Lower Govt.spending
Just friggin' unreal!! These Bozos just spent another 40 bill on Ukraine and will spend whatever congress will approve!! They are hell bent on killing the economy any way they can. Deese has to know it unless he's totally asleep!! I gotta say Marthas show literally flew by the sign of a very well run show.
Most people in the States have forgotten the propaganda techniques used by the U.S.S.R. Not so for the Commies calling themselves Dems.
As of this morning, the national average cost of a gallon of diesel fuel is $5.57 — which is the record high, according to the American Automobile Association. A year ago, it was $3.17 per gallon. (The national average cost of a gallon of regular gasoline this morning is $4.52; one year ago, the cost was $3.04.)
We are now reaching the point where the cost of diesel fuel is making some goods too expensive to transport. One trucker told the Orlando Fox affiliate yesterday that, “The cost of diesel is single-handedly taking us out of the game one by one no matter how big you are. . . . If you’re getting paid $2 per mile you’re not taking that load no matter if it is baby formula or orange juice because the cost of diesel is $5 plus. You just can’t take that load.”
But the cost of a gallon of unleaded gasoline or diesel fuel is not just a matter of how greedy an oil company feels on any given day and has very little to do with how much that company is paying in taxes. The cost of crude oil makes up 59 percent of the cost of gallon of regular gasoline, and just 49 percent of the cost of diesel. Refining is a slightly bigger share of the cost of a gallon of diesel fuel than of the cost of a gallon of regular gas — 23 percent for diesel to 18 percent for regular, according to the U.S. Energy Information Administration. Distribution and marketing costs make up 18 percent of diesel costs.
And keep in mind, federal taxes on diesel are slightly higher than those on regular gasoline — 24 cents per gallon on diesel compared to 18 cents per gallon on regular.
But if we really want to know why the cost of diesel is increasing faster than the cost of regular gasoline, we need to look at those refining costs. It doesn’t matter how much we “drill, baby, drill,” unless we also have the ability to “refine, baby, refine,” — or we become dependent upon foreign refiners.
Back in 2020, U.S. oil-refinery capacity peaked at 19 million barrels per day, according to the EIA. But because of the pandemic, and the delayed decision to permanently shut down the Philadelphia Energy Solutions refinery after a major accident in 2019, U.S. refinery capacity declined significantly during that year. (PES was the largest oil refinery on the East Coast and refined 335,000 barrels per day.)
In addition to the PES refinery, five more shut down over the course of 2020: the Shell refinery in Convent, La., the Tesoro Marathon refinery in Martinez, Calif., the HollyFrontier refinery in Cheyenne, Wyo., the Western Refining refinery in Gallup, N.M., and the Dakota Prairie refinery in Dickinson, N.D. Those six collectively refined more than 1 million barrels of oil per day.
Thus, the U.S. started 2021 with its lowest annual refining capacity in six years, and that capacity did not expand significantly over the rest of the year. And as the pandemic’s effects on American life faded, month by month, demand for fuel increased — not just from drivers but from trucking and shipping companies, construction companies — remember, 98 percent of all energy use in the construction sector comes from diesel — and from airlines and other consumers of jet fuel.
Why are we experiencing these stunning fuel prices? Because we’re getting back to pre-pandemic levels of demand, while our refineries are pumping out about a million fewer gallons of fuel per day than they did before the pandemic. And you know what happens when you mix lower supply with higher demand.
Right now, someone is likely shouting, “Reopen those closed refineries, then!” But that’s not so easy.
The former PES refinery complex in Philadelphia is being demolished. The Shell refinery is slated to become an “alternative fuels complex,” and it’s a similar transition for the Tesoro refinery. The HollyFrontier refinery is already converted to processing biofuels, as is the Dakota Prairie refinery. (Certain environmentalists will denounce the greedy oil companies and praise the companies producing environmentally friendly biofuels, never stopping to check and realize that many of them are the same companies.)
Wait, I haven’t even gotten to the bad news: Chemical maker Lyondell Basell Industries announced in April that the company will permanently close its Houston crude-oil refinery by the end of 2023. That plant refines about 263,000 barrels of gasoline, diesel, and jet fuel per day.
We almost never build oil refineries in the U.S. anymore. According to the EIA, the newest refinery in the United States is the Targa Resources Corporation’s site in Channelview, Texas, which began operating in 2019 and processes 35,000 barrels per day. Before that, the newest refinery with significant downstream unit capacity was Marathon’s facility in Garyville, La. That facility came online in 1977.
Back during the late Bush and early Obama years, Hyperion Energy attempted to start a massive project in South Dakota, aiming to build what would have been the sixth-largest oil refinery in the nation. But the project grew mired in red tape and environmentalist opposition and eventually was canceled. We would have experienced widespread shortages of refined fuels many years ago if some companies had not completed large-scale expansions of existing refineries.
And so, President Biden’s fuming about oil companies not drilling and demanding they “use it or lose it” is something of a red herring; it would not do U.S. oil consumers a lot of good to dramatically expand the supply of crude oil if there isn’t enough refinery capacity to turn that oil into useful products. And right now, there are no major projects planned to build new oil refineries or expand capacity at the existing ones.
In short, successive administrations, consumers, and the cultural zeitgeist made it clear to the oil industry that their product did not have a future — and so oil companies reduced their investments at all stages of seeking out, drilling, obtaining, and refining their product.
Useful to remember that the US has increased its population by 51 million since 2000.