Tag Archives: diesel fuel supply

Misdirected Complaints

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Americans have endured record inflation in recent months, partially caused by skyrocketing energy costs. The Biden administration has been quick to take credit when gasoline prices have decreased slightly, but has consistently avoided taking responsibility for the role they have played in the increases in both gasoline and diesel prices. On Monday, Hot Air posted an article about the diesel fuel shortage.

The article reports:

During recent public appearances, President Joe Biden has continued to complain about energy prices as well as the potentially catastrophic shortage of diesel that has been forecast to hit the United States soon, particularly in the northeast. Of course, he never takes the blame for any of this himself. He instead tries to blame the “greedy” energy companies or, of course, Vladimir Putin. He has called for bans on oil and gas exports and even suggested a mandate that diesel stocks be maintained at a higher level. But a new report from the Institute for Energy Research addresses the actual root of these problems. What we’re facing is a significant loss in refinery capacity in the United States and its various territories. We’ve lost more than a million barrels per day in production capacity, but rather than working to rebuild that capacity, the White House is issuing new edicts that will result in diminishing it further.

…Banning petroleum exports (which are already at severely low levels) would only cut off markets, making the American oil and gas industry even less profitable, thereby disincentivizing any efforts to expand capacity. And as for an executive order directing a specific amount of diesel to be kept in stock, well… that’s simply insane. You can’t order more diesel to magically appear with a few scribbles of a pen. Someone has to produce the required oil, move it to a refinery, and create the diesel.

The article concludes:

Energy prices – including diesel – continue to rise and stockpiles continue to fall. We’re talking about a situation where people could literally wind up freezing to death over the course of the winter. There are steps the federal government could be taking to stave off such an outcome and improve the situation. But thus far, the Biden administration is doing the exact opposite. Some of you may want to start stockpiling blankets at this point. You might wind up needing them.

Bad policies have consequences. We are desperately in need of competent people in Washington.

I’m A Little Concerned About This

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On Wednesday, NewsMax posted an article about the coming diesel crisis in America.

The article reports:

Diesel fuel inventories in the East Coast are at their lowest level ever heading into the winter, prompting some areas in the Northeast to ration fuel.

According to one estimate, the U.S. has only 25 days of diesel fuel — the lowest since 2008.

One supplier, calling “conditions rapidly devolving,” is requiring customers to give 72 hours’ notice to secure fuel and freight, Bloomberg reports.

“At times, carriers are having to visit multiple terminals to find supply, which delays deliveries and strains local trucking capacity,” said the supplier, Mansfield Energy, in a note to clients.

In areas of the country where diesel fuel is tightest, prices are 30-80 cents higher than the market average, according to Mansfield.

The article notes:

The shortage, which is also spreading to Europe, is due to underinvestment in refining capacity and refinery closures, according to Goldman Sachs.

The Biden administration’s war on fossil fuels has discouraged the investments needed to grow the industry enough to keep up with the demand. Banks are not going to lend to an industry that the government is trying to shut down–they are smarter than that. Until we get either enough sensible people in Congress to promote sensible energy policies or elect a new President in 2024, we will have fuel shortages of various kinds and the American people will pay a price for electing our current leaders. The thing to remember here is that it is the ‘little guy’ (who prospered under President Trump) who is suffering. Congress does not personally pay for their gasoline (the taxpayers do), and most Congressmen have somehow earned enough to pay for heating their Washington residences and their homes. The war on fossil fuels is simply more of the Biden administration’s war on the middle class.

Delta Owns An Oil Refinery!?!?

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On Monday, Hot Air posted an article about the current energy problems in America (and worldwide).

The article quotes The Washington Post:

The country is down to 25 days of diesel supply with stockpiles at their lowest level for this time of year in records going back to 1993. In the Northeast, where more people burn fuel for home heating than anywhere else in the country, inventories are a third of their typical levels heading into winter. National Economic Council Director Brian Deese called the levels “unacceptably low.” By late October, diesel prices had risen for more than two weeks to 50% above where they were a year ago.

The Wall Street Journal reports:

The Biden administration has leased fewer acres for oil-and-gas drilling offshore and on federal land than any other administration in its early stages dating back to the end of World War II, according to a Wall Street Journal analysis.

The article includes the following chart:

The article at Hot Air reports:

Where does Delta come into all this, after the commodities and doom and gloom lecture? That’s kind of interesting, too. At the top of the post, where I linked to those three PA refineries being closed in 2012? One of them was the Trainer facility, and it was given an EPA reprieve, of all things. CONOCO-Phillips still wanted to unload it, and Delta Airlines bought it as a hedge against oil prices and jet fuel shortages. They lost their butt owning it for years – as a small refinery fighting the EPA mandates tooth and nail didn’t help – and repeatedly tried to unload it, but, HEY! There’s been a sudden turnaround. Things are looking rosy and they are looking prescient. From April:

Delta will see a benefit of 20 cents per gallon of jet fuel from its refinery, which acts as a hedge against the spike in fuel. In particular, the refinery supplies fuel for Delta’s York operations, but Chief Financial Officer Daniel Janki said Monroe Energy’s output acts as a 40-50 percent fuel hedge across Delta’s network. In the first quarter, the refinery knocked about 7 cents off each gallon of jet fuel Delta consumed.

When Delta first bought the Trainer, Pa., refinery from Conoco Philips — now Philips 66 — in 2012, analyst opinions were mixed. Some argued it was a stroke of genius on the airline’s part, while others said it was too far afield from Delta’s core operations to make sense for an airline with no experience in selling or marketing petroleum products. The years since have been up and down for the refinery but now, with oil prices spiraling up in the wake of the Ukraine war, the refinery is proving its worth.

The refinery generated $1.2 billion in revenue in the first quarter, compared with $48 million in the same quarter in 2019, Delta said in its first-quarter results. About 80 percent of its output is diesel and gasoline, prices of which have surged. “Our Monroe refinery provides a unique benefit, acting as a partial hedge to elevated cracks,” Janki said. “This is especially true with New York Harbor Jet cracks, where our production at Monroe provides 100 percent offset.”

It really is time to rediscover American energy independence!