Posted on 10/26/2024 5:48:45 PM PDT by artichokegrower
It is almost surreal.
I truly do not know how these threats could be credible. A modern refinery probably takes dead minimum 3 years to build, permitting and enviro studies included. And that number could be closer to five years. If Valero or Chevron have other refineries, it would take a solid year to expand them to cover what would be lost shutting down their CA refineries.
Dear gas companies, threats to the DEMs don’t work out the way you would hope. Announce something you’re actually going to do and do it.
bttt
Sure, but they need to not be saved from themselves. They need to be allowed to fail good and hard, so we have a vivid example of what happens with Socialism, even when ‘the right people’ are in charge.
That’s the fun part. They have no intention of replacing the lost volume or selling to California from an out of state refinery, so they won’t need to expand.
Additionally, the current Admin won’t provide needed permits for a new industrial refinery, so it’s not going to happen anyway.
Phillips 66 didn’t threaten, they’re actually just going to shut down, demolish and sell off the refinery land. The reason refiners are doing this is not just because they are fed up but because the state government is mandating that they increase the volume of gasoline kept on hand, which necessitates the expansion of tank farms, which requires state permitting... which the refineries know they won’t get. So they’ll get fined endlessly for a situation they are not allowed to fix.
Top o’ the world, Ma! Top o’ the world!
Valero’s petroleum refinery is 6th biggest in the state, with just under 9% of the production - slightly bigger than the Phillips 66 that is closing.
They also have a tiny asphalt facility.
Since California has different standards for gasoline and diesel, losing 17% or so of the production should have a noticeable impact on pricing.
Corrections welcome with anyone with better numbers to work from.
Fair point—it will happen in slow motion over several years.
If any other state shuttered refineries it would raise prices for us all as we compete for the same diminished supply but California has mandated blends that out of state refineries don’t make. With any luck gas in CA will skyrocket and leave the rest of us untouched.
All I can x say is, “You reap what you sow”.
I agree with you, the refiners are in a no-win situation if the state mandates go through (if they have not already)
My question is, how are they still in business if they shut down CA refineries? The Valero, Shell and Chevron refineries out here are enormous.
Wasn’t there a book about companies shutting down, something to do with a guy named John Galt?
Why would they want to convert or build a facility to make California standard gasoline and then pipe or truck it into California. There would need to be an even bigger price differential to make it worth their while. Story would be different if you could sell regular gasoline there.
It’s due to CA saying we are going to manage your inventories...”to prevent shortages.”
The state actually doing that will GUARANTEE gasoline shortages in CA...which is their goal to force people into EVs.
Yeah, you might be right. Can’t imagine what it was, though. /sarc
If they don’t ship nor sell in CA, they’ll have plenty of fuel. Which may be what happens...who knows?
Well there goes the giant pumkin
Mandate has been passed and are to be implemented soon.
The shutdowns have not yet occurred, but Chevron is already moving HQ from the Bay Area to Texas, they’re saying that they are thinking about shutting down their CA refineries. Phillips 66 has already said they will shut down period and are already not renewing permits as well as seeking buyers for the soon to be cleared land.
However, none of these refineries are the only ones owned by these companies so closing them will not put the companies out of business. If anything, many of those refineries are old and they may improve their operating margins if they don’t have to deal with them any more.
CA won’t be able to buy gas intended for another state either - not just state law, but Federal law forbids selling gas from one emissions area to another. CA’s gas is unique to the major regions of the state and you have to shut down and readjust a refinery to run the EPA mandated boutique blends for a different area. Nobody wants to do that if they can avoid it.
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