The United States currently has the lowest number of functioning refineries capable of producing gasoline, diesel, and jet fuel that we’ve seen since 2016, largely as a result of government policies. 

Since June 2019, 1.482 MMb/d of refining capacity has been rationalized in the United States and Canada. Approximately 590,000 b/d was damaged in storms or refinery incidents and is not eligible for quick restart. Another 237,000 b/d was shut to convert to renewable diesel production. Approximately 375,000 b/d may be eligible for recommissioning but likely will remain shut. The cost of recommissioning could be significant, and the timing of the recommissioning is likely too late within the current window of opportunity.

General market sentiment, our medium-term outlook included, is that the current high-margin environment will be fleeting. Recouping recommissioning costs will be difficult unless these strong margins are sustained beyond 2023. Refiners are unlikely to invest hundreds of millions of dollars in recommissioning costs for only one or two years of strong returns.

Bottom line,  the Oil and Gas industry doesn’t trust Biden, the Democrats or the Federal Bureaucracies.

The Government is seen as moving forward with a forced conversion to Electric only, but is only putting money into unreliable and expensive Green generating infrastructure.   And they’re not building enough to power the conversion to EV or home heating.

It’s them or us people, them or us.