The United States hasn't seen a major new refinery built since the 1970s. "You're talking about a lot of money to get these refineries that are idled up and running.when I'm being told five years from now, we hope you don't exist," Cinquegrana says. Cinquegrana from Oil Price Information Service says that from the refiners' perspective, it doesn't make financial sense to invest in additional oil refining given the broader transition. It would take months to bring the refineries back online, and it would be costly for the refiners. (Photo by George Frey/Getty Images)Īs for turning back on idled refineries, that's not a quick fix either. Take five oil change prices driver#SALT LAKE CITY, UT - MAY 24: A driver unloads raw crude oil from his tanker to process into gas at Marathon Refinery on in Salt Lake City, Utah. They're operating above 90% capacity according to the Energy Information Administration, and expected to run at 95% for the rest of the summer. refineries are already going gangbusters right now. So who cares about refined products? Well, it turns out a lot of people need refined products," says Blanch. "The narrative until today was that we were going to be driving electric vehicles by the end of the year. It's no surprise that this is raising eyebrows, given the president's stated goals on an energy transition and also his promise to voters on the campaign trail that he would "end fossil fuels."įrancisco Blanch, head of commodities research at Bank of America, points out that the country is still heavily reliant on gasoline despite those goals. The president urged oil executives to increase the supply of gasoline and other refined products, and to drill for more oil in a bid to bring gas prices down. "At a time of war, refinery profit margins well above normal being passed directly onto American families are not acceptable," the president wrote in a letter to the heads of seven oil companies earlier this month. PETALUMA, CALIFORNIA - MAY 18: A customer pumps gas into their car at a gas station on in Petaluma, California. That's left the country unable to meet its fuel needs as more people are commuting, traveling and driving as they emerge from the throes of the pandemic. is about a million barrels a day below what it was prior to the pandemic. Refiners turn crude oil into usable products like gasoline, diesel, and jet fuel. Prices have edged down by a few cents in recent days, but remain elevated.Įxacerbating these high gas prices is a huge shortage in refining capacity in the U.S., which isn't likely to be resolved any time soon. The national average price of gasoline surpassed $5 a gallon for the first time ever this month. Gas prices started skyrocketing following a raft of sanctions on Russian oil, after its invasion of Ukraine in February. The president earlier this month singled out ExxonMobil, saying the company "made more money than God this year." President Biden and Big Oil are at each other's throats.Īt a time when gas prices are at the highest level in history, hurting regular Americans, he points out that Big Oil companies are enjoying record profits.
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