On Refineries -- From A Reader -- May 27, 2022

A reader writes: 

Refinery capacity has been reduced by design. 

The major oil companies are now being sued by the individual states because they deal in ‘carbon.’ 

They are accused of not informing their customers in their quarterly statements that the business will negatively affect the climate, which will change their profit margins that will / might negatively affect their shareholder’s wallet. Closing a refinery in a contested area such as the east coast helps the new regime feel better about them and raises their ESG level and their profit margins. Scarcity by design is hard to do if you want to obscure the facts. This scarcity of refinery capacity was started years ago. 

I was shocked that permits were given in North Dakota for the 2 refineries built there. Both are now going to convert to renewable diesel fuel when the crude oil to be refined is actually next door [literally under their feet]. 

Small, 20- to 40K-teapot refineries are all we will see as stand alone refineries. Almost all the large ones can add another unit (50kbpd). When they do they will be admonished for destroying our atmosphere and will be sued for misrepresenting their business to the shareholders who will earn higher dividends and see their share value increase. 

It is an investor’s dream right now 

My not-ready-for prime-time reply:

This is the under-reported story of the decade. Biden et al keep talking about "oil production" as the long pole in the tent. One wonders if they understood the refining issue a year ago. I can't believe that someone like me started talking about his maybe six months ago and I'm not exactly known for spotting things like this. Certainly, the folks in the White House knew exactly what was going on but had no way of addressing it, so they continued to talk about oil production (supply/demand) which is not the current issue. Oil supply / demand will be the issue in three to six years.

On another note: you hit the nail on the head. This was not the doing of the federal government per se. This was "keystoning" individual refineries by faux environmentalists, with a strategy of conquering by dividing. Kill individual refineries state-by-state. Start with the "soft" states first, like California.

That huge refinery in California (Marathon?) that announced they will be converting from a crude oil refinery to a sustainable reneewable refinery is a great example.

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