Biden considering emergency measures to boost refinery output

Jan 25, 2011
16,310
8,123
146
Waiting for the same conservatives who bitch about high gas prices to now complain about the government using its power to rein in gas prices
These are the same people who say the oil companies are being prevented from drilling more oil by Biden even though they have all very publicly said they have no desire to increase production. Of course they will bitch.
 

K1052

Lifer
Aug 21, 2003
41,150
21,335
136
US distillate capacity is down 4M b/d since early 2020 and refiners do not want to bring any of that back online. As it stands current capacity is running mid 90% utilization. They wrote back to Biden "well drill more oil" when that isn't the major problem now. They just want to rake in as much cash as possible no matter what at this point.

Any serious disruption to remaining capacity will likely have catastrophic consequences. If the gulf coast takes a couple hurricanes or there is a massive power outage in Texas shit will get real.
 

HomerJS

Lifer
Feb 6, 2002
31,125
19,371
136
US distillate capacity is down 4M b/d since early 2020 and refiners do not want to bring any of that back online. As it stands current capacity is running mid 90% utilization. They wrote back to Biden "well drill more oil" when that isn't the major problem now. They just want to rake in as much cash as possible no matter what at this point.

Any serious disruption to remaining capacity will likely have catastrophic consequences. If the gulf coast takes a couple hurricanes or there is a massive power outage in Texas shit will get real.
Biden to oil companies: Use those unused leases. Government doesn't drill
 

K1052

Lifer
Aug 21, 2003
41,150
21,335
136
Biden to oil companies: Use those unused leases. Government doesn't drill
The whole industry is protecting margin this time around no matter what it does to consumers. At these levels though there starts to be political risk to them because if the Rs take over and they also cannot get prices (limited existing leverage) down more extreme measures will end up on the table.
 
  • Like
Reactions: iRONic and hal2kilo

K1052

Lifer
Aug 21, 2003
41,150
21,335
136
Nonsense. They have said repeatedly they have no desire to increase production. That’s end of story on drilling. They don’t want to..
All the drillers are telling Wall Street in the open they intend to maintain margin and pay off shareholders. The context of this is that investors pissed away several hundred billion paying drillers to chase volume in the last decade. Put simply the long runs of cheap fuel we saw were propped up on these losses and unless investors again chose to loose that kind of money aren't likely to return.
 

Brovane

Diamond Member
Dec 18, 2001
4,469
490
126
Better late than never with this. The Biden Administration should have been acting on this back in March not June. Current fuel prices are having a significant impact on those of lower socio-economic status. Not everyone can go out and buy a $50k BEV. We are probably just one refinery fire away from significant supply disruption in fuel. We are close to having diesel shortages which is basically essential for transporting just about everything you see in store shelves. We could also be looking at shortages in DEF which would have a huge impact on shipping.
 
  • Like
Reactions: Captante

K1052

Lifer
Aug 21, 2003
41,150
21,335
136
Better late than never with this. The Biden Administration should have been acting on this back in March not June. Current fuel prices are having a significant impact on those of lower socio-economic status. Not everyone can go out and buy a $50k BEV. We are probably just one refinery fire away from significant supply disruption in fuel. We are close to having diesel shortages which is basically essential for transporting just about everything you see in store shelves. We could also be looking at shortages in DEF which would have a huge impact on shipping.
Their options are sort of limited. Not sure what existing existing authority any administration has to order refiners to reopen dormant units.

Also were one so inclined you can pick up a new, non-self incinerating, Bolt for about 30K. Well under current average new car prices.
 

Brovane

Diamond Member
Dec 18, 2001
4,469
490
126
Their options are sort of limited. Not sure what existing existing authority any administration has to order refiners to reopen dormant units.

Also were one so inclined you can pick up a new, non-self incinerating, Bolt for about 30K. Well under current average new car prices.
Wouldn't it be the same authority that was used during COVID to increase PPE production?

For those of lower socio-economic status a new car is kind of out of reach for them. The Bolt is a great compact car. Hopefully with the lower price point GM can sell more of them.
 

gothuevos

Golden Member
Jul 28, 2010
1,222
948
136
Better late than never with this. The Biden Administration should have been acting on this back in March not June. Current fuel prices are having a significant impact on those of lower socio-economic status. Not everyone can go out and buy a $50k BEV. We are probably just one refinery fire away from significant supply disruption in fuel. We are close to having diesel shortages which is basically essential for transporting just about everything you see in store shelves. We could also be looking at shortages in DEF which would have a huge impact on shipping.
Bet there's a huge pressure campaign behind the scenes to get Zelensky to capitulate, at this point.

If not, then there will be, pretty soon I imagine.
 
  • Haha
Reactions: iRONic

K1052

Lifer
Aug 21, 2003
41,150
21,335
136
Wouldn't it be the same authority that was used during COVID to increase PPE production?
DPA'ing refined products has never been tried in this context AFAIK. Biden could order them to produce and they refuse it goes to court and gets hung up without any impact.
 

Brovane

Diamond Member
Dec 18, 2001
4,469
490
126
Bet there's a huge pressure campaign behind the scenes to get Zelensky to capitulate, at this point.

If not, then there will be, pretty soon I imagine.
I think that is more of a European thing(France and Germany) than pressure coming from the US for Zelensky to give in to Russian demands.
 

Brovane

Diamond Member
Dec 18, 2001
4,469
490
126
DPA'ing refined products has never been tried in this context AFAIK. Biden could order them to produce and they refuse it goes to court and gets hung up without any impact.
You asked under what existing authority, the Defense Production Act is that existing authority. The rest is just speculation as to what might happen if used.
 

K1052

Lifer
Aug 21, 2003
41,150
21,335
136
You asked under what existing authority, the Defense Production Act is that existing authority. The rest is just speculation as to what might happen if used.
I suppose I should have included a qualifier of "that are likely to be effective".
 

Zorba

Lifer
Oct 22, 1999
12,329
7,247
136
DPA'ing refined products has never been tried in this context AFAIK. Biden could order them to produce and they refuse it goes to court and gets hung up without any impact.
He could black list the companies from government business.
 

uclaLabrat

Diamond Member
Aug 2, 2007
5,275
2,254
136
The whole industry is protecting margin this time around no matter what it does to consumers. At these levels though there starts to be political risk to them because if the Rs take over and they also cannot get prices (limited existing leverage) down more extreme measures will end up on the table.
I think its getting pretty clear that the oil companies are flexing political leverage here; they can time their "maintenance" or slow-walk bringing refineries back up, reap the benefits to their margins and exact maximum political pressure on dems right before midterms so they can swing the balance of power towards the right, who will always cater to their demands, and minimize or slow-walk renewables into the market.

Its grey davis all over again.
 

SMOGZINN

Lifer
Jun 17, 2005
13,707
3,640
136
Their options are sort of limited. Not sure what existing existing authority any administration has to order refiners to reopen dormant units.
Almost none. What Biden should tweet is that he is having the DoE look into creating a national oil company to make sure that gas supply remains at acceptable levels. That would get them moving.
 

Fenixgoon

Lifer
Jun 30, 2003
29,806
6,741
136
You asked under what existing authority, the Defense Production Act is that existing authority. The rest is just speculation as to what might happen if used.
High gas prices don't exactly constitute an emergency.

At least with N95s and COVID there was an imminent public health threat and a clear lack of production capacity.

Where's the justification for invoking DPA?
 

uclaLabrat

Diamond Member
Aug 2, 2007
5,275
2,254
136
High gas prices don't exactly constitute an emergency.

At least with N95s and COVID there was an imminent public health threat and a clear lack of production capacity.

Where's the justification for invoking DPA?
Id argue stable petroleum supplies comprise a fairly sizable strategic risk, its the whole reason we have the strategic reserve.
 

ASK THE COMMUNITY