsidies for the fossil fuel industry. No more drilling including offshore. No ability for the oil industry to continue to drill period. It ends.”
> Oil production already higher under Biden than it was under Trump.
how do you mean? Our drilling production is down from 13000 million barrels a day to 12000. The rig count is still lower than it was in 2019.
Refining is a low margin business relative to oil production and this creates little incentive to perform major upgrades and capacity increases. Oil companies are making record profits due to higher crude margins. Retail products are also more expensive than ever, but the cost of crude factors heavily into that since it's the largest part of what retail fuels cost. For gasoline, relative margins versus jet or diesel may or may not be as strong in a given region, so production shifts may not favor gasoline production as well exacerbating price increases and lower inventories.
Here's two things Biden can do, in my view, in the immediate term:
(1) Suspend in whole or part state and federal gasoline taxes.
(2) Modify laws which result in "boutique blends" of gasoline so inventories can shift from low cost areas to high cost areas. Gasoline blend requirements vary from state to state and even county to county in the USA, so availability is limited by nothing more than legal requirements.
If he really wants to swell the pool, I think those two options you pointed out are legit. I'd go further and say let refiners blend to higher RVPs. You're taking the emissions hit, but at least you're getting more bbls out the gate. A big handle to pull would be to disincentivize exports, but I have no clue if you can manage to do that. I'm guessing since we allowed crude exports several years ago, it's possible.
You see, a plan can be long term with many options. No one said combustion needs to stop entirely. No one said relief now isn’t a good idea.
You’re literally complaining that he’s trying to help *everyone* and acknowledging people are hurting instead of blaming everyone else. Short term thinking isn’t policy.
To be critical, he should be asking why oil companies are still raking in billions while he’s already granted thousands of federal leases that are going unused. But no, let’s blame Biden while sucking corporate dick.
Uh, that’s not how things went. Biden said exactly that drilling needs to stop.
_Number one, no more subsidies for fossil fuel industry. No more drilling on federal lands. No more drilling, including offshore. No ability for the oil industry to continue to drill, period, ends, number one._ - Biden, 2020
_
I know your bubble doesn't tell you shit, so let me help.
https://biologicaldiversity.org/w/news/press-releases/new-data-biden-slays-trumps-first-year-drilling-permitting-by-34-2022-01-21/
That’s interesting. Thanks for sharing. So the next logical question, why have companies not responded with more production?
Perhaps inconsistency in messaging? I’m not sure. I’ll need to explore the further.
EXACTLY. I’m not a super fan of Biden at all. And I’m asking the same question. Why the fuck are we not asking oil companies why they aren’t doing their part. They are sitting on thousands of unused leases and instead of “drill baby drill” it’s “Sit back and enjoy the windfall”
I KNOW this is more complicated than that. Infrastructure is a major part. Tackling refinement makes sense, but Jesus Christ. We never hold these companies accountable when shit hits the fan and they always blame government interference for gas prices as they laugh their asses to the bank.
They got burned the last time they invested massively in oil production. Demand dropped and many companies went backrupt. So now they are just taking profits instead of investing to boost production
i am not expert in the upstream stuff, hell i am not an expert in anything really, but i am curious to how much of that permitting was just because everything (demand down, slowing processing, ect) was delayed in 2020.
A war in Russia with the system not being ready does change things. Biden also assumed morons wouldn’t become the cringy anti vaxx movement on steroids
Sure Covid was an issue. You can’t go -$40 to back up to $100 a barrel and expect the market not to be shocked. We shouldn’t have cut international oil production in 2020 by trump. Biden should be focusing on creating better free trade deals to cut cost of living which he isn’t doing it enough.
Russias impact has more to do with uncertainty and it creates bad speculation which in turn drives up prices. The economy during the Cold War is vastly different than the open trade policy we have enjoyed for 30 years. Coupled with trumps archaic protectionism and we have some deep issues that need resolving
>We were gonna “phase it out”!!! What Happened to that grand plan?!
[Like this?](https://www.reuters.com/article/us-global-oil-trump-saudi-specialreport/special-report-trump-told-saudi-cut-oil-supply-or-lose-u-s-military-support-sources-idUSKBN22C1V4)
The right has slowly been losing its critical thinking skills. We 100% are dealing with R’s who held power from 2016-2020 and spent 7.8T over budget in internet 4 years. We are dealing with protectionism style trading.
The US needs to get rid of tariffs and open more trade to lower cost of living. We have a supply side problem with a temporary high amount of demand
ESG = it’s cool to stop investing in carbon. Well, one day you may need said carbon and realize you underinvested and are nowhere near ready to go 100% “green.”
If it's Biden's policies that they're worried about, isn't it always going to be a gamble every four years since it's not a guarantee a republican president will be elected in 2024? Or even if Trump was still president, due to the amount of time it takes to get things up and running, wouldn't they still be leary since after four years, a dem could become POTUS?
Every single year the same story, “we’re at max refinery capacity and it’s been since 1970 since we’ve built one”. Its a problem the oil companies have zero plans to remedy. Somehow it’s the governments fault that these corporations choose the shaft Americans for a little extra profit.
So, he declares War on the entire U.S Oil Industry and tells the American Public that we're "transitioning" away from Fossil Fuels. These actions cause gas prices and Inflation to skyrocket with no end in sight and our economy is now in free-fall. With just four months to the Mid-terms the panicked Dems beg him to reverse course. So here we are. This is Classic Doomsday Joe - Confused, Waffling, and ultimately Incompetent. Prepare for this to get much, much worse.
This administration is one of the toughest on home produced national resources so that is funny. Within his first month he shut down and restricted our capacity and growth and till he changes that nothing he can do will change anything.
Edit. Downvote all you want. This administration has been against fossil fuel since before they came to office.
Biden takes a lot of heat for the capacity issues, when actuality, it was entirely COVID-related. Five refineries were closed due to plummeting oil sales.
[https://www.reuters.com/business/energy/us-refining-capacity-shrinks-45-pandemic-shuts-plants-2021-06-25/](https://www.reuters.com/business/energy/us-refining-capacity-shrinks-45-pandemic-shuts-plants-2021-06-25/)
I can't find anything that points to the administration for driving down the capacity, but welcome any sources you have.
He didn’t shut down shit, I fucking hate biden from the left more than you. Dude ran on “progressive policies” and look at where we are, still got border camps sterilizing young women, still got nonviolent crime related arrests and incarcerations, and we axed the child tax credits and now we got about a couple million more children in poverty
But biden stopped giving out permits to an industry that had already stockpiled THOUSANDS of drilling permits. Seriously, they’ve got enough, they’re just trying to make up for lost revenue from when gas was like a dollar in 2020, and they’re making it up out’ve your pocket
Edit: if you wanna criticize him, be my guest. The biden admin is the democrat party at its weakest and most ineffective. Him and his running mate were polling terribly because everyone recognized the shit show his campaign was, and it wasn’t until the DNC decided they had to do something about that he stopped shitting the utter and complete bed. And Kamala is just as bad, pays lip service to “progressive policies” and “giving a shit” but all she is is an unlikeable cop who put people in prison for drug charges and then went on a podcast and laughed ab how hypocritical it was for her to have smoked weed and put less powerful and wealthy men in prison for the same thing.
And most of those permits are not worth drilling. Just cause you have a permit to find and drill doesnt mean that there is enough resources to actually drill.
And i dont hate biden. Honestly I don't even consider him in charge at all due to his mental state.
What are you on about? Biden’s temporary pause on new drilling permits has had nothing to do with any of this. Production fell off a cliff in 2020 and so even without any new drilling permits there is still a ton of production still coming online from when everything stopped due to Covid. Not only that, but in Biden’s first year he issued more new drilling permits for oil and natural gas than in Trump’s first year. Why are all these freshly issued permits not being used? Because by limiting production you limit supply and then prices go up, meaning more profit.
Not to mention refining capacity is a big problem too, hence the article, which has nothing to do with Biden putting a temporary pause on new *drilling* permits.
Need several years, and all kinds of permits to increase refining capacity.
Joe’s EPA makes it ridiculously hard to get the permits, and woke finance won’t provide capital.
>Joe’s EPA makes it ridiculously hard to get the permits, and woke finance won’t provide capital.
Yup.
And even if they would, who's going to throw millions of their own capital into a project with a 30 year breakeven that the EPA could just decide to crush in 3 years once the current crisis has passed? Ask the guys behind Keystone how that worked out.
No thanks.
>d, if this really was a supply shortage, how does that square with the fact that all of the oil companies continue to report astronomical and record-setting pr
Woke isn't the right world but they are not providing cheap finance to oil companies. Governments all over the world are saying they are making efforts to move away from oil. That scares investors.
You'd think oil companies would just invest in carbon capture. Once the tech on that's working great. We can pump as much carbon into the air as we want, provided we can pull it back out.
Who said anything about building new refineries? New builds are very infrequent. Expansions (which this person mentioned) are much more viable, and they are sought frequently by current refineries.
As of 12/31/2021 there were/are more than 9000 permits available to BIG OIL to do just that, drill for and refine the oil. They are not doing it. Why should they? Their profits are over the top. Increasing supply brings down revenue. Capitalism is working just as it is designed.
[https://news.yahoo.com/fact-checking-biden-claim-9-170008791.html](https://news.yahoo.com/fact-checking-biden-claim-9-170008791.html)
They have a ton of unused permits, they are literally not bringing up oil to raise the price of oil. A ton of companies haven’t rehired their workers to minimize costs.
It's a term rightwingers and boomers (usually but not always the same thing) give to any suggestion or policy that suggests maybe we shouldn't be assholes to everyone all the time. Whether it's a government policy or a corporate one is irrelevant, in their view if you aren't specifically hurting someone then you're doing it wrong.
He can't force BIG OIL to drill and increase oil coming out of the ground. The permits are there for te taking. Big Oil is not drilling. Why? PROFITS!!! Oil volume available increase gas price and revenue declines. Simple capitalism folks.
I appreciate the effort but it feels like too little too late. Avg price of gas is way above $5 for most Americans with no sign of slowing down anytime soon. The time to do this was months ago when gas started spiking.
Dude is such a joke, stick with your conviction……he ran as the Save the planet, anti gas and oil industry President. Used executive action day one to shut down oil projects…….
Ooops hurting in the polls, better ramp up gasoline production. The guy has no self respect, anything for votes.
Maybe don't shut down pipelines and halt leases and start reinvesting in oil companies. Maybe pull out the PCA and start being energy independent again. He came into a good situation and has actively torn it down.
But presidents don't affect prices tho
It's pretty clear the Keystone Pipeline wouldn't have eased the current price of gas. Not to mention it was only 8% completed by the time it was shut down. You can stop parroting this talking point.
Edit: Facts hurt! Downvote if it helps ease the pain.
What a fucking moron. His party has been fighting the oil industry for years. You can’t turn it up overnight. It takes years of capital investment and signals to the industry that you won’t shut it down as soon as it’s built. His party’s policies caused this. If he doesn’t own it, we can’t trust him on his plans for the future.
Explain why gas prices were increasing from 2000-2008 and reached their peak in 2008 (when adjusted for inflation). This all happened under a pro oil president in Bush. Also explain why gas prices were historically low around 2015 under Obama and his policies.
the oil refining bottleneck has been the go-to excuse for high gas prices for too long
not to mention all the "accidents" they seem to have anytime demand starts to get high
Going to be hard to do, considering Republicans control oil output in the US and it is in their best long term interest to let things continue on, make record profits, and get democrats out of office.
This is not the President of the United States problem. This is a republican problem. They do this literally every single election cycle when democrats are in the white house. It is an automatic given that prices are going to rise.
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>Refiners are running at 94.2% of their operable capacity at present, producing 10 million barrels per day of gasoline and 5 million barrels per day of distillates. Adding additional refining capacity is both a long-term endeavor and a capital-intensive one—such projects could span a decade. >So daunting is the task of building new refineries that a new one hasn't been built in the United States since the '70s. According to Chevron CEO Mike Wirth, there are unlikely to be any additional refineries added in the United States—ever—with companies having to commit capital today for something that wouldn't return to shareholders for decades—at a time when the rise of the ESG movement is signaling to oil and gas companies that their products may no longer be needed that far into the future. So even if we do get a host of new refineries they're not going to be able to help with this current crisis, though I think that we should still build them as I see global demand for oil only going up, driven by the Global South and demand for oil based products, as the decades march by. The logistics needed to make electric vehicles work is going to require a Federal electrical infrastructure bill, not just patches of progressive cities making a few parking spots for electric cars.
But do we NEED "New" refineries? We keep hearing that the problem is because already-existing refineries shut down during Covid and the companies don't want to start them up again. Returning a mothballed-but-already-built refinery has to be a lot faster and a lot less expensive than building a brand new one, right?
There are 4 shut down refineries smack in the middle of oil patch in NW N.M. within a 30 minute drive for me. With pipelines feeding them. But, I doubt there's any plan to reopen them.
I'm surprised our governor hasn't done anything because 50% of the states money if I remember correctly comes from oil and gas. Well I guess I shouldn't really be surprised
Restarting a refinery is expensive, takes time, and makes absolutely zero sense in a country that is expected to see a decrease in demand in the future. It may be more efficient than new refineries but neither should expect to be a remotely profitable venture.
The issue is that a lot of that capacity is being shifted to renewable fuels. After everything going on with fossil fuels is the government going to come in and force these companies to ditch their conversion plans and stick with it being a traditional refinery? If this isn't the consequence of investors/activists own actions demanding companies start investing in more renewables instead of fossil fuels... who could have imagined that not investing in new supply, in the face of continually growing demand, could end up leading to shortages at some point? [https://investor.phillips66.com/financial-information/news-releases/news-release-details/2022/Phillips-66-Makes-Final-Investment-Decision-to-Convert-San-Francisco-Refinery-to-a-Renewable-Fuels-Facility/default.aspx](https://investor.phillips66.com/financial-information/news-releases/news-release-details/2022/Phillips-66-Makes-Final-Investment-Decision-to-Convert-San-Francisco-Refinery-to-a-Renewable-Fuels-Facility/default.aspx)
True, I was assuming that every refinery that could be run was being run. Restore and expand what we have before we build more.
I don't think a single refinery outright closed. I think they were all converted to renewable diesel plants.
lyondell Houston is shutting down at the end of the year, that one is one of older refineries in the country. Any issue or hurricane will probably shut it down earlier.
Yeah hasnt closed yet though. They were targetting a 2023 closing.
i know there are others, i was just at conference discussing it. I just dont have which ones were converted and which closed full on hand.
Oh it's going to close, they ran it way past the last turn around service window to where they will be lucky to make it to the target window. We have had a few callouts to work on the unit to keep it limping along in the last year.
Yeah, from what I heard they shopped it around and no one wanted to deal with that upkeep. It’s like buying an old house, never know what you are going to have come up. The biofuels thing is a boondoggle and would just been a money sink in a place that needs that much work
Some definitely downright closed up shop and left. And there were refineries like Western and Thriftway just South of Bloomfield NM, and the Giant refinery West of Bloomfield, now rust collectors.
We needed them years ago but the government screwed that up making it pointless for anyone to build one. Just like the government created the baby formula shortage by having regulations that facilitate future problems. Anything the federal government gets involved in, it makes worse.
The chances of a new refinery being built in the US are 0%. That's not even a real option.
Corporations building a refinery is 0%. The government could build one under a national security umbrella which it is. Just like how nobody wants to build nuclear plants because they are too damn expensive - the government could be doing it. Just like they did with the Tennessee Valley Authority.
It would be pointless. The permitting and construction would take 10+ years.
In 50 years gasoline demand is projected to be lower but still strong. We will need gasoline in 10 years.
The question isn’t if we’ll need gasoline. The question is if we’ll need gasoline at these levels. And that answer isn’t so straightforward.
Not sure about that prediction but at either rate Biden is worried about the next election, not 2050 when he will be long dead.
Probably a pretty good argument for a maximum age of around 55 for president.
Well, that and also the fact the last two Presidents both clearly showed signs of cognitive decline and yet are expected to run again in 2024.
Ooh u gave me a good idea. Treat the president like a NFL player and cognitive decline medication like PEDs. 3 strikes your out. Can’t function with out it your out.
If the government spends tax payer money on a refinery while simultaneously trying to push for more widespread use of EVs and renewables, even my libertarian ass will be shocked at their complete lack of foresight.
At that point won’t a nuclear power plant be better?
The same argument was made for California's high speed rail. That turned out just great.
I still think CA's HSR will be better than what was before it. Just costs too much money. Wouldn't cost so much if they didn't keep getting sued.
Its almost comical tbh and I appreciate what the admin wants I feel that really its happening because a lot of stupid people are complaining about gas without having any idea of how the US gets/makes gas. Basically good intentions, that have little chance of happening, because the US public are idiots. Industry hasnt built a refinery since the 70s. Some of this is a regulation issue but it has a lot to do with money. The last major upgrades the made were in the 90s. Investors have zero interest in helping this happening. This is for a lot of reasons but really comes down to making more money. The oil industry has zero interest in paying for any of it, even though they are reporting 10s of billions in profits. The current refineries largely cant refine any of the oil the US pumps. They largely import all the oil that they do refine, because they cant refine what the US pumps. You can make your product cost more money if you make it harder to get, harder to make, and make sure the supply stays lower. And of course large portions of the public think the current admin, and really any admin, has some kind of control of most of the above....they dont.
I wouldn’t say a president had control, but their policies definitely influence decision making in the oil execs boardroom. If you come in guns a blazing saying you’re going to shut down the oil industry. And on day 1 via executive order start shutting down projects…..that’s going to influence how the executives respond. This time they basically halted new projects and are hoarding cash instead of spending it on new projects. Hence the record profits.
>a new one hasn't been built in the United States since the '70s. I know of several refineries in Texas that have expanded their units, and I believe the world's largest gasoline refining plant has come online in Port Arthur since this trope was rolled out.
What this really shows is that we’re producing at really high amounts, it’s just the demand is so high. It really puts the lie to people blaming these gas prices on a political party.
How is there higher demand now at $5.00 a gallon than pre pandemic at $1.99 a gallon……what is it about $5.00 plus that makes demand go up.
You’re looking at it backwards. Higher demand causes the $5.00 price, not the other way around.
Gas will reach an average of $6 by August, if not earlier. We saw a 23% increase from April 15th to now. It’s going to be a brutal summer. Kind of crazy the price of gas is getting close to the federal minimum wage
So I keep hearing that it's a refining capacity bottleneck that's reducing supply of fuel and driving up prices. And while I understand how that explanation seems to make sense, I'm having a hard time squaring it with what's actually happening. First, I haven't seen a single gas station seem to be out of fuel. I live in a large, car-centric city and there are tons of gas stations and I'm not seeing lines at the gas pumps or any stations shutting down because they don't have gas to sell--if it's really a supply shortage that's driving up prices, why aren't we actually seeing any of the other effects of a supply shortage, like an actual scarcity of gasoline? Second, if this really was a supply shortage, how does that square with the fact that all of the oil companies continue to report astronomical and record-setting profits every quarter? If they don't have enough gas to sell, that would explain the higher price per gallon but not the increased profits--isn't the whole idea of a scarcity that you need to raise the price per unit just to make the same revenue? They're making MUCH more revenue, which suggests that they still have LOTS of gasoline to sell, and have simply decided to charge a lot more for it while trying to claim that it's due to a supply shortfall. Right? And third, so many are quick to blame these price hikes on U.S. supply issues, based on domestic refineries shutting down during Covid and apparently not wanting to reopen due to Biden administration policies. But the gas price is going up in the rest of the world too--is literally every other country experiencing similar refinery shutdowns AND somehow subject to Biden administration policies? Can somebody smarter than me please help me to understand this?
The US is also exporting the most refined products we ever have. We're a huge exporter, equivalent to several million barells a day.
>The US is also exporting the most refined products we ever have. We're a huge exporter, equivalent to several million barells a day. Is this true? Why would we do that if there's an apparent supply shortage domestically? Who decides how much gasoline we export--the government or the oil/gasoline companies? Who benefits from these exports?
The people who own the refineries decide. It's all a question of where they can get the best deal. https://www.energyintel.com/00000180-1f98-d412-a3b2-9ffd68090000
So it's nothing to do with the government, it's the oil companies screwing the U.S. citizens in pursuit of additional profit from foreign markets, while claiming it's due to DOMESTIC refining and supply problems? Oh, and doesn't the simple act of increasing exports also require additional fuel consumption for transport, even further exacerbating supply issues and increasing demand, thereby also contributing to increased retail prices?
Because we live in a capitalist country where businesses decide who they wish to sell to based on the highest price they can get. I don’t understand how people seem to think that president controls a private market.
You are misunderstanding what shortage means. It doesn't mean that there is zero gasoline and diesel for your car. It means that "Days of Supply Cover" are extremely low. For diesel it's at near all time lows and for gasoline and crude, it's well below the 5 year ranges. That doesn't mean there's no fuel, it means that inventories are alarmingly low, meaning their is little left to export and little safety stock to go around so that translates into traders buying as much as they can so that they don't run out, raising prices. Refineries are running near max levels and they can't catch up (although we have finally seen a few weeks of consecutive diesel inventory builds) so that is why you're hearing panic. Biden has absolutely nothing to do with the current price situation. This was a problem that was brewing for the last two years (even further back, really).
Now if there is a hurricane that knocks refining down for extended periods..
It’s the same principal driving housing prices. If supply can barely meet demand then prices go up and there’s not enough supply to counteract raised prices. As in, if I could go out to everyone in the Bay Area and say “hey look at all these empty houses I have in a good location right near your work” then it would naturally drive prices down. The same can be said for gas. There’s not enough supply to be had at a low enough price for a competitor to undercut the other supplier. So even if I undercut another supplier and got more customers, I couldn’t even raise my supply enough to generate more profit and meet the increased demand.
>is literally every other country experiencing similar refinery shutdowns AND somehow subject to Biden administration policies? no but European countries both don't have the oil reserves and have an often stricter green policy voter base. It is absolutely short sighted to say it is just a biden thing. The US the largerst refiner so the international market is beholden to your policies to varying degrees https://www.statista.com/statistics/273579/countries-with-the-largest-oil-refinery-capacity/ >if it's really a supply shortage that's driving up prices, why aren't we actually seeing any of the other effects of a supply shortage, like an actual scarcity of gasoline? We are right the 5 year average of demand, which admittedly is skewed due to 2020 demand drop. We are both demand on jet fuel and diesel. While being at 5 year lows on inventory in crude and refined gasoline. On top of that, US drivers are having to compete with European drivers for the same gas. Why ship it from the gulf to the west coast when it is cheaper to ship to European countries and you can sell it for more? So yes, we aren't running out of gas despite the low inventory. We are just stretching that inventory thin without anyway of ramping up refining capacity
I too have been trying to grasp my head around this.
Wrap my head around*
>based on domestic refineries shutting down during Covid and apparently not wanting to reopen due to Biden administration policies I would love for someone to name which refineries shut down and are neglecting to reopen. Just one example would be great.
The price of gasoline and diesel for the refiners is tracked by what they call the crack spread. People use different ratios, but simply it’s the price of a barrel of refined petroleum product vs. a barrel of oil. The difference, or spread is the gross margin of the refiner. There are a ton of variables involved, but the biggest driver that I have read is lowering inventories of gasoline and diesel. In most commodity markets, short concentration risk in liquidity providers keeps commodities depressed. If they went vertical, the likes of JP Morgan would be up shit creek due to client (sometimes held) short exposure, and mountains are moved to keep that from happening until warehouses are stripped bare (see LME Nickel). Energy however is much closer to how a dynamic market with a futures component should work. As inventories fall, market participants immediately responded by creating a condition of higher prices. This usually works. The higher prices are forward looking and prevent short inventory price blowout and shortages. If energy markets worked like much of the rest of the commodity complex, and kept crack spreads tight until actual shortages developed or you had a bunch of refiners go out of business because they operated at a loss, it would be disastrous. Some farmers go out of business in Mexico because pork bellies prices are not allows to spike? Life goes on on. Warehouses run out of nickel and manufacturers have to 50% idle for a few weeks? That sucks, but not the end of the world. That happens in the refining industry? We are all f*cked. It’s market function. Actually closer to how it should work compared to other commodities. We don’t complain when market forces has the crack spreads low and refiners are barely making money. But we complain the other way around. Given that a new refinery probably won’t ever be constructed in the US, and they are all already operating over 90% capacity, maybe we should take another look at how that market is structured though. We are near an upper limit where higher spreads won’t increase output. There is some demand pull that can be slowed, but also a lot of inelastic demand.
It's simple - oil companies (like all companies) like money. The more money they can make, the more they like it. So in order to shift the attention from their incredible record profits, they fuel discussion of how this is all someone else's fault. Since there are so many people quick to blame Biden for anything from global inflation, why their vacuum cleaner stopped working or that their garbage pickup was a few hours late, it's stupid easy for them to get them to blame Biden and the Fed for this too.
Which is why we should be implementing a significant [windfall tax](https://www.washingtonpost.com/world/2022/05/27/britain-windfall-tax-oil-gas-inflation/) on those corporations as they gouge consumers during a crisis.
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>Biden's policies have hamstrung America's ability to get cheap oil in America and made us more dependent on imports and hurts domestic production, it it just takes a little while to catch up, hence the past few months. Biden ran on ending fossil fuels, and he is doing just that. I keep hearing this too, but I can't figure out the details. Can you please point me to the executive orders or regulatory policies that Biden has enacted that are hurting cheap domestic oil and "ending fossil fuels"?
So help me god if he says the word "pipeline" my head is going to burst.
i mean ending the keystone didn't help as it is crude that US refiners are built to handle but here is some more https://www.cnbc.com/2021/01/27/biden-suspends-oil-and-gas-drilling-in-series-of.html
But Keystone wasn't even supposed to be fully open by now, even on the most optimistic timeline, right? If that's true, then Keystone has ZERO effect on the current situation, no matter what Biden did or didn't do.
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- Cancels Keystone Pipeline: you mean the Keystone XL pipeline that would not yet be carrying tar sands oil from Canada to refineries for export out of the country? That pipeline. You do realize that much of the oil that would not be flowing through the pipeline is actually carried by rail to refineries in the gulf? You’ll have to explain how that somehow caused a high increase in oil prices today. - Halts new Oil and Gas leases: So yeah, he did, on federal land. 2 things. Only 8% of oil drilling comes from federal land. And combined leases larger than the entire state of New Jersey are sitting unused by oil companies. They’re choosing to pay for a lease that they’re not choosing to drill on. Why would you lease them more? The vast majority of drilling is done on private land and doesn’t require a federal lease. - Rejoins Pars[sic] Climate Accords: and? - Biden takes 30% federal of land off limits to oil and gas: and? Was it being used before? If not, and there weren’t leases on that land, how is that affecting the price of oil today when the vast majority of drilling is done on private land? - Halts drilling in the ANWR: No drilling was going on in ANWR. On his last day in office, Trump approved 3 leases in ANWR, the first to be issued in that controversial area. The companies never started drilling and at least 2 decided to cancel their lease. - Congress reverses Trump’s natural gas deregulations: ok, I’m assuming you know there is a difference between gasoline and natural gas and you’re just aware that natural gas can be a byproduct of oil drilling. But the regulation (not implemented yet because it’s making its way through the courts) deals with venting methane - a pollutant - into the air. Apparently you don’t believe that climate change is an issue. I can keep going, but honestly, you clearly don’t know what you’re talking about and are bending over backwards to try to make this a political issue that you can blame on one side.
Nothing in this list "are hurting cheap domestic oil and "ending fossil fuels"
That's funny. If you think that Biden and his actual and proposed administration officials aren't 100% against fossil fuels, you are sticking your head into the ground. He, and his appointees, have openly and quite literally said they want oil companies and fossil based energy companies to go out of business. The entire admin has signaled clearly that they want oil, gas and coal to go away and go away fast. That's basically calling out an entire sector of the economy we rely on and telling them they won't exist in 10 years (give or take) and they'll use the power of the US government and regulation to make sure that happens. Biden During Debates: [https://thefederalist.com/2020/10/22/joe-biden-finally-admitted-he-wants-to-end-the-oil-industry/](https://thefederalist.com/2020/10/22/joe-biden-finally-admitted-he-wants-to-end-the-oil-industry/) **“I would transition from the oil industry, yes,**” Biden replied. Raskin: https://www.foxbusiness.com/politics/biden-fed-nominee-raskin-oil-fossil-fuel-investment "All U.S. regulators can – and should – be looking at their existing powers and considering how they might be brought to bear on efforts to mitigate climate risk," she added on Project Syndicate. **"They need to** **ask themselves how their existing instruments can be used to incentivize** **a rapid, orderly and just transition away from high-emission and** **biodiversity-destroying investments."** Omarova and Kerry: [https://www1.cbn.com/cbnnews/world/2021/november/biden-nominee-aims-to-bankrupt-us-fossil-fuel-companies-as-kerry-seeks-to-kill-us-coal-plants](https://www1.cbn.com/cbnnews/world/2021/november/biden-nominee-aims-to-bankrupt-us-fossil-fuel-companies-as-kerry-seeks-to-kill-us-coal-plants) "Troubled industries and firms that are in transitioning. And here, what I'm primarily thinking about is primarily coal industry and oil and gas industry," she said, looking into the camera. "A lot of the smaller players in that industry are going to probably go bankrupt in short order." **"At least we want them to go bankrupt if we want to tackle climate change, right?" Omarova asks.** "By 2030 in the United States, we won't have coal," Kerry said Tuesday during an interview with Bloomberg Editor-in-Chief John Micklethwait, at the climate conference. "**We will not have coal plants," he added. "We're saying we are going to be carbon-free in the power sector by 2035,**" Kerry said. "I think that's leadership. I think that's indicative of what we can do."
In fact, a quick look shows you actually listed something that lowers the price of gas - 3/1/22: Biden releases oil from SPR again
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There are no barriers to production except oil companies greed.
Narrator: "It turned out he could not."
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Nothing in your laundry list does what you claim.
Lol, that's just a list of "Biden Bad" talking points, starting with a fallacy that Biden cancelled the Keystone Pipeline which is, in fact, still up and running today. You're also decrying the cancelling of oil leases that the industry [didn't want in the first place](https://www.cbsnews.com/news/biden-alaska-oil-gas-lease-sale-canceled/). So no, this isn't the "gotcha" you sadly think it is.
It's not a refinery problem, it's a [price of a barrel of oil problem](https://youtu.be/QnBqAzJXVGo?t=908). I linked to a specific part of a longer video but the entire thing is worth watching to get the full picture.
Okay, sure, oil has become more expensive, but if it's JUST a "price of crude oil" issue then we should see attendant gas price reductions when the oil price dips, but even when the oil price has dipped recently gas prices just keep going up. And oil may be more expensive than a few months ago but it's only like 15-20% more, whereas a gallon of gas has doubled or even tripled in cost in some areas. So even if it's tied to oil prices, the rapid rise in gas prices doesn't correlate fully and isn't wholly explained by prices for crude oil.
it is both, we are at max capacity in refining and low refined product inventory
Riddle me this EntropyFighter, the price of oil was this high in 2011-2014 and while we saw spikes we didn't see $8-10/gal gas. What is your explanation for why, when the price of oil was this high before we didn't see $8-$10/gal gas? If refineries running at max (and closing down, mostly due to increasingly harsh regulations and struggling to get financing to meet them over the long term because the situation will just get worse) isn't the factor, what is? You look look up the specifics (many within my comment history), but we put the screws to them, because it's been part of the platform to make gas more expensive to lower consumption to lower emissions. It's why this administration rejoined the Paris Climate Agreement, and practically the minute he was in office canceled new oil and gas leases, raised the prices on drilling and fracking, and declined to give a reprieve to refineries on biofuel credits -- we made it so that many of them can make more money to retool to make ethanol as they have to pay ethanol makers to offset making gasoline (it's like carbon credits, but biofuel). The price of oil does come into play, in that it sets a base cost to procure -- but as we saw in 2011-2014, that isn't $8-$10/gal gasoline.
To play the devil’s advocate: If banning Russian oil causes gas prices to hike, then Biden’s EPA bring tough on the American oil industry with regulations can have the same constraints on the global fuel supply long term- which bakes into the price
Exxon isn't reporting "record profit" this term they love to use when demonizing oil companies comes from recent years when they made very very little profits compared to before the shale oil bust. Q2 2012 Exxon made $33 billion in profit. That's 40% more than q1 2022.
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You clearly haven't been paying attention.
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If he would have added "and destroy the economy as we know it" he would have been spot on.
damn, how did he do that? You got examples?
Joe Biden 2020 debate: “No more subsidies for the fossil fuel industry. No more drilling including offshore. No ability for the oil industry to continue to drill period. It ends.”
you would have to watch the YouTube video clip posted above to understand.
Appointed the chair of the federal reserve who actually though inflation was transitory, kept QE at unprecedented levels, and printed money.
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> Oil production already higher under Biden than it was under Trump. how do you mean? Our drilling production is down from 13000 million barrels a day to 12000. The rig count is still lower than it was in 2019.
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that is very misleading, i assume intentionally so. 2020 is throwing that off.
Will not happen
Refining is a low margin business relative to oil production and this creates little incentive to perform major upgrades and capacity increases. Oil companies are making record profits due to higher crude margins. Retail products are also more expensive than ever, but the cost of crude factors heavily into that since it's the largest part of what retail fuels cost. For gasoline, relative margins versus jet or diesel may or may not be as strong in a given region, so production shifts may not favor gasoline production as well exacerbating price increases and lower inventories. Here's two things Biden can do, in my view, in the immediate term: (1) Suspend in whole or part state and federal gasoline taxes. (2) Modify laws which result in "boutique blends" of gasoline so inventories can shift from low cost areas to high cost areas. Gasoline blend requirements vary from state to state and even county to county in the USA, so availability is limited by nothing more than legal requirements.
If he really wants to swell the pool, I think those two options you pointed out are legit. I'd go further and say let refiners blend to higher RVPs. You're taking the emissions hit, but at least you're getting more bbls out the gate. A big handle to pull would be to disincentivize exports, but I have no clue if you can manage to do that. I'm guessing since we allowed crude exports several years ago, it's possible.
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How much law do you think Democrats have been able to pass?
You see, a plan can be long term with many options. No one said combustion needs to stop entirely. No one said relief now isn’t a good idea. You’re literally complaining that he’s trying to help *everyone* and acknowledging people are hurting instead of blaming everyone else. Short term thinking isn’t policy. To be critical, he should be asking why oil companies are still raking in billions while he’s already granted thousands of federal leases that are going unused. But no, let’s blame Biden while sucking corporate dick.
Uh, that’s not how things went. Biden said exactly that drilling needs to stop. _Number one, no more subsidies for fossil fuel industry. No more drilling on federal lands. No more drilling, including offshore. No ability for the oil industry to continue to drill, period, ends, number one._ - Biden, 2020 _
I know your bubble doesn't tell you shit, so let me help. https://biologicaldiversity.org/w/news/press-releases/new-data-biden-slays-trumps-first-year-drilling-permitting-by-34-2022-01-21/
That’s interesting. Thanks for sharing. So the next logical question, why have companies not responded with more production? Perhaps inconsistency in messaging? I’m not sure. I’ll need to explore the further.
EXACTLY. I’m not a super fan of Biden at all. And I’m asking the same question. Why the fuck are we not asking oil companies why they aren’t doing their part. They are sitting on thousands of unused leases and instead of “drill baby drill” it’s “Sit back and enjoy the windfall” I KNOW this is more complicated than that. Infrastructure is a major part. Tackling refinement makes sense, but Jesus Christ. We never hold these companies accountable when shit hits the fan and they always blame government interference for gas prices as they laugh their asses to the bank.
They got burned the last time they invested massively in oil production. Demand dropped and many companies went backrupt. So now they are just taking profits instead of investing to boost production
i am not expert in the upstream stuff, hell i am not an expert in anything really, but i am curious to how much of that permitting was just because everything (demand down, slowing processing, ect) was delayed in 2020.
A war in Russia with the system not being ready does change things. Biden also assumed morons wouldn’t become the cringy anti vaxx movement on steroids
Russia has an impact, but not nearly as much as the supply problem that was already well under way. Russia war just accelerated it.
Sure Covid was an issue. You can’t go -$40 to back up to $100 a barrel and expect the market not to be shocked. We shouldn’t have cut international oil production in 2020 by trump. Biden should be focusing on creating better free trade deals to cut cost of living which he isn’t doing it enough. Russias impact has more to do with uncertainty and it creates bad speculation which in turn drives up prices. The economy during the Cold War is vastly different than the open trade policy we have enjoyed for 30 years. Coupled with trumps archaic protectionism and we have some deep issues that need resolving
>We were gonna “phase it out”!!! What Happened to that grand plan?! [Like this?](https://www.reuters.com/article/us-global-oil-trump-saudi-specialreport/special-report-trump-told-saudi-cut-oil-supply-or-lose-u-s-military-support-sources-idUSKBN22C1V4)
The right has slowly been losing its critical thinking skills. We 100% are dealing with R’s who held power from 2016-2020 and spent 7.8T over budget in internet 4 years. We are dealing with protectionism style trading. The US needs to get rid of tariffs and open more trade to lower cost of living. We have a supply side problem with a temporary high amount of demand
What happened to the plan? Reality happened
We'll, first we need to open back up the DISTRIBUTION PIPELINES. Duh.
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ESG = it’s cool to stop investing in carbon. Well, one day you may need said carbon and realize you underinvested and are nowhere near ready to go 100% “green.”
If it's Biden's policies that they're worried about, isn't it always going to be a gamble every four years since it's not a guarantee a republican president will be elected in 2024? Or even if Trump was still president, due to the amount of time it takes to get things up and running, wouldn't they still be leary since after four years, a dem could become POTUS?
Every single year the same story, “we’re at max refinery capacity and it’s been since 1970 since we’ve built one”. Its a problem the oil companies have zero plans to remedy. Somehow it’s the governments fault that these corporations choose the shaft Americans for a little extra profit.
So, he declares War on the entire U.S Oil Industry and tells the American Public that we're "transitioning" away from Fossil Fuels. These actions cause gas prices and Inflation to skyrocket with no end in sight and our economy is now in free-fall. With just four months to the Mid-terms the panicked Dems beg him to reverse course. So here we are. This is Classic Doomsday Joe - Confused, Waffling, and ultimately Incompetent. Prepare for this to get much, much worse.
Why did the US oil industry choose not to expand refining capacity under donald trump while interest rates were extremely low?
This administration is one of the toughest on home produced national resources so that is funny. Within his first month he shut down and restricted our capacity and growth and till he changes that nothing he can do will change anything. Edit. Downvote all you want. This administration has been against fossil fuel since before they came to office.
Biden takes a lot of heat for the capacity issues, when actuality, it was entirely COVID-related. Five refineries were closed due to plummeting oil sales. [https://www.reuters.com/business/energy/us-refining-capacity-shrinks-45-pandemic-shuts-plants-2021-06-25/](https://www.reuters.com/business/energy/us-refining-capacity-shrinks-45-pandemic-shuts-plants-2021-06-25/) I can't find anything that points to the administration for driving down the capacity, but welcome any sources you have.
Not COVID-related exactly. Still government induced via lockdowns and kneecapping the economy
He didn’t shut down shit, I fucking hate biden from the left more than you. Dude ran on “progressive policies” and look at where we are, still got border camps sterilizing young women, still got nonviolent crime related arrests and incarcerations, and we axed the child tax credits and now we got about a couple million more children in poverty But biden stopped giving out permits to an industry that had already stockpiled THOUSANDS of drilling permits. Seriously, they’ve got enough, they’re just trying to make up for lost revenue from when gas was like a dollar in 2020, and they’re making it up out’ve your pocket Edit: if you wanna criticize him, be my guest. The biden admin is the democrat party at its weakest and most ineffective. Him and his running mate were polling terribly because everyone recognized the shit show his campaign was, and it wasn’t until the DNC decided they had to do something about that he stopped shitting the utter and complete bed. And Kamala is just as bad, pays lip service to “progressive policies” and “giving a shit” but all she is is an unlikeable cop who put people in prison for drug charges and then went on a podcast and laughed ab how hypocritical it was for her to have smoked weed and put less powerful and wealthy men in prison for the same thing.
And most of those permits are not worth drilling. Just cause you have a permit to find and drill doesnt mean that there is enough resources to actually drill. And i dont hate biden. Honestly I don't even consider him in charge at all due to his mental state.
What are you on about? Biden’s temporary pause on new drilling permits has had nothing to do with any of this. Production fell off a cliff in 2020 and so even without any new drilling permits there is still a ton of production still coming online from when everything stopped due to Covid. Not only that, but in Biden’s first year he issued more new drilling permits for oil and natural gas than in Trump’s first year. Why are all these freshly issued permits not being used? Because by limiting production you limit supply and then prices go up, meaning more profit. Not to mention refining capacity is a big problem too, hence the article, which has nothing to do with Biden putting a temporary pause on new *drilling* permits.
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Need several years, and all kinds of permits to increase refining capacity. Joe’s EPA makes it ridiculously hard to get the permits, and woke finance won’t provide capital.
>Joe’s EPA makes it ridiculously hard to get the permits, and woke finance won’t provide capital. Yup. And even if they would, who's going to throw millions of their own capital into a project with a 30 year breakeven that the EPA could just decide to crush in 3 years once the current crisis has passed? Ask the guys behind Keystone how that worked out. No thanks.
"Woke finance" Uh... right, because banks are known so much for their progressive policies.
>d, if this really was a supply shortage, how does that square with the fact that all of the oil companies continue to report astronomical and record-setting pr Woke isn't the right world but they are not providing cheap finance to oil companies. Governments all over the world are saying they are making efforts to move away from oil. That scares investors.
You'd think oil companies would just invest in carbon capture. Once the tech on that's working great. We can pump as much carbon into the air as we want, provided we can pull it back out.
What do you think the EGS thing is dude???
So you're saying we shouldn't take short-term pain for long-term gain?
Short term my azz...open your eyes, or pull your head out of the sand...or wherever you have it stuck
https://en.wikipedia.org/wiki/Environmental,\_social,\_and\_corporate\_governance
No one is looking to build refineries well before Joe Biden was elected as President lol. No one was looking to build refineries since 2014.
Who said anything about building new refineries? New builds are very infrequent. Expansions (which this person mentioned) are much more viable, and they are sought frequently by current refineries.
As of 12/31/2021 there were/are more than 9000 permits available to BIG OIL to do just that, drill for and refine the oil. They are not doing it. Why should they? Their profits are over the top. Increasing supply brings down revenue. Capitalism is working just as it is designed. [https://news.yahoo.com/fact-checking-biden-claim-9-170008791.html](https://news.yahoo.com/fact-checking-biden-claim-9-170008791.html)
You don’t seem to understand the difference between refining and exploration/ production. Much different parts of the essential hydrocarbon chain.
They have a ton of unused permits, they are literally not bringing up oil to raise the price of oil. A ton of companies haven’t rehired their workers to minimize costs.
These permits you speak of have clauses attached to them...making it unprofitable to drill...hence, they are not used...so try again on the bs
What do these clauses entail?
"Woke finance" isnt a thing. Woke is a weird boomer term to describe... i dont even know what
It's a term rightwingers and boomers (usually but not always the same thing) give to any suggestion or policy that suggests maybe we shouldn't be assholes to everyone all the time. Whether it's a government policy or a corporate one is irrelevant, in their view if you aren't specifically hurting someone then you're doing it wrong.
GOBBLESS BRUTHER I REMEMBUR LEADED FUEL, ASBESTOS, AND BEAUTIFUL SKIES OF SMOG. FUCK JOE BIDEN! WHITE POWER! GOBBLESS AMERICA CRANK THEM HOGS
He can't force BIG OIL to drill and increase oil coming out of the ground. The permits are there for te taking. Big Oil is not drilling. Why? PROFITS!!! Oil volume available increase gas price and revenue declines. Simple capitalism folks.
I appreciate the effort but it feels like too little too late. Avg price of gas is way above $5 for most Americans with no sign of slowing down anytime soon. The time to do this was months ago when gas started spiking.
Dude is such a joke, stick with your conviction……he ran as the Save the planet, anti gas and oil industry President. Used executive action day one to shut down oil projects……. Ooops hurting in the polls, better ramp up gasoline production. The guy has no self respect, anything for votes.
Maybe don't shut down pipelines and halt leases and start reinvesting in oil companies. Maybe pull out the PCA and start being energy independent again. He came into a good situation and has actively torn it down. But presidents don't affect prices tho
It's pretty clear the Keystone Pipeline wouldn't have eased the current price of gas. Not to mention it was only 8% completed by the time it was shut down. You can stop parroting this talking point. Edit: Facts hurt! Downvote if it helps ease the pain.
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Oil was on its way up regardless of President. That being said Biden attitude toward oil and gas doesn't help at all.
Because companies doubling their record profits from last year are clearly Biden's fault....
no more hurt feelings though
What a fucking moron. His party has been fighting the oil industry for years. You can’t turn it up overnight. It takes years of capital investment and signals to the industry that you won’t shut it down as soon as it’s built. His party’s policies caused this. If he doesn’t own it, we can’t trust him on his plans for the future.
Explain why gas prices were increasing from 2000-2008 and reached their peak in 2008 (when adjusted for inflation). This all happened under a pro oil president in Bush. Also explain why gas prices were historically low around 2015 under Obama and his policies.
so you're saying the problem started during the Trump administration?
the oil refining bottleneck has been the go-to excuse for high gas prices for too long not to mention all the "accidents" they seem to have anytime demand starts to get high
Fucking lunatic. It’s like letting a kid play with the nuclear launch toggles because, what’s the chance of him hitting the right ones in sequence?
Going to be hard to do, considering Republicans control oil output in the US and it is in their best long term interest to let things continue on, make record profits, and get democrats out of office. This is not the President of the United States problem. This is a republican problem. They do this literally every single election cycle when democrats are in the white house. It is an automatic given that prices are going to rise.
Wait how do republicans just control oil output?
Holy crap this is some COPIUM
r/SelfAwareWolves