Mike Pence–remember him? The guy Trump wanted hanged by the neck until dead?–tweeted his faux anger that the Biden Administration had canceled the sale of drilling licenses for areas in Alaska and the Gulf of Mexico. “Unleash American Energy Joe!” he tweeted without regard for punctuation, which Republicans apparently think is too “Democrat” now.
The problem with the current market is multi-fold–from the greed of the oil companies to maintain their profit percentage to refineries switching over to summer blends to a sharp increase in demand–but the issue has never been a lack of crude oil.
American refineries ran at around 90% utilization last week, the eighth straight week they were running at or above 90%. That’s not good. With a maximum capacity of 18 million barrels per day, US refineries need to periodically have downtime to conduct maintenance, updates, repairs and formulation changeovers. Except for scattered spikes, US refinery capacity typically runs in the low-80s.
The US doesn’t need more drilling; it needs more refining capacity. For all the talk about the Keystone pipeline being the savior for American power–it won’t be, for a number of reason, the main one being the oil in the pipeline doesn’t belong to the US–the US has steadily been producing more oil since the end of Trump’s pandemic economic collapse. In short: we’ve got oil.
Of the US’s 129 refineries, five were built in the last decade, all with middling capacities of less than 50,000 barrels per day. The last major refinery that could handle more than 50,000 bbl/day? The 45-year-old, 200,000 bbl/day Marathon refinery in Garyville, Louisiana.
(Another fun little bit of data: the US uses oil at the rate of 19.78 million bbl/day, but we can only refine 18 million barrels per day. So when Red Hats babble on about the myth that the US was “energy independent under Trump,” that’s a little factoid that they can rattle around in their skulls.)
The answer to America’s fossil energy problem isn’t more drilling. It’s more refining, and not little dinky refineries, but ones with significant capacity. But to solve America’s energy question, we need to move away from fossil fuels to stop the uncertainty of production capacity.