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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsOil refineries are making a windfall. Why do they keep closing?
Companies see only headaches on the horizon for refineries, undercutting the White House push to boost production
PHILADELPHIA As the energy crunch drives record profits at American oil refineries, the owners of what had been the largest such facility in the Northeast have no regrets about tearing the place down.
Hilco Redevelopment Partners has been hauling out 950 miles of pipe from the former Philadelphia Energy Solutions refinery, abandoning the propertys 150-year history of processing crude oil into fuel in this city. The firm is spending hundreds of millions of dollars to convert the 1,300-acre site along the Schuylkill River into a green, high-tech campus for e-commerce and life sciences companies.
I dont even know how to operate a refinery, said Roberto Perez, chief executive of Hilco, which bought the property in a bankruptcy auction in 2020, a year after a massive explosion at the refinery rattled the city. Its not what we do.
Oil refineries across the country are being retired and converted to other uses as owners balk at making costly upgrades and Americas pivot away from fossil fuels leaves their future uncertain. The downsizing comes despite painfully high gasoline prices and as demand globally ramps up amid sanctions on gasoline and diesel produced in Russia, the third-biggest petroleum refiner in the world, behind the United States and China.
Five refineries have shut down in the United States in just the past two years, reducing the nations refining capacity by about 5 percent and eliminating more than 1 million barrels of fuel per day from the market, leaving the remaining facilities straining to meet demand. Yet even at this lucrative moment for whats left of the refining industry, a White House desperate to bring down gas prices is having little success persuading owners to expand operations, and more closures are imminent.
So maybe drilling isn't the problem. GOP keeps saying Biden won't let them drill.
EYESORE 9001
(26,020 posts)why not reduce capacity and drive the price higher? Refineries are expensive and risk-prone. They want profit without effort. Fuckers.
Samrob
(4,298 posts)A better idea, to me, would be to impose a windfall profits tax on excess profits since the month before Putin invaded Ukraine. I say a month before because I believe the oil companies and others had a heads up on what Putin was doing. The windfall tax would remain in affect until oil producers were back up to pre-COVID production.
I know the oil companies are using the excuse that they lost money during the pandemic but their loss was mostly from more record profits. They never encountered a REAL loss like almost every other business. They were at record profits before, during and now after the pandemic.
Don't bail them out by robbing Federal coffers just so they can keep their obscene profit margins.
Walleye
(31,110 posts)Having covered a few stories at Delaware City for the paper, explosions, fires, illegal burning of flares, air pollution. And they are ugly. If we can transition out of oil refineries its a good thing. I think the oil companies know this thats why theyre not investing more. We need to get busy on other forms of energy. We should have decades ago
IronLionZion
(45,601 posts)They are costly to run, there's a labor shortage. it's dirty business.
Walleye
(31,110 posts)But Americans in their arrogance just went on manufacturing and buying these huge gas guzzlers
IronLionZion
(45,601 posts)American car companies have gone all in on SUVs, although some are hybrids or electric these days
JCMach1
(27,582 posts)Walleye
(31,110 posts)I havent kept track lately but when it was new I got 40 miles per gallon. It was built according to the CAFE standards, Before the Republicans tried to fuck that up
IronLionZion
(45,601 posts)it's a stick shift. Those last a long time and are harder to find these days.
zeusdogmom
(999 posts)Only I have 123,000 miles on it - a few road trips to visit kids. Great mileage on road trips. Wish in town was as good.
Love my little stick shift Mazda. Not looking to replace it anytime soon.
IronLionZion
(45,601 posts)It's fun to drive and comfy, easy to park, holds enough luggage for me.
And a dog mom who can drive stick. swoon
zeusdogmom
(999 posts)For me it is the perfect car. I can drive for 10 hours in it and not feel stiff and sore despite being a bit on the older side of life. Zeus Dog fits in the back seat - takes up all of the space but he doesn't have to share it with anyone so its OK.
Sometimes the trunk and other available space is a bit cramped - 20 bags of mulch is the absolute limit but I can live with that.
I agree with the reliability. Nary a problem. I do need new breaks sometime in the next 5000 miles or so. The paint job has held up, too so the car doesnt look old. Just kind of small tucked in between all of the much larger vehicles in a parking lot.
FWIW - my kids (both girls) learned to drive with a stick shift in a cranky tank of an old Volvo no less. Truly a dying skill.
Walleye
(31,110 posts)I love that six-speed stick shift. I think about when I was in high school and the Mustangs first came out. I wouldve loved a car like this back then
zeusdogmom
(999 posts)Almost bought one about 15 years ago - good thing I slept on that decision. Just not a practical car for me. But still one of the most iconic car around.
My car is mostly manual, too. The most basic model available at the time I bought it. Windows are automatic but every door has to be locked or unlocked individually. Radio and CD player (upgrade from the cassette tape player in my previous car 😄
I have driven several rental cars with a lot of bells and whistles - they are nice cars, but it always feels so good to get back to my basic Mazda.
JCMach1
(27,582 posts)Miguelito Loveless
(4,475 posts)Between it and a Nissan Leaf we cut our fuel usage from just under 800 gallons a year to less than 35.
Captain Zero
(6,845 posts)Once homes are near a refinery complaints come rolling in, even though the refinery was built far out of the city on a railroad line long ago. I've known of a couple that closed down due to that. Just my observation. Not sure what the action should be.
IronLionZion
(45,601 posts)but now cities have transformed quite a bit.
Initech
(100,118 posts)IronLionZion
(45,601 posts)knowing fully well idiots will blame not enough pipelines and drilling
Walleye
(31,110 posts)Blaming politicians really works for these companies. And the rubes go for it.Corporations dont have a heart or a conscience, they have a bottom line, we need to accept that and deal with it. Oh and no corporations are not people. Chrissakes
In It to Win It
(8,299 posts)to invest in more drilling if they wanted to. Nothing stopped them. Bidens policy decisions only affected non leased and non permitted federal land. Companies were free to expand exploration on private and state land.
Refineries closed around the world. I remember reading about it while the world was still in lockdown. I remember reading refineries across Europe were closing. Additionally, I had contacts that were looking to build new refineries in the Middle East and in Europe last year and this year. Even given the lost global refining capacity, the banks I talked to were not interesting in financing oil refineries. Banks across Europe, the Middle East and Asia didnt (and still dont) want to jump into oil refineries anymore.
modrepub
(3,504 posts)Would you expect a bank to grant a 30-year $500k mortgage to a retired senior citizen?!? Same concept, the ICE is going to be phased out in the next couple of decades (or less, no one really knows) replaced by electric vehicles for many folks. There's even a branch of folks who think personal car ownership will be phased out in the next decade. Replaced by self driving, vehicles that will be called on demand from third party companies. Think of all the money people could save on auto insurance and car storage if you can just hit an app and a vehicle shows up to take you wherever you want to go then viola it's gone after you use it.
We're in a major transition as far as how we drive is concerned. Some economists have likened it to Shumpeter's long wave theory, which predicts major shifts in economies due to technical changes (like the advent of computers negating the need for lots of data clerks to track business transactions).
Unfortunately, these types of changes (ICE to electric) are going to cause major economic reshuffling and most likely a lot of pain for folks entrenched in the old way of doing things. I think that's part of what your seeing in today's high gas/diesel prices.
Strelnikov_
(7,772 posts)Back in the 2000's the country had about 80 to 85% refinery utilization.
No profit in excess capacity, so new refineries were not built, some closed, and upgrades to ever larger refineries to take advantage of the economies of scale.
When Ike came within 30 miles of wiping out 15% or so of the nations refining capacity in 2008, we could have survived, between high prices and excess capacity.
Today, with no reserve capacity, and the mega-refineries all concentrated along the gulf, there will be shortages and have to be rationing in the event of what many of us have been worried about for years.
The Supply = Demand equilibrium will be broken, effectively.
Emile
(23,065 posts)ProfessorGAC
(65,319 posts)It's well established that the supply/demand relationship to price is broken right now.
There are no shortages, because the most recent refineries and retrofit catalysis systems far more efficient.
So, the problem with price isn't because of the shutdown of antiquated operating systems.
For the hundredth time, if we keep blaming the refiners for price hikes they don't control, we'll never figure out what's really gone wrong.
EmeraldCoaster
(131 posts)They close then, they sell for profit to their competitor, then employee's get rehired by the new company with no bennies less pay etc... Over and over and over. It's a grift .