Posted on 03/08/2022 9:20:35 AM PST by SeekAndFind
As of April, 2021, the United States had 18.1 million barrels per day of petroleum refining capacity (i.e., operable atmospheric crude oil distillation capacity). U.S. refining capacity had reached a record high of nearly 19.0 million barrels per day as of January 1, 2020, but several refineries have closed since then, resulting in a capacity decline of 4.5 percent. While the United States has been shuttering refineries, China has invested in them. In fact, for most of 2020, China’s refineries processed more crude than U.S. refineries. In April 2020, more crude oil was being refined in China’s refineries than in U.S. refineries for the first time on record, and the trend continued for all remaining months in 2020 except for July and August.
According to the International Energy Agency, China is expected to dethrone the United States as the number one petroleum product producer in 2021, a historical first. About 50 years ago, the United States had 35 times the refining capacity of China. But today, oil exporters are selling more crude to Asia and less to customers in North America and Europe. According to Wood Mackenzie, about 1.4 million barrels per day (about 9 percent) of refining capacity in Europe may shut-down by 2022 to 2023, with plants in the Netherlands, France, and Scotland on a list of potential closures.
China’s refiners are becoming a growing force in international markets for gasoline, diesel, and other fuels, putting other refiners out of business. Chinese refining capacity has nearly tripled since 2000 as it worked to keep pace with the rapid growth of diesel and gasoline consumption. The country’s crude processing capacity is expected to climb to 20 million barrels per day by 2025 from 17.5 million barrels per day at the end of 2020.
Source: EIA
China vs. U.S. Refinery Output 2020/2021
April 2020 was the first full month for the United States in which responses to the COVID-19 pandemic reduced demand for petroleum products. While U.S. refiners had seen record declines in April, China’s refinery oil processing began increasing their levels due to a demand increase following a decline in China’s COVID-19 cases. China’s refinery runs also started to increase in April 2020 because China implemented a policy in 2016 that encourages refiners to refine more petroleum products by fixing product prices at $40 when the Brent crude oil price falls to less than $40 per barrel. The Brent crude oil price fell and remained less than $40 per barrel between March and May 2020. U.S. oil was even negatively priced at one point in April, 2020, meaning companies were paying for others to take their oil.
While China processed a record 14.1 million barrels per day of oil in June 2020, which increased further in November to 14.5 million barrels per day, U.S. refinery runs did not return to their March 2020 levels in 2020 because of a combination of demand reductions and hurricanes that disrupted refinery processes. Hurricanes Laura and Sally in late August and September and Hurricanes Delta and Zeta in October resulted in refinery shut-ins on the Gulf Coast, where more than half of U.S. refining capacity is located. Although some refineries came back online in late 2020, U.S. refinery runs remained lower than historical averages in 2020. In April 2021, U.S. refinery runs had increased to 15,160 barrels per day—close to the March 2020 figure of 15,266 barrels per day.
Also affecting the weak refinery margins in the United States is the price of renewable credits (RINs) that refiners need to buy to meet their renewable volume obligation for blending ethanol and biodiesel into their gasoline and diesel under the Environmental Protection Agency’s refinery fuel standard. In May and June, 2021, the price of RINs was a record high of just under $2. EPA is supposed to reevaluate factors that raised the price of RINs, which should lower them and help refinery margins.
U.S. Refinery Closures
Operable refinery capacity is the amount of capacity that is in operation or could be brought into production within 90 days. Operable refinery capacity declined by 335,000 barrels per day after the Philadelphia Energy Solutions refinery in Pennsylvania closed in May. Operable capacity fell another 19,000 barrels per day in June when Marathon’s refinery in Dickinson, North Dakota, closed to be converted to a renewable diesel plant. Other closures:
Conclusion
U.S. refineries are shuttering or being converted to biofuels facilities, while China is building more refineries and is expected to overtake the United States in refinery runs this year. Soon China will have more operable refining capacity than the United States. The closure of U.S. refineries is along the path that President Biden wants as he seeks a zero carbon future by 2050 while China will continue to produce petroleum products, build coal mines and plants, and further fuel its growing economy.
It’s horrific watching our country commit slow suicide.
We have the cleanest refineries in the world.
Let’s close them to save Gaia?
I have heard a counter argument that says:
1) Opening up the Keystone Pipeline from Canada isn’t going to help now because even if we did, we do not have enough refining capacity for Canadian blend.
2) Therefore, we have no choice but to import from Russia and/or Venezuela because we DO have spare capacity for refining their type of blend.
In other words, importing from Russia and Venezuela gives us NO CHOICE because we don’t have spare refining capacity for Canadian or local blends.
I’d like to hear you or anyone else’s opinion on this
I have heard a counter argument that says:
1) Opening up the Keystone Pipeline from Canada isn’t going to help now because even if we did, we do not have enough refining capacity for Canadian blend.
2) Therefore, we have no choice but to import from Russia and/or Venezuela because we DO have spare capacity for refining their type of blend.
In other words, importing from Russia and Venezuela gives us NO CHOICE because we don’t have spare refining capacity for Canadian or local blends.
I’d like to hear you or anyone else’s opinion on this.
China will trade us our SUV’s, trucks and luxury vehicles for their rickshaws to use going forward.
lets go Brandon!!
As gas prices shoot up, these companies will see a money-making opportunity and reopen the plants.
> It’s horrific watching our country commit slow suicide. <tes is ts ething similarmohiwdtecefn iwon
After Pearl Harbor, the Japanese became infected with something they themselves later called “victory disease”. Their leadership became convinced that nothing could go wrong. It would just be victory after victory. So there was no need to be prudent.
We all know how that turned out.
The United States is now infected with something similar. We are infected by “prosperity disease”. There might be a few bumps along the way. But we expect nothing but good times ahead. So there is no need need to be prudent.
Grasshopper, please snatch the pebble from my hand
So, do our refineries have the ability to refine US petroleum? If so, (/s) maybe we could increase drilling and shale oil recovery?
If what you say is correct, then perhaps we need some sort of national effort to modify our refineries to accept Canadian oil. Because the crisis we’re currently in is bound to happen again.
Oops! What am I saying here? That effort would be an admission that we still need fossil fuels. Windmills. We need more windmills. Yeah, that’s the ticket.
“It’s horrific watching our country commit slow suicide.”
~
I’ve complained for years that it’s not just our domestic production that’s a problem but it appears or refining capacity is the biggest weakness or bottleneck, regardless of your sources. I know next to nothing about this industry, but I’ve seen replies from people who say it’s not just the government, but also the petroleum company who don’t want more refinement capacity, because they benefit from the controlled scarcity that it causes.
So yes, its a slow suicide. The corporations and the government profit together. Trump may have been a road bump, but what did he do about refining?
We are the only country that can refine Venezuela’s filthy oil. Our crude is easy to refine, if we would just produce it. We could also trade our product for foreign refining.
I’ll have to research our spare refining capacity to answer your other question, will try as it’s important, thanks.
BWA HA HA HA HA !!!!<
The EPA will either slow walk or outright deny any permits required to do so.
OUR GOVERNMENT IS AN ASSET OF THE CCP !
We have refineries in all 50 states and some territories. Don’t know their total refining capability but here’s a place to start;
https://www.eia.gov/petroleum/refinerycapacity/
Old refineries close on a regular basis when replaced by upgraded ones.
RE: So, do our refineries have the ability to refine US petroleum?
The answer is yes. We have been doing that for 4 years under Trump.
The question I have is CAPACITY. Oils have different blends. Do we have enough capacity for Canadian or American blends today? Or do we only have capacity for foreign ones ( like Russia )?
You ain’t kidding.
They will hold our EV cars hostage when they refuse to batteries, chips etc. US will come to a halt. Not to mention our trucks that will EV as well. Raw materials don’t last forever. China is #1 country for cobalt which is one of many raw materials needed to make EV batteries.
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