Why are gas prices so high? It’s the oil refineries stupid!
“I’m doing everything in my power to blunt [Russian President Vladimir] Putin’s gas price hike. We’re going to work to bring down gas and food prices. We can save families money and other items.” − Joseph Robinette Biden Jr., June, 2022
“Half the Democrat leaders want to end the use of gasoline. Did you think that was not going to lead to a run up in prices as supply of the fuel dwindled? We are getting a taste of the absurd Green New Deal future a bit early. Enjoy!” − beerontap comment to Washington Post article on gasoline prices.
Today American’s are seeing the highest gasoline prices in their lifetimes at over $5.00 a gallon on average.
QUESTION: Why is this happening?
ANSWER: It’s the oil refineries stupid!
In 1982 there were over 250 operating crude oil refineries in the United States; that number declined to 132 by 2019.
As of January 1, 2021, there were 129 operable petroleum refineries in the United States a decline of 3 since 2019.
According to Zehl & Associates five of America’s ten largest oil refineries are located along the coastline of the Gulf of Mexico.
- #1: Motiva Port Arthur Manufacturing Complex, Texas.
- #2: Marathon Galveston Bay Refinery, Texas.
- #3: Marathon Garyville Refinery, Louisiana.
- #4: ExxonMobil Baytown Complex, Texas.
- #5: ExxonMobil Baton Rouge Refinery, Louisiana.
NOTE: If a major hurricane hits the Texas and Louisiana coastline then these refineries will shut down.
The remaining six of the top ten are:
- #6: BP Whiting Refinery, Indiana
- #7: CITGO Lake Charles Refinery, Louisiana
- #8: ExxonMobil Beaumont Complex, Texas
- #9: Marathon Los Angeles (Carson) Refinery, California
- #10: Chevron Pascagoula Refinery, Mississippi
These 10 refining facilities alone can process 2.6 million barrels of crude oil per calendar day. Texas, home to four of the ten largest refineries in the United States – including Corpus Christi, Port Arthur, and Beaumont, – accounts for more than 87% of total production in the state of Texas and more than a quarter of the nation’s total production.
CLICK HERE TO VIEW THE OIL PRODUCTION AND IMPORTS 2019 TO 2022 CHART
Texas has 47 operating refineries, Louisiana with 19, California has 18 and Florida has no refineries. The EPA estimated that Florida in 2020 used a total of 193,841,000 barrels of motor gasoline at a cost of $16,280,500,000.
The U.S. Energy Administration (USEA) has a chart showing the Number and Capacity of Petroleum Refineries. According to the USEA here are the operable barrels per calendar day (BCD) by year:
- 2016 – 18,317,036 BCD
- 2017 – 18,617,027 BCD
- 2018 – 18,598,497 BCD
- 2019 – 18,802,435 BCD
- 2020 – 18,976,085 BCD
- 2021 – 18,127,700 BCD
Note that under President Donald J. Trump the production of oil increased during his term by 658,049 BCD. Also note that since the inauguration of Joseph Robinette Biden Jr. the production of oil has dropped 848,385 BCD during the first year of his presidency.
According to June 19th, 2022 OpenTheWord.org article by Dean Smith eleven U.S. gas refineries closed over the past 2 years. Dean Smith reported,
In a recent interview with Fox Business, American Petroleum Institute President Mike Sommers stated that 11 US gas refineries closed over the past two years. Those that remain are running at 94% capacity.
The reasons for those closures are due primarily to governments.
US governments accomplished this through various methods, including increasingly restrictive environmental regulations.
[ … ]
In other words, governments and/or the green agenda are the primary reason for the expensive gas.
Fewer refineries, less production, higher prices, environmental regulations, government, the green agenda and perverse incentives are all causing our higher and higher gasoline and diesel prices.
NOTE: President Richard Nixon signed an Executive Order which established the Environmental Protection Agency (EPA) on December 2nd, 1970.
The Bottom Line
Biden has blamed everyone and everything but himself for the highest average price of gasoline in our history. Biden and Democrats, like Elizabeth Warren, have blamed the rise in prices on “greedflation.” You know those evil companies are gouging their customers by raising prices to make more money. However, this is a myth. The Foundation for Economic Education’s Brad Polumbo looked at two metrics, the Consumer Price Index (CPI) and the latest Producer Price Index (PPI). Polumbo reported,
Well, if companies were truly being greedy and just jacking up prices to make money, we would expect them to be hiking prices for consumers at a rate higher than their own production costs are going up. But these data sets actually reveal the opposite: consumer prices rose 8.6% while producer prices rose 10.8%—suggesting that, roughly estimating, companies haven’t jacked up prices to even fully match the increase in their costs, let alone exceed them.
So oil companies are not raising prices even though their producer costs have risen.
CLAIM: Biden on Wednesday, June 15th, 2022 accused US oil companies of making excessive profits. He ordered them to “take immediate actions to increase the supply” of gasoline and diesel fuels.
REALITY: Biden’s own policies have disrupted energy markets. The American Petroleum Institute issued a list of 10 steps Biden could take to reduce supply disruptions, including ending obstruction of permitting on natural gas projects, lifting development restrictions on federal lands and waters and ending Trump-era steel tariffs.
What we can say is that our American refineries are handling significantly lower numbers of barrels per calendar day since Biden entered the White House.
Why? Because America is producing fewer barrels per calendar day of oil.
The Epoch Times’ reporter Jack Phillips on Tuesday, June 14, 2022 wrote:
Chevron CEO Mike Wirth said in a recent interview that he does not believe another oil refinery will be built again in the United States, saying that government policies are a key reason why, as average gas prices continue to rise as of Tuesday.
One hundred and twenty-one fewer refineries since 1982, dropping production of barrels of oil per day since Biden took office and no more new oil refineries due to government policies are in fact the “key reasons” why we have the highest gas prices ever in the U.S.
It’s the oil refineries stupid!
We report, you decide who is at fault.
©Dr. Rich Swier. All rights reserved.
EDITORS NOTE: Add to this the warning that the American electrical grid will almost certainly die… from natural causes. In a Center for Security Policy article titled For the cost of less than 1% of the Biden infrastructure bill we could protect our electric grid from certain collapse Tommy Waller Director of Infrastructure Security wrote:
Most Americans regard the sun as a positive source of energy for the planet – nurturing plant life and powering solar panels to help provide the electricity we need to sustain modern civilization. And while we know that we must be protected from the harmful UV rays the sun produces, which cause injury such as sunburn and skin cancer, most don’t realize that the sun can produce even more powerful effects, damaging infrastructure both in space and on earth.
Unless America takes action to protect against the hazard of solar weather, it is nearly certain that we will suffer a catastrophic loss of our electric grid sometime in the future. The Center for Security Policy’s Director of Infrastructure Security Tommy Waller recently testified before the Secretary of Energy Advisory Board (SEAB) to explain why, and what must be done about it.
Watch the June 2022 Secretary of Energy Advisory Board meeting to understand.
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Beijing Joe Biden, “Pocahontas” Liz Warren and their ilk have no business mentioning “greedflation” as reason for ever increasing gas and diesel prices or the 8.6% and growing inflation we’re experiencing. Both are rich because of their personal corruption and the corruption of their Marxist government policies.
They could care less about the large group of folks at heart of our country and those are the hard working, God, family and country loving middle class whose savings and purchasing power are rapidly going down.
Their slogan should be same as Hitler’s Propaganda Minister Joseph Goebbels which was to “Accuse the other side of that which you are guilty”.