Energy Prospectus

US refining capacity falls to lowest mark in 8 years amid record prices
EIA: The nation's capacity to refine crude oil into fuel and other products fell below 18 million b/d at the beginning of 2022 and hit its lowest level since 2014, according to the federal government's annual refinery capacity report released June 21. The dip comes amid refinery closures in recent years and the recent surge in oil prices as retail gasoline and diesel costs hit record highs earlier this year. The new pricing records are coming from a combination of factors, including demand recovery from the pandemic and the ongoing war in Ukraine. Some refineries have closed in recent years -- or are slated for conversion -- due to hurricane damages, pandemic impacts, high operations costs, the inability to complete sales, weaker future demand forecasts, or from conversions to produce more renewable fuels.

We are at the beginning of Hurricane Season. If just one Gulf of Mexico hurricane (and several are forecast) shuts down a few refineries. The transportation fuel shortages will likely cause diesel rationing. Make sure you have extra food in the house.

Oil CEOs will visit White House for emergency meeting. E&E News.
Responding to President Joe Biden’s call for an explanation of soaring petroleum prices and surging industry profits, oil and gas executives will visit the White House tomorrow for an emergency meeting with Energy Secretary Jennifer Granholm. Granholm and White House officials will meet with executives from BP PLC, Chevron Corp. and Phillips 66 Co., the companies confirmed to E&E News. Other oil majors, including Shell PLC and Exxon Mobil Corp., didn’t confirm their attendance. “We look forward to engaging with the Administration,” a Phillips 66 spokesperson said in a statement yesterday. “We are a company of problem-solvers, and only good things can come from working collaboratively to address near- and long-term issues facing our country and energy consumers.”

US majors respond to Biden’s letter by calling out federal policies. Upstream Online.
US President Joe Biden has called upon several oil majors to use “historically high” refining margins to invest in expanding the country’s capacity to help ease pressures on gasoline prices rather than rake in the profits, but the majors are not taking accusations lying down. In a letter sent earlier this week to a list of companies including ExxonMobil, Chevron, Shell, Phillips 66, Marathon Petroleum and BP, Biden chastised the companies. “At a time of war – historically high refinery profit margins being passed directly onto American families are not acceptable,” the letter read. His missive was met with an indignant response, with Chevron, in particular, calling for policies that underpin continued investment in oil and gas rather than the "obstructive" approach that many US oil industry insiders accuse Biden of adopting toward their business.

Biden administration delays oil and gas lease sales again amid environmental protest. Fox Business.
The Biden administration delayed multiple oil and gas lease sales a second time late last week amid an ongoing protest from environmental groups opposing the sales. The Bureau of Land Management (BLM), the agency tasked with overseeing oil and gas development on public lands, announced Friday the dates for three lease sales slated for New Mexico, Colorado and Wyoming would take place at the end of the month. The three sales had already been rescheduled once before for the same reason. "The date for this sale has shifted slightly to complete the analyses required under the National Environmental Policy Act and allow time for protest resolution," the BLM said in its announcements Friday.