Essay by Eric Worrall
Stock up now people. Alex Epstein makes the case that 2022’s desperate shortage of diesel heating fuel has been caused by Democrat hostility towards drilling and pipelines.
Our dangerous diesel shortage caused by anti-fossil-fuel politicians
The US is experiencing a dangerous shortage of diesel fuel. Blame our clueless anti-fossil-fuel politicians.
The US is experiencing a dangerous shortage of diesel fuel.
Blame our anti-fossil-fuel politicians, who:
- Prevented us from importing Canadian oil well-suited to our refineries
- Prevented or shut down diesel-producing capacity in the US
- Threatened new investments in diesel
- Diesel is the fuel of heavy-duty vehicles and is many Northeast homes’ source of heat. Prices are high and increasing because:
1) October inventories, which should have been high to prep for winter, were their lowest since records began in 1982.
2) Our ability to import diesel is uncertain.1Higher diesel prices mean higher prices for:
- agriculture, which uses diesel tractors and harvesters
- every physical product, which is transported by diesel trucks, trains, and cargo ships
- home heating, especially in the Northeast2
…
Read more: https://alexepstein.substack.com/p/our-dangerous-diesel-shortage-caused
Biden can make up all the excuses he wants, but Biden was the President who cancelled the Keystone pipeline.
I have seen suggestions that completing the Keystone pipeline would not have made much difference. But Keystone would have provided at least 700,000 barrels per day of crude oil to US refineries. Given the shortfall seems to be around 10,000,000 barrels, going by the graph at the top of the page, and even considering that not all that crude oil would have been converted into fuel oil, it seems plausible that a few months of Keystone flow could have brought supplies back up to the long term average.
The symbolism of the Keystone cancellation may have had a more significant impact on oil availability than the actual cancellation.
The dip in drilling activity is real.
The Covid lockdowns and resulting crash in petroleum demand during 2020-21 may have been a factor. But it was obvious by mid 2020 the lockdowns couldn’t continue forever.
So I would argue the Biden effect on drilling was far more significant that the transient Covid lockdown drop in demand.
I’m not alone in this view. Bloomberg, which usually supports President Biden, published an article last March which blames the lack of drilling activity on Democrat regulatory hostility.
Biden Wants U.S. Oil to Drill More. Here’s Why They’re Holding Back
- White House implores oil producers to pump more crude
- U.S. oil production remains below pre-pandemic levels
By Jennifer A Dlouhy, Jordan Fabian, and Kevin Crowley
11 March 2022, 22:00 GMT+10 Updated on
The war in Ukraine has touched off a feud between the White House and U.S. oil industry as many companies reap record profits from rising prices despite pumping less crude than before the pandemic, leaving American consumers beset by surging gasoline costs.
President Joe Biden has urged U.S. oil companies to step up production — but they are wary given his historic hostility toward fossil fuels and the risk that new drilling won’t pay off over the long term.
…
The Biden administration finds itself in the uncomfortable position of pleading with oil companies to boost crude production, despite its long-term goal of shifting the U.S. away from the fossil fuels that worsen climate change.
…
Read more: https://www.bloomberg.com/news/articles/2022-03-11/ukraine-war-puts-biden-and-u-s-oil-at-odds-on-domestic-drilling
President Biden has done plenty to discourage oil field development since he cancelled the Keystone pipeline, such as when he told the public a few days ago – “No more drilling”.
I feel sorry for people in the North East who may be in for a long, hard winter. But I guess there are only so many times you can scare the Golden Goose, before it flies away and nests somewhere else.
The Green house effect.
The White House effect.
I feel somewhat sorry for some of the people in the northeast, those that voted against politicians and policy that eliminates future installations of Gas Facilities for heating and cooking but we’re overruled by the Dim-O-Crats.
I feel sorry for the mentally challenged that voted for liars and con artists that convinced them that their sacrifice of freezing in the dark will save the planet.
To be honest, I don’t trust the voting machines here in New Hampshire. I saw no smiling faces on the street, after the last election. Things feel out of our control. What I’ve done is order eight cords of firewood. Also, I have a decent stock of dry rice and beans and tinned meats. I’ll survive the winter, but I worry about the more modern sort of person, who own no wood stove, and wouldn’t know what to do with it even if they had one.
Isn’t it amazing how almost all of the races that get delayed past election day itself, end up getting called for the Democrats.
The last of the contested senate races has been called for the Democrats. Surprise, surprise. When they “win” the seat in Georgia, they will have 51 seats and will be able to win, even without Manchin.
The Democrats have demonstrated that no matter how badly they mess up the country, their control of the media and the voting mechanism in most states guarantees that they will hold onto power.
If you thought things were bad the last two years, you haven’t seen anything yet.
The Gr$$n for the Big Guy in the Whitehouse Effect.
There is indeed a US ‘shortage’ of diesel and fuel oil, but the cause isn’t Biden’s clampdown on drilling. Diesel and fuel oil are very similar middle distillates. Fuel oil is slightly heavier and less consistent than diesel, Since the beginning of 2021, 6 older/smaller US refineries have closed permanently since uneconomic to upgrade to new EPA regs. That amounts to almost exactly 1 million barrels per day (about a fourth of which is middle distillate), or about 5% of US capacity. There has not (yet) been enough capacity enhancement in the bigger, newer refineries that can afford to meet the EPA requirements to offset the losses.
The bigger problem is the very high price of diesel and fuel oil. That is directly Biden’s responsibility. High diesel contributes to overall inflation. High fuel oil hits households directly. It will be a difficult winter in New England, for sure.
Might not be Biden’s clampdown on drilling, but it most certainly IS Biden’s clampdown on transport, refining, and investment in, fossil fuels.
The Democrats OWN this stupidity.
What clampdown on refining. Sure older and smaller refineries close, but thats been happening since the 80s. Largely the bigger refineries have been getting bigger to scale up
For various reasons theres a handful that arent operting, same as previously
4 in 2017 and 5 in 2022
The pandemic massive drop in demand has had most effect on daily capacity and its just now ramping up
Number and Capacity of Petroleum Refineries
https://www.eia.gov/dnav/pet/pet_pnp_cap1_dcu_nus_a.htm
Small business can’t afford the regulatory overhead.
Larger businesses can deal better with the crap.
Larger businesses have a competitive advantage.
Less competition allows/precipitates higher cost to consumer.
This in turn allows the Dems to promote and push more rules for ‘fairness’.
‘Clampdown’ may not be the best descriptor … a better phrasing might be ‘The Dems obvious desire to continue their advance of the continuous long roll-up of regulatory crap’ that lessens competition.
Rubbish. Retailers have been getting bigger , the big box stores have been getting bigger.
Its called capitalism which you seem to hate
Government regulation driving small companies out of business is capitalism?
Bigger more efficient companies buying out and closing or driving smaller companies out business is capitalism
They are not more efficient, they are just bigger and can afford to bribe the right politicians and retain the best lawyers.
BUT, what is happening here is not that. AND YOU KNOW THAT!
It is bigger GOVERNMRENT driving smaller refineries out of business by creating expensive regulations that cost a small company a much higher % of their operating expenses thus eating up their cash flow.
That’s true. However that is not what is happening.
What is happening is smaller companies going out of business because of the cost of regulations, and the bigger, better connected companies picking over the remains.
YES, CRONY Capitalism. What the pigs in the swamp throve on.
Duker LOVES crony capitalism.
US refinery capacity dropped about 1 mbpd in recent years.
US refining capacity falls to lowest mark in 8 years amid record prices: EIA | S&P Global Commodity Insights (spglobal.com)
And now its climbing back up , the cause was massive drop in demand during covid.- Which spanned 2 presidents not that either was deciding the scale back or the scale up.
Its capitalism
NO, this is Capacity. Just like when all the COAL plants were shut down under Obama and Reid, and torn down, that capacity cannot just be turned back on. The same with the small refineries. They are shut down and many demolished because the owners do not want the risk associated with the plants sitting idle.
I grew up with a refinery close t where I lived. It was on the York river in Virginia. It was built in WWII to supply the convoys to England. It was functioning all through the TRUMP! administration, but was finally shut down and DEMOLISHED the summer of 2021. That capacity will NEVER be brought back on line.
We’re being set up to import more fuels, which is particularly damaging to our energy security, as well as to their affordability.
Would China do anything differently than the Biden administration if they wanted to take us over without firing a shot?
Again , wrong
” U.S. oil production in 2023 will top 2019’s record 12.29 million bpd output.”
It’s not 2023 yet
Hold off on your wild guessing.
EIA statement of fact
“production in 2023”
“statement of fact”
I guess time travel is a thing now?
A projection is a statement of fact?
Your desperation to defend your boy in the White House is causing you to say some really weird things.
Likeminded-Hiveminded
I would rather shove hot needles under my fingernails than admit to believing Brandon mindedness
Refining capacity is down for the last three calendar years according to the eia link you provided above, Duker.
California is a trend setter, including many dubious trends, and its attack on refining within its borders is sending fuel prices higher.
Why are they now saying its heading back up.
Demand fell for the covid years thats why capacity fell
look at 2020, after the peak of 2019 , (Trump was President, not that had much to do with it) and why did it fall…..Trumps regulations?
We all know what happened when Humpty Truimpty ‘made Coal great again’… production fell like it had been doing because of changes to consumer demand.
next you will be saying saving small inefficient coal mines is a good thing
Never heard of “Inefficient Coal Mines”? What makes a Coal Mine efficient or inefficient??
Though both small and large scale highly inefficient Sun Mines and Wind Mines do exist.
Solar Panels mine energy from the sun
Wind turbines mine energy from Wind
Both are highly inefficient at transferring available solar and wind energy into useable electricity and highly incapable of powering a modern society.
There is a very small scale coal mine near where I vacation in Kane County Utah. It just opened in the last three years. It has no rail line near the mine so trucks the coal over 80 miles to the loading area. Yep, coal is dead.
Rud, what I am wondering about your comment is why the EPA put in place regulations, which considered carbon as a pollutant, and then 6 older/smaller US refineries closed, if it wasn’t for the risk analysis of not justifying adaptive technologies as a cost item against questionable future profits? Throw in the Biden administration obvious war against carbon (I watched the Brandon COP 27 speech this morning and now am in need of psychotherapy) and the risk element is off scale. The NE may freeze this winter? Good. Maybe the survivors won’t vote for idiots next time.
but those that don’t survive will continue to vote as they have in the past.
The firewood market here in New England is booming!
I predict they will rapidly burn through those supplies.
Loggers can produce a lot of wood in a hurry when the price is right- and now the price is very high. They’ll deliver much of it “truck length” rather than cut/split to keep the cost down. Of course the “new wood” won’t be seasoned- but there’s lots of seasoned wood on the ground and lots of standing dead trees in the forests of New England.
I’ve actually called both Green Mountain Power (GMP) and whomever is currently in charge of the voice system about the “Leaners” and “WidowMakers” aimed at the power/telco system lines.
Their response is generally “We don’t fix these things until they break the lines. Even though eventually they will.”
Ah yes. A business model that only someone with a government enforced monopoly power could sustain!
Do you replace light bulbs before or after they burn out?
When a fixture is dangling from the cieling and the wire shows damage to the insulation, do you replace it or just let it go because the bulb still works and the occasional spark is festive?
“…and the occasional spark is festive”
Solid gold right there!⚡⚡
Do you wait until your car runs out of petrol.. before putting more petrol in the tank ?
Do you wait until your brakes fail, before doing routine maintenance ?
Pillageidiot,
It would tidy up many a woodlot, if they did “burn through those supplies.” Back when I was younger there was always someone scooping up dead wood in the forest. You were supposed to ask the landowner for permission, but some fellows were basically wood poachers. Now there’s so much dead wood lying about it will make for one heck of a forest fire, if we get a drought like Maine got “The Year Maine Burned.” It seems smarter to use the wood for heat. But the problem is that some complain about the wood smoke, and sooner or later they’ll make wood stoves illegal, like they did in Denver. Then the only legal thing to do will be to freeze.
A major factor in small refinery closures is the renewable fuel standard (RFS), which requires refiners to prove that any gasoline or diesel they produce has been blended with a renewable feed stock, e.g., ethanol or bio-diesel, respectively. Proof, in this case, is obtained by submitting RIN certificates, which are created when fuels are blended at a distributor’s ‘rack’ before delivery. Since small refiners typically don’t own distribution outlets, they have to acquire RINs from large blenders in the ‘market’, which means they have to ‘pay up’. As a result, small refiners are at a distinct disadvantage, causing some of them to close or convert their facilities to making bio fuels.
This is what happens when the inmates are in charge of the Asylum.
Lets face facts .
The war on fossil fuels is going to hurt billions of the worlds population as winter takes hold in the northern hemisphere.
Those in charge will try to deflect criticism and say they were saving the world from over heating .
That excuse wont go down well with people freezing because of lack of heating fuel .
I don’t feel sorry for voters in the Northeast, not at all. They are co-conspirators in their crisis roadmap. The only question is what named thunderstorm will they unite under in the political push for bailout. Will it be “Third Street and Maple Storm” this time for the ad campaign slogan run by Sen. Schumer?
Although they’re in a clear minority, there are millions of voters there who voted against this lunacy. Not to mention innocent minors who can’t vote.
Their shortage and high prices is specifically because Russian tankers carry diesel dont arrive anymore
also because of you know …capitalism as prices do change as product takes the 20 days to travel the colonial pipeline from gulf area to NE
https://www.freightwaves.com/news/why-the-northeast-is-quietly-running-out-of-diesel
Plus the Gulf coast refineries can and do get ‘insane’ prices for shipping diesel abroad, instead of keeping home. Of course the Gulf refineries have always been involved in both importing crude and or exporting refined product
Backwardation also means that buying spot product, paying for storage and then selling futures to ‘hedge’ it locks in a loss, hence reluctance to build inventory.
Their shortage and high prices is specifically because Russian tankers carry diesel dont arrive anymore
Horse Hockey! During the last two years of Trump’s administration Texas alone produced more oil than Russia! That fact was posted right on this blog during that time.
Refined Diesel for the NE US states and Europe was a russian speciality
False claim that Texas produced more than Russia
Texas is actually behind number 2 and 3 , Russia and Saudi Arabia
You dont even need half a clue to know that US was first of course but the Texas part was only 4th globally
it was a single day claim, which is nonsense ( and you picked up on that)
“Texas was producing about 4.7 million barrels of oil a day in October 2018 – the time period referenced in the post. But that’s less than half of what Saudi Arabia produced at the time, according to the Energy Information Administration.”
And Russia was doing 10.8 mill barrels per day in 2018
I feel sorry for the voters in the northeast that don’t vote for the stupid democrats.
They suffer the same as the rest who didn’t vote for this shit, present company included.
“voters in the Northeast” are not a monolithic voting block. The further away from the big cities, the more likely that oil heating is common. Rural voters tend to vote for the politicians who are not openly trying to destroy their lives.
Rural, as in ‘where all the food comes from.’
Rural is outvoted by urban.
That is the tail wagging the dog…. if you look at maps of the US showing areas that vote red vs those that vote blue, the latter are utterly tiny and insignificant looking. An even better analogy might be a parasite that hijacks the brain of another organism, one that is thousands of times its size. The parasite, despite its diminutive proportions, forces its host to do its bidding, even when that bidding is deleterious or deadly to the host. Tiny blue parasites force the red hosts into destitution and enslavement, and if unchecked, these parasites will doom the entire organism (the US),
It’s true that most voters in the Northeast have supported the climatistas- but not all of us, so those opposed to it shouldn’t be punished- but we will. My bet is that fuel oil will be available but very expensive so the demand will decrease. A majority of rural home owners and even many dense neighborhoods have wood stoves. Here in Massachusetts, the green thing is now a certified official religion.
As a forester – I work with loggers- they’re all bitching about the cost rise in diesel fuel. As the cost works through the system and the price of wood goes up- the climatistas will complain about how loggers and sawmills are gouging them. They fail to see the consequences of shortages of fossil fuels.
I would like to see a recount in the Northeast. Hand-count the ballots and see if they match the numbers the “machine” spews out. You’d only need to double check ten or so precincts to “trust but verify.” Until that is done, I’ll have my sneaking suspicions that the way some politicians win elections is through a sort of pay-to-play deal with Dominion. Call me a bad loser or a conspiracy theorist if you will, but the best way to shoot a conspiracy theory down in flames is to do a recount, but that is the last thing the “winners” will ever dare do.
There’s also mail in ballots with absolutely no quality control to ensure that the people voting actually exist and were the ones who sent in the ballots.
There’s a reason why Democrats fight toot and nail against any attempts to improve the voting system.
Or to remove dead people, or people who have moved from the voting roles.
Once again the Jones Act deserves a share of the blame. Any diesel surplus that cannot be shipped inland from the USG refineries via the pipelines (primarily the Colonial) can only be moved economically by ship. The Jones Act ensures that it is very expensive to do if the destination is Boston Harbour, because it requires the use of US built, flagged and crewed vessels. Enjoy the tea party as New England bids against Europe and old England for non Russian, non seaborne US supplies. Meanwhile the USG surplus is being exported to Europe for lack of a viable alternative
I think the Jones Act is an economically destructive bit of legislation.
However, at some point the shipping rate arbitrage should be high enough that someone will build a few ‘Merican vessels that qualify.
(I hope. Or is it too risky, since their investment could be wiped out with the stroke of a pen by a feckless executive?)
Basically we are saying that if we make all the alternatives expensive enough, American based shipping will start looking attractive again.
Why not simply lower taxes until Jones Act compliant ships are competitive? Keeping taxes high clearly isn’t working.
Taxes? I would assume that it’s the higher cost of building in US ship yards and crew staffing.
An absence of energy policy ≠ a dearth of energy.
Alex is super- especially given how young he is. Most people his age are climatistas. I so much enjoyed a YouTube video from several years ago where Alex beat Bill McKibben to a pulp in a debate- mopping the floor with him. Alex should be watched carefully as a rising star in this climate battle- and in a few more years he should be encouraged to run for office.
The three main causes
Reduction of US refining capacity by about 1million bpd in the past few years
US cut imports of oil and fuel from Russia (500,000 bpd in 2021)
And sent some US diesel fuel to the EU
The Biden admin is mulling over the idea of curtailing exports. This will raise prices in the world market, which will raise prices in the US Northeast, because this market is marginally supplied by water-born cargos. Conversely, it will temporarily suppress prices in areas that are supplied by pipeline from USGC refiners, at least until the refiners cut crude runs in order to balance the reduction in demand for their production. Hopefully, even Biden isn’t this stupid.
He was and remains so.
Agree, but I’m hoping his wire-pullers are a tad smarter.
Frank from NoVA
November 11, 2022 4:38 pm
2Agree, but I’m hoping his wire-pullers are a tad smarter.”
Noted.
I remain unconvinced that ‘hope’ is a sound foundation for a national energy policy, to be honest.
Perhaps your horse will come in.
I have candles.
Auto
They are, Frank, and they’re getting exactly the end result they want.
Part of this may be a demand shift of diesel relative to gasoline. The average car is probably using less gas nowadays while the demand growth for diesel and jet fuel in the transportation sector has likely been much stronger than for gasoline. Refineries can only make so much diesel as presently configured. It also depends on crude type. The last refiner I worked for did all they could to maximize diesel yield. Part of this was construction of a hydrocracking unit to make renewable diesel from vegetable oil. As the federal subsidy was about $1/gallon for that stuff, it must be printing money in today’s economy.
True. Refineries are built based on a certain crude mix assumption, and are relatively inflexible thereafter. Light sweet means more gasoline and less middle distillate. Heavy sour means more middle distillate. So Biden cancelling KXL screwed all the built to expect it heavy sour refinery expansions. And now we pay the price twice.
Face facts: US energy policy is backwards from demand pressure. As long as that policy remains, shortages will occur. It’s not rocket science. In America, you get what you vote for.
In a Republic, you’re supposed to vote for representatives who are smart enough to determine what actions will result in the greater good.
Not possible when half of the population are apparently morons.
I feel sorry for people in the North East who may be in for a long, hard winter..
Ha! The new governor of PA just announced an end to all fracking in that state is coming. The site of the oldest oil well in the country is going to kill oil extraction in that state at a time when there is an obvious shortage.
Do I feel sorry for those in the NE? Hell no! The majority are going to get exactly what they have been voting for over the decades despite the warnings! For the rest? Move! A considerable number of leftists from NY and NJ bailed due to the conditions in those states and moved into PA but continue to vote as before. As far as I’m concerned we are watching Darwin’s theory of natural selection being put into action on a societal level.
Like other alleged shortages and alarms, I’ll believe it was bad after the fact. Beforehand, let’s not get carried away. That said, the recent election results suggest that New Yorkers and New Englanders will be getting just what they desire if serious shortages do ensue. A majority just volunteered to be crash test dummies.
Well this is gonna suck….
Better get those generators fueled up and checked.
The wood pile topped off.
and plenty of food.
It’s gonna be a long winter.
This trucker already has his under armor and extreme cold weather gear at the ready. And yes, it is going to be a long winter. Heck I drove through a few flurries a couple weeks ago coming back from the Chicago area on I-65! Winter is arriving here at my Central Indiana home much earlier than it has over the last several years. It’s looking like a White Christmas may be in the cards for us this year.
I’m about 90 miles north of you in FW; it sure looks like we’re in for a White Thanksgiving…
It turned out to all snow down here in the Anderson area. I have 2″ on my deck and it still coming down, though tapering off a bit. The fireplace insert is doing it’s thing. Looks more and more like I made a good investment.
It is currently 31 deg. F at my Indiana home and it looks like we’re most likely in for a wintery mix of precip. The new fireplace insert will be in use today. I am waiting for the wife to wake to fire it up to instruct her on lighting a fire using lighter knot/fat wood and on how to properly regulate the fire.
The threat of higher heating bills for the northeastern US hasn’t materialized yet, but the howls of protest are likely to intensify as the weather turns colder. As well, if other parts of North America experience the same shortages and attendant higher prices, the complaints are likely to become deafening. Yet, this may be a blessing in disguise since they will provide additional proof that renewables are nowhere near capable to filling any energy gaps.
Now now, renewables are fully capable of meeting 100% of energy demands.
Either at Noon on Tuesday Septober 32nd or
By the elimination of more than 90% of the population to decrease demand
The US military belongs to the US Congress. The President is Commander in Chief of the Congress’ armed forces. Congress routinely buys ship and jets its military did not request but needs. Congress needs to purchase massive quantities of domestically made, pristine clean, coal-based diesel for its military, AKA The World’s Number 1 Consumer of Diesel. Put out a bid, select one or more contractors, place the order. Get diesel back under $4 per gallon!