More refineries expected to close as pandemic cuts gasoline demand

[Elderberry]

Houston Chronicle by  James Osborne Nov. 10, 2020

More refinery closures are expected in the months and years ahead, as the coronavirus pandemic cuts global demand for gasoline and other fuels.

The research firm IHS Markit is predicting that more than 3 million barrels a day of refining capacity will shut down due to the pandemic - the equivalent of 3 percent of global capacity.

"A refining industry that was intended to accommodate a certain level of global demand must now contend with what is expected to be a significantly lower amount of it," said Rob Smith, director of IHS Markit. "Rationalization that would have been spread out over the coming decade will now be compressed within the next few years."

More: https://www.houstonchronicle.com/business/energy/article/More-refinery-closures-coming-due-to-COVID-15715589.php

[Joe Wooten]

As long as they mothball the closed facilities and do not tear them down, it will be ok.

[catfish1957]

Really surprised we are not seeing more <100,000 bbl/d refineries closing.  Maybe they are waiting to see how the senate races pan out in January.

[catfish1957]

As long as they mothball the closed facilities and do not tear them down, it will be ok.

3 years used to be the old rule of thumb where you have diminishing returns vs the headaches of restarting units that have dealt with corrosion and other infrastucture concerns.  COVID demand is one thing, but federally mandated NGD restrictions are another.

Here is the best I could find of an inventory of U.S. refineries.  https://inflationdata.com/articles/oil-refineries-united-states/

I did not realize how many small ones that are still out there in operation.  I fear for their viability, even in the short term.

[IsailedawayfromFR]

A number of refineries have been operating at a loss, mostly due to lack of upgrading for changing feedstock  or refined stock, or possibly environmental conditions.

I agree with @Joe Wooten , it is fine and actually preferably to idle outdated refineries during a cyclically weak industrial time such as exists now.

[Sighlass]

Always bugged me, when gas prices got low enough some GOP state suddenly wanted to pass higher gas taxes to balance the budget (due to high welfare costs of illegals).... Slowly phase in the 2 cents per year and nobody will notice anything. Traitors (yes it happened in my state where the GOP governor even went so far as to vet incoming state representatives that if they didn't support gas hikes they didn't receive funding for campaigns).