California To Temporarily Set Aside Penalties For Excessive Refining Profits -- Released Well After News Cycle Ended Friday Night -- August 30, 2025

Locator: 48995CA. 

Behind a paywall, link here, and archived:

HOUSTON, Aug 29 (Reuters) - California's Energy Commission voted on Friday to temporarily set aside penalties for excessive refining profits that were adopted after gasoline pump prices climbed over $8 a gallon in 2022.

The five-year delay in implementing the penalties comes as Phillips 66's Los Angeles refinery is preparing to begin shutting production as early as next week ahead of a permanent closure.

The fact is, supply is declining faster than demand, and we need to bring them into alignment: that means slowing supply loss while aggressively pursuing the transition to zero emission vehicles," the Commission's staff said in an emailed statement. [So far, there is no Plan B to slow supply loss in California, according to ChatGPT.]

California's Democratic Governor Gavin Newsom had proposed the penalties, but has since switched direction amid worries of price spikes in 2026 after the closure of the Phillips 66 refinery and a San Francisco-area plant operated by Valero Energy Corp next year.

Coincidentally, this blog was posted about twelve hours earlier, link here.

California refiners: link here. 

Phillips 66 on track to shut down its California refinery as scheduled, or perhaps slightly ahead of schedule. No talk yet of who might buy it. ChatGPT says there are no reports of anyone looking to buy this refinery, and the state of California seems to be caught flat-footed on this development though it was announced years ago; California was very, very aware of this closure; but, failed to come up with a Plan B, except to import refined products.

Flashback to 2022: 

In 2022, California gasoline prices saw significant increases, driven by events like the Russia-Ukraine war.

Prices reached historic highs, averaging $5.89 a gallon in the summer of 2022, with some counties seeing prices over $6.

The surge in California prices occurred alongside record-breaking national averages, with the U.S. average reaching $4.25 per gallon in March 2022.

In Oregon, it was not much better.

In 2022, average gas prices in Oregon peaked around $5.55 per gallon in June and remained high, with an average of $5.14 in late September before dipping slightly by year-end, although overall prices were consistently above the national average.

These elevated prices were driven by high demand, supply constraints from West Coast refinery issues, and limited crude oil transportation options like pipelines.

PSX ticker:

Re-Posting As A Stand-Alone -- Valero -- California -- July 23, 2025

Locator: 48814REFINERY.

Link here.

I don't think there's a governor today that has marketed himself as much as Governor Gavin Newsom has as a "greenie." Now, planning to run for president in 2027 / 2028, there's a fly in the ointment: really, really high gasoline prices in California next summer, 2026.

This will likely be a stand-alone post. The link was sent to me by a reader. Thank you. I probably would have eventually gotten to it but I do miss a lot of things so I appreciate the link.

California officials are stepping into the fray to urgently find a buyer for Valero’s Benicia refinery before its scheduled closure in April 2026, a rare move that underscores the state’s growing anxiety over fuel security and price volatility. According to Reuters, in an exclusive report on Wednesday, the state has opened talks with potential buyers, including HF Sinclair and at least one unnamed European energy firm, to take over the Bay Area facility and preserve in-state refining capacity.

The 149,000 barrels-per-day refinery is one of just 10 refineries still operating in California. Its shutdown, combined with the planned 2026 closure of Valero’s Wilmington facility in Los Angeles County, could reduce the state’s gasoline and diesel production by nearly 17%.

In a position of desperation, the California Energy Commission is leading the effort to broker a deal, with support from the governor’s office. The move is an attempt to avoid severe market disruptions and cushion consumers from steep price spikes.

The stakes are particularly high. State modeling suggests that removing Benicia from the refining system could push pump prices toward $8 per gallon, particularly during summer demand peaks. Analysts warn that the closures could also reduce fuel inventories and strain supply chains across the western U.S.

As KQED reported earlier this month, Benicia city officials were blindsided by Valero’s June 28, 2025, announcement. Local leaders fear the loss of one of their top employers and taxpayers, Benicia receives roughly 40% of its general fund from refinery-linked revenues.

The way I read this, it's not going to come about without huge political cost and at the end of the day, the writing is on the wall for California: gasoline is only going to get more expensive going forward regardless of whether this refinery "survives." Who knows? Valero is now in a incredibly great position. What if Valero decides to slow-roll the sale or even suggest that it has decided to keep the refinery but with huge give-backs, tax-breaks, etc., from the state. This could get very interesting very, very fast. 

Scheduled for closure in April next spring, what might happen if a deal can't be closed by June, and the refinery goes through a typical planned shutdown and then re-start in late September. Wow, that would be a "hot" summer for the governor. 

My hunch: everyone will be adults and a solution will be found.

California: Valero Plans To Shut Down Or Significantly Reduce Its Larger Refinery In Northern California By The End Of April, 2026 -- April 23, 2025

Locator: 48491CALIFORNIA.

 Updates

April 26, 2025: WSJ opinion. Waste of ink.

Original Post

Link here. 

Link here: https://www.foxnews.com/politics/gop-lawmaker-warns-likely-move-blue-state-will-make-gas-prices-skyrocket. You will have to "cut and paste" that link.

 

This is a fascinating story. I will come back to this story later if I have the energy.

To put this in perspective: 

And this:

At best, this will only result in an increase in the price of gasoline in California. My hunch: if necessary, the state of California will allow another operator to come in to operate the refinery.

Critical mass:

The loss of refinery capacity in the state of California is a fascinating one. Social media has no clue.

My not-ready-for-prime-time initial thoughts on the news yesterday that Valero was going to close its large refinery in northern California in early 2026. I sent this to the reader who sent me the link to the story in the first place:

This is an incredibly fascinating story. There’s a phenomenon in math/physics — the phenomenon of critical mass — and we see it in many instances, including nuclear weapons. LOL.

But, for me, the best example is a brain tumor. The brain is encased in a non-expandable skull, unlike the abdomen. An abdominal mass can grow to an unbelievable size and won’t cause any problem simply due to its size. A brain tumor is completely different. It can grow in size to a very limited extent, often resulting in no signs or symptoms whatsoever, before it reaches critical mass and the individual literally goes into a coma, seizes, or dies in a space of hours, without immediate surgical relief of that intracranial pressure. 

Likewise, a significant shortage of gasoline occurring in a very short period of time, in a state already with the highest gasoline prices in the United States, won’t simply result in a gradual increase in price. Early on it will be obvious there’s a shortage of gasoline when service stations don’t receive their usual allotment. It will start with the small independents, first in the rural areas and the quickly in the large cities. One will start to see plastic bags placed on gasoline pump nozzles with "out of order" advisories. At that point, it’s over. Panic will set in. People will keep their gas tanks full, exacerbating the situation. 

All things being equal, if nothing changes between now and the refinery closure I give California one month before it becomes an unimaginable state — and then a national — emergency. 

Gasoline will be rationed and California will be back to gas lines. Focusing on the price of gasoline is the wrong metric. It won’t be price; it will be panic.

I don’t think California has the port facilities necessary to import that much gasoline.

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In Other California News

San Francisco Centre is a ghost town. Link here. Link here.

Price of gasoline in California: link here.

Phillips 66 will cease operations at its refinery in Los Angelese this year. Link here.

****************************
Fortunately Everyone In California Has An EV

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More From California

Oscar Eduardo Ortega-Anguiano, 43, was driving drunk, high, and speeding at nearly 100mph on the 405 freeway in Orange County in November 2021, when he crashed into a car being driven by a young couple, 19-year-olds Anya Varfolomeev and Nicholay Osokin, killing them both as they burned alive.

• illegal immigrant who already has been deported twice is going to be released again 
• in 2022, OEOA was convicted of two counts of gross vehicular manslaughter while intoxicated
• in spring 2022, he was convicted of two counts of gross vehicular manslaughter while intoxicated, and he was sentenced to 10 years in prison
• will be released six years early, unless state reconsiders;
• will likely be handed over to ICE though "sanctuary city / sanctuary state" iss ues come into play
  
• his previous criminal convictions include burglary in 2005; vehicle theft in 2007; and battery on spouse with kidnapping in 2014," the statement from ICE explains.
• good like finding anyone other than Fox News reporting this story.
  

PSX --Phillips 66 -- Shutting LA-Area Refinery After Governor Signs Bill -- Being Reported Everywhere -- Traders Love It -- October 17, 2024

Locator: 48609CALIFORNIA.

WSJ story here.

Three New Permits; Five Permits Renewed; Three Permits Canceled; Nine Producinng DUCs Reported As Completed; MRO With Spectacular Wells In The Killdeer Area -- January 30, 2024

Locator: 46689B.

Wind: wow, look at these Germany numbers. I must be missing something. Link here.

MPC: I figured this was the reason, but I did not know for sure. Great to see this confirmed. Link here.

Ohio-based oil refiner Marathon Petroleum (MPC) saw its Q4 profits exceed analyst expectations, the company reported on Tuesday—thanks in part to OPEC's production cuts.

The U.S. refiner reported a net income of $3.84 per share—or $1.5 billion—for the last quarter of 2023, while analysts estimated a figure far lower, at just $2.20 per share. This overachievement came even as global refining capacity increased, thanks to production cuts by OPEC+ combined with healthy demand, which helped to offset struggling fuel prices.

Marathon's crude oil capacity utilization came in at 91%, for a total throughput of 2.9 million bpd for Q4, while net income attributable to company settled at $1.45 billion. This compares with $3.32 billion in Q4 2022.

*****************************
Back To The Bakken

WTI: $77.82.

Active rigs: 39.

Three new permits, #40487 - #40489, inclusive:

• Operator: Grayson Mill (2); Oasis
• Fields: Westberg (McKenzie); Camp (McKenzie)
• Comments:
• Grayson Mill has permits for twwo WWahuus wells, SESE 12-152-97, 
• with one to be sited 318 FSL and 664 FEL andd one sited 308 FSL and 515 FEL;
• Oasis with one permit for a Lee S well,, SWNW 8-152-101, 
• to be ssited 20032 FNL and 266 FWL.

Five permits renewed:

• Lime Rock (3): a State, a Kary, and an Emil permit; the first two in Cabernet, Dunn County; and the third, Murphy Creek, also Dunn County:
• Hunt (2): two Patten permits, Parshall; Mountrail County;

Three permits canceled:

• Whiting: two Gullikson permits and one P Bibler permit; the Bibler in Williams County; the Gullikson permits inn McKenzie County

Nine producing wells (DUCs) reported as completed:

• 37645, 2,280, BR, Tailgunner 2A TFH, North Fork, no production data,
• 37646, 422, BR, Tailgunner 2B MBH, North Fork, no production data,
• 37649, 0 (no typo), BR, Tailgunner 2E TFH, North Fork, no production data,
• 39443, 2,391, MRO, Bunk 34-33H, Bailey,

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2023	7	9479	9438	13168	8180	7289	862

• 39444, 3,023, MRO, Luptak 34-33H, Bailey,

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2023	17	25821	25710	38170	17688	15786	1841

• 39445, 4,076, MRO, Margery 24-33H, Bailey, no production data,
• 39469, 3,349, MRO, McConnell 11-4H, Killdeer,

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2023	26	45670	45474	93852	34458	30732	3607

• 39628, 2,482, MRO, Amandus 31-17H, Killdeer,

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2023	30	25941	26011	78823	16658	16289	261
BAKKEN	10-2023	29	35003	35088	129764	20851	20409	286
BAKKEN	9-2023	4	4214	3938	25731	2054	1992	36

• 39630, 3,857, MRO, Mueller 41-17H, Killeer,

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2023	30	36673	36727	69486	21662	21187	336
BAKKEN	10-2023	25	41358	41133	81899	23020	22537	313

 Wells of interest:

• 17883, 402, MRO, Theresa Tuhy 14-33H, Bailey, t5/09; cum 283K 4/23;, recently back on line; too soon to see any halo effect. 

• 17316, 561, MRO, L. R. 21-16H, Killdeer, t10/08; cum 546K 7/23; still off line;

So, Just Where Do US Oil Refiners Stand? June 21, 2023

Locator: 44998REFINERS. 

We're gonna hit another record this year! Take this to the bank! 

• 18.3 + 0.25 = 18.55
• 18.98 - 18.55 = 0.43 = 2.3%.

Link here to Reuters.

HOUSTON (Reuters) -

U.S. crude oil refining capacity has reversed two years of declines and climbed by more than 100,000 barrels, to 18.1 million barrels per day. This year’s 18.1 million bpd capacity remains below the 18.98 million bpd peak in 2019.

During the first two years of the COVID-19 pandemic, processing capacity to produce gasoline, diesel and jet fuel fell 5.4% ...

..... prices surged, Biden demanded prices come down and refiners responded by increasing capacity ...

Increases reflect capacity expansions at Marathon Petroleum and Citgo Petroleum.

The total does not include a 250,000 bpd increase that came after the cutoff date at Exxon Mobil’s Beaumont, Texas refinery in March of this year. The Beaumont expansion, the largest addition to a U.S. refinery in more than a decade, pushed the total to about 18.3 million bpd, still shy of the 2019 peak.

Marathon Petroleum Corp remains the nation’s largest refiner, with its Garyville, Louisiana, refinery now the nation’s third largest with 596,000 bpd capacity.

Marathon’s 2.9 million-bpd crude oil refining capacity represents 16% of the nation’s total.

Valero Energy Corp remains the second-largest U.S. refiner by volume with its 2.1 million bpd capacity equal to 12% of the U.S. total.

Motiva Enterprises, which operates the 626,000-bpd Port Arthur, Texas, refinery, operates the single largest refinery by capacity in the U.S. with Exxon’s Beaumont plant just behind it. Motiva is the U.S. refining arm of Saudi Aramco.

Citgo Petroleum Corp’s Lake Charles, Louisiana refinery grew by 37,000-bpd to 455,000-bpd.

The increase comes as cars and trucks are switching to renewable fuels and rechargable batteries instead of fossil fuels to reduce rising global temperatures from climate change.

**************************
Christopher Nolan Filmography

The films:

• Following (1998)
• Memento (2000) 
• Insomnia (2002) 
• Batman Begins (2005) 
• The Prestige (2006) 
• The Dark Knight (2008) 
• Inception (2010) 
• The Dark Knight Rises (2012) 
• Interstellar (2014) 
• Dunkirk (2017) 
• Tenet (2020) 
• Oppenheimer (2023)

Observations From Twitter Accounts I Follow -- February 18, 2022

Before we get started, for cocktail trivia tonight, there are about 56 "tanks" in a battalion. 

• 125 "tank" battalions = about 7,000 "tanks"
• Russia has about 12,000 "tanks"
• the US has about 6,000 "tanks"
• Russia likely has more "tanks" on Ukraine's northern and eastern borders than the entire US Army "tank" inventory.
  

Two observations -- TODAY -- from the twitter accounts I follow:

• war: no one, here in in the US, absolutely no one, is concerned about Russia's imminent invasion of Ukraine
• Putin knows that sanctions will wreak havoc on Europe, not Russia;
• the US is in "spectator-mode"
• as long as it stays among "Russians," this is not a NATO issue; it might be a European issue;
• one of two likely scenarios:
• Russia stops with Kiev and there is a East Ukraine / West Ukraine standoff
• Russian generals on the ground race to Lviv
• oil: some perceived anxiety that US becomes a net crude oil importer starting as early as this year
• EIA suggests that:
• US net crude oil: about 4 million bopd net export
• US new petroleum products: about 4 million bpd net imports
• US net trade (oil out but refined products in): 0
• if I'm reading this correctly, US demand will be such that refiners will not keep up with US demand
• operators are currently operating at about 87% of their operable capacity

Link here.

*********************
Road to Mexico

Link here.

Road To Mexico; Learning Spanish With Sophia -- January 21, 2022

Mexico refinery almost $4 billion over budget. 

This is a huge story.

PEMEX is heavy in debt; worst among all oil companies in the entire world.

Now this.

This is Mexico's mega-refinery: the Dos Bocas project.

• 340,000 barrel / day
• purpose: halt crude oil exports starting in 2023
• now, the project may fail to produce a single gallon of gasoline in 2022;
• may produce only limited amounts of fuel for several years after that;

Costs:

• original estimate: $9.0 billion
• new estimate: $13.0 billion
  

*******************************
Sophia And Spanish

Sophia and I are taking Spanish lessons on Duolingo together. 

 For a break, we are trying something different. One of Sophia's favorite books is Sisters.

We got identical "graphic novels" at Barnes and Noble, one in English, one in Spanish. Sophia "reads" the one in Spanish and I read the one in English. This is our first time through. It will take many iterations. 

Most interesting: the translations are matched up exactly in each book, but so many idioms. It will be a challenge, but it's great fun learning these idioms. Wish us luck. Here we go.

Don't laugh. Our pronunciation is horrible, but this is our first time going through the books. The good news: my wife, Sophia's grandmother's native language is Spanish -- well, actually, her first language was Japanese but she left Japan when she was about two years old. Her first home in America was in Texas and her next language was Spanish until she started school when she was seven years old. She knew no English when she started school. She spoke Japanese with her mom and Spanish with her dad. 

So, our pronunciation is horrible but Grammy will work with us and help Sophia. I'm a lost cause. LOL.

Holly Frontier To Buy Sinclair -- HF Frontier -- To Close Mid-2022 --- August 4, 2021

HollyFrontier: purchases Sinclair.

From earlier this week; simply did not get around to it until now.  Direct to the  Platts story here.

Summary:

• Sinclair's renewable diesel business key part of transaction;
• refining capacity will almost double
• will provide RIN generation through marketing

From the article:

HollyFrontier will buy fellow Rockies refiner Sinclair, a deal which will add two refineries, a renewable diesel plant and access to a branded marketing network, thus increasing RIN generation

Increased RINs generation -- both through increased RD production and through Sinclair's marketing business -- will lessen the onerous burden of the US Environmental Protection Agency's Renewable Fuel Standard on the combined company.

The new company will be known as HF Frontier and the deal is expected to close in the middle of 2022. Also included in the $1.8 billion all stock deal is Sinclair's crude pipelines and terminal assets, which will be acquired by HollyFrontier's master limited partnership, Holly Energy Partners.

This is really, really cool. Quick: where is the demand for renewable diesel?

Meridian Refinery Update -- Williston Herald Paywall -- But Headlines Say It All -- September 30, 2020

Link here, behind a paywall, but headline says it all:

• ND Supreme Court rules refinery can begin construction;
• delay gave Meridian time to optimize blueprints

Google:

Gulf Coast Refineries

Hurricane Watch -- September 12, 2020

There is so much fake news out there, I can no longer make sense of even some of the most basic "stuff," like hurricanes. From my perspective this has been a most uneventful hurricane season to date, even including "lo-impact, no-impact Laura." But then we get, see second paragraph in note below:

 Link here.

The Atlantic’s 18th storm is coming together off Florida’s eastern coast and will drift west into the oil-rich Gulf of Mexico over the weekend where it could reach nearly hurricane strength before coming ashore.

When the storm’s winds reach 39 miles (63 kilometers) per hour it will likely be named Sally. That would mark the earliest that 18 storms have formed in the Atlantic during a hurricane season, breaking the previous record set by Stan in October 2005, said Phil Klotzbach, lead author of the Colorado State University seasonal hurricane forecast. It is possible a second system in the far eastern Atlantic will be named first.

“The system is forecast to strengthen to near hurricane intensity by early next week as it moves across the northeastern Gulf of Mexico,” Eric Blake, a hurricane forecaster, wrote in his outlook.

In addition to the depression, which has sparked a tropical storm watch in southern Florida, the hurricane center is watching three other potential storms -- one in the Gulf of Mexico and two off the coast of Africa. On top of that, Tropical Storms Paulette and Rene are churning through the central Atlantic. Paulette will likely become a hurricane and could strike Bermuda Monday.

Why Are Refiners Continuing To Produce So Much Distillate Fuel? -- August 29, 2020

Among the many things that don't make sense this year, one of the most glaring: refiners continue to add more distillate fuel to US inventories. 

Someone well versed in the energy sector wrote me, saying that it made no sense; he couldn't come up with any reason why refiners would do this.

I suggested that an analogy may be natural gas production in oil plays. For those in the Bakken, natural gas production is a necessary hassle / expense. One can't produce oil without producing natural gas, even in an oil play, and it gets worse as the oil field matures. 

I suggested the same might be true for refiners. A refinery is a complex operation made up many parts, perhaps not unlike a Rube Goldberg machine. Perhaps one can't simply turn off the one part of the refinery that makes distillate fuel if one wants to keep the entire operation running.

I don't know. 

The reader was hoping that someone with a background in refinery operations might weigh in, weighing in on whether there is some validity to that possibility. 

Links of interest:

• US crude, distillate stockpiles rise unexpectedly, EIA -- Reuters, July 22, 2020;
• Changing demand for petroleum products has led to operational changes at US refineries -- EIA, August 28, 2020;

 From last month, July 22, 2020, Reuters:

U.S. crude oil and distillate inventories rose unexpectedly and fuel demand slipped last week, the Energy Information Administration said on Wednesday, as a sharp outbreak in coronavirus cases hit U.S. consumption.

U.S. crude production ticked higher and refined products supplied, a proxy for fuel demand, declined. The market has recovered from the doldrums of April, when U.S. prices briefly dropped to more than negative-$40 a barrel, as producers trimmed supply due to a slump in demand amid lockdowns to control the pandemic.

Crude inventories rose 4.9 million barrels in the week to July 17 to 536.6 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.1 million-barrel drop. Production rose to 11.1 million barrels per day (bpd), up 100,000 bpd.

Distillate stockpiles, which include diesel and heating oil, rose 1.1 million barrels to 177.9 million barrels, their highest since December 1982, data showed. Analysts had expected a 618,000-barrel drop.

Re-Posting: MPC To Close Two Refineries -- August 3, 2020

The refinery deal is a bigger deal than folks realize. Another loss for California. I assume North Dakota is watching closely.

Re-posting:

• MPC: "7-11" to buy Marathon's Speedway for $21 billion; link here; at the close on Friday, trading at $38.20/share; Monday: $38.89, pretty much unchanged; Reuters says the deal could fetch between $15 billion and $17 billion;
  
• MPC: won't re-start two idled oil refineries; one in California; one in New Mexico; link here;
• Martinez, CA: to comply with California's Low Carbon Fuel Standards objectives and greenhouse gas-reduction targets; fourth largest refinery in California
  
• Gallup refinery, in New Mexico: 26,000 b/d
• May 5, 2020, earnings call: said these refineries were being looked at because they are the company's highest-cost facilities among its sixteen refineries
• note to folks in ND/Mandan refinery: too much global refining capacity and existing refineries will be pressured by new facilities coming online
• MPC: from Reuters --
• Marathon Petroleum plans to permanently close two small U.S. oil refineries in Martinez, California, and Gallup, New Mexico, the company said, eliminating 800 jobs in response to lower fuels demand.
• The largest U.S. refiner by volume had earlier idled the two facilities following weak demand due to COVID-19 outbreaks in the United States. U.S. refiners on average idled about 20% of total processing capacity on falling vehicle and air travel.
• Marathon said it plans to use the Martinez facility as an oil-storage facility and is evaluating its future use to produce renewable diesel, a fuel made from industry waste and used cooking oil. Martinez is California’s fourth largest refinery.
• MPC: Mandan Refinery, Mandan, North Dakota
• since 1954; a very, very old refinery
• 71,000 BPCD capacity
• refined products shipped by rail and truck
• CEOs are making decisions, it seems, with lightning speed;
• total MPC global refining capacity: 3 million BPCD
• Mandan Refinery: 2% of MPC's total refining capacity

Forbes On The New ND Refinery -- July 27, 2020

Forbes on the new ND refinery. Story/link sent to me by a reader A "huge" thank you. Archived.

I provided my thoughts to the reader but I will not post those thoughts now. I will post them later, but they will be buried in the blog for the archives. My opinion and 69 cents will get you a cup of senior coffee at McDonald's.

Meridian Refinergy Near Dickinson Gets Okay From ND Supreme Court -- July 1, 2020

Link here.

The North Dakota Supreme Court has sided with state regulators in a challenge to a proposed oil refinery near Theodore Roosevelt National Park in the western part of the state.

In a unanimous opinion, the state’s high court upheld a lower court ruling that affirmed permitting decisions by the Department of Environmental Quality.

The Bismarck Tribune reported Tuesday that the state Supreme Court ruled that the department “did not act arbitrarily, capriciously, or unreasonably in issuing the permit.”
William Prentice, the CEO of Meridian Energy Group, called the ruling “very welcome.” 

In case you missed it, the ruling was unanimous.

********************************

Gasoline Demand

Link here.

Three Wells Coming Off Confidential Llist; Unusually Large Number Of Refineries Up For Sale -- January 31, 2020

My 2-cents worth: anyone over at twitter who suggests Libya has an impact on oil prices loses all credibility with me. Johan Svedrup will have more impact than Libya. 

Oil sands spending jumps: first jump since 2014 crash. CAPEX expected to grow 8.4% in Canada's oil-sands.

Ouch!: Shell hits two-year low ... after it scaled back share buybacks ... underscoring the pressure on Big Oil due to slumping natural gas prices and weaker refining and chemicals. 4Q19: missed profit expectations.

*******************************

Back to the Bakken

Active rigs:

$52.30	1/31/2020	01/31/2019	01/31/2018	01/31/2017	01/31/2016
Active Rigs	54	65	59	40	45

Three wells coming off confidential list today -- Friday, January 31, 2020: 107 for the month; 107 for the quarter, 107 for the year:

• 35854, drl, XTO, FBIR Bird 21X-19B, drl,
• 35853, drl, XTO, FBIR Bird 21X-19F, drl,
• 22575, drl, Enerplus, Acadia 148-95-02A-11H TF, Eagle Nest,

RBN Energy: a look at the unusually long list of US refineries on the market. Archived.

It was reported earlier this month that Shell is seeking a buyer for its Washington state refinery, which is located just outside Seattle in Anacortes. That brings to eight the number of U.S. refineries said to be up for sale by a variety of sellers, from integrated major oil companies to independent merchant refiners — plus another refinery that is already under contract. That’s an unusually high number — refineries rarely change hands in the U.S. and when they do, it’s typically for large sums of money to sophisticated and vertically integrated buyers. Today, we discuss the facilities on the block in the East Coast and Mid-Continent regions and the market drivers that could be impacting the decisions of potential buyers and sellers.

Nearly all of the 135 fuel refineries in the U.S. were built prior to 1970 — the original parts of some were constructed as early as the late 1800s. For a variety of reasons, these facilities tend to operate for long periods of time without frequent changes in ownership. There have been a few notable years with a large number of refineries changing hands, such as 2017 and 2018, when nine and 11 refineries were sold, respectively. However, these were mostly due to large spinoffs and mergers, such as Andeavor’s acquisition of Western Refining in 2017, which involved three refineries, and Marathon Petroleum’s acquisition of Andeavor in 2018, which involved 10 refineries. 

Since 2013, an average of about three refinery transactions have taken place per year involving an average of about five refineries. If we exclude the mergers and spinoffs in 2017 and 2018 and only look at transactions involving a single refinery, then an average of only about two transactions have taken place per year since 2012. In 2019, only one transaction closed: Chevron’s acquisition of Petrobras’ Pasadena, TX, refinery.

Notes From All Over, Part 1 -- January 11, 2020

Refinery: not looking good. Google planned refinery by national park hurt by funding, lawsuits or go to KXNET news.  A reminder:

• greenfield refinery
• $800 million 
• near Theodore Roosevelt National Park 
• Williston would love to have it

Snow: overnight here in Grapevine.

Autos: quick! Name the #1 selling sedan in the US for the past 14, maybe 15, years. Hint: a member in that same family made the top 10 list also. Name the #1 selling SUV in the US for the past four years for so. I'll come back to this. I heard this on the radio while driving into work this morning -- I need to confirm. We'll see. Answers here.

Real estate: Charlie Sheen bought California mansion for $7.2 million 2006; apparently sold the mansion this past week to an undisclosed buyer for $6.6 million. He had been asking for $10 million; was on the market for two years. 

Recommendation: if you are an investor, and like to trade/invest on-line, there are many, many options out there. My personal favorite: Schwab. I am completely blown away by their service -- but, we are fortunate to have a local branch. But I was with Schwab decades before I lived near a brick-and-mortar branch.

One example: no matter how little or how much money I deposit in the local Bank of America, there's generally a hold on it overnight despite the fact that Bank of America owns Merrill Lynch and my ML account is linked to the bank. I've been banking with BofA for decades. On the other hand, when I drop by the Schwab branch, a) there is no standing in line; b) one is greeted with genuine smiles; c) offered coffee (sometimes an accompanying snack); d) the deposit is made in less than a minute; e) a "complete" receipt is returned; and, most amazing, f) the deposit shows up in the account at the same time as one gets the receipt and one can begin trading immediately.

It blows me away.

Okay, enough of this. To the top stories of the week.

Refinery Fire In San Francisco Area -- October 15, 2019

In light of news today regarding a refinery fire in the San Francisco area, re-posting this note from May 7, 2010, along with a comment from a reader reacting to that post. From the link:

An explosion and fire ripped through fuel storage tanks at a facility in Crockett Tuesday, sending flames and black smoke billowing into the skies and forcing the closure of a stretch of Interstate 80.

The incident began around 2 p.m. at a storage tank farm at NuStar Energy facility nestled in the hills above the 90 block of San Pablo Ave. The fire ignited the vegetation on a hillside bordering the storage tanks.

Based on the video footage and the fact that the fire department is going to let this one "burn out" on its own suggests this will be relatively "contained." Lots of smoke, but perhaps not a lot of impact.

Original Post

This one tweet seems to say it all -- Patricia squeezed in a lot of data in 280 characters. LOL.

My attempt to figure it out:

• mogas: gasoline
• USWC: United States West Coast
• ARA: Saudi Arabia
• USCS: United States Customs Service
• Vio La Benecia: Valero refinery; shut down for pollution issues; 
• Chv El Secundo: I assume this is Chevron El Segundo, Bay Area; Chevron; often in the news, and not always in a "good" way
• Martinez: a number of refineries in the Martinez area, as far as I know; many issues over the years; Andeavor; "Shell name"; Marathon; [see first comment below: Two refineries in Martinez. Downtown has Shell. To the east across I-680 is the old Tesoro, renamed Andeavor on its way to purchase by Marathon??] [Summer, 2019: PBF acquires Martinez; Shell no longer has any refinery operations in California; link here.]
• "early re-starts": Valero may "re-start" in mid-May?

Hopefully, Argus Media will provide the back story. Perhaps this is "normal" for this time of the year in California.

Reader's response:

• Two refineries in Martinez. Downtown has Shell. To the east across I-680 is the old Tesoro, renamed Andeavor on its way to purchase by Marathon?? 

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From A Parallel Universe

As someone noted, this is from a parallel universe. I had not seen this until tonight: Olivia Newton John, Andy Gibb, and ABBA on ABC. Who wudda thought?

Medley, ABBA, Andy Gibb, Olivia Newton John

California Had Jerry Brown, Bullet Train; Mexico Has AMLO, Refinery -- July 26, 2019

Link here.

I've followed this story fairly closely. Two facts I did not know:

• Rocio Nahle, who became energy minister under Mexico’s new government in December, thinks the country can replicate Reliance Industries Ltd’s Jamnagar refining compound. But there are a few snags.
• Mexico is proposing to build a new refinery for $8 billion in three years, the amount of time and money it took Reliance to complete just a single phase of its complex. And Mexico plans to do so without using private funds, creating a strain on public coffers and calling into question the efficiency of a state-owned facility when the country’s six refineries are already losing more money the more fuels they produce.
• Mexico’s own refineries are operating at about 35% of their capacity because Pemex hasn’t had the funds to invest in them, making the country reliant on foreign fuels to meet domestic demand. About 65% of the gasoline that Pemex sells in Mexico is imported, mostly from the U.S.

Rocio Nahle, I guess, is to AMLO what Rocinante was to Don Quixote.