U.S. crude oil exports hit a record of 8.6 million barrels per day as the freight hauling industry faces the highest diesel prices at the pump in history.
Upwards of 3.3 million barrels per day leave Gulf Coast ports, where ports set a record during the second quarter of 2022. Over 95 percent of exported crude runs through Corpus Christi, Houston, Beaumont, Port Arthur, and Louisiana. Before the pandemic upended the economy, the U.S. had achieved energy independence, meaning the country produced enough crude to meet domestic demand.
After hitting 12.96 million barrels per day in 2019, the U.S. became a net oil exporter before demand slumped during the pandemic. Exporting Texas crude has been a standard industry practice because the premium oil can be used for wide-reaching products. So-called “dirty crude” from Russia and others is typically used for cheap products like truck axle grease.
One would anticipate the White House would intervene, given the crushing effect high truck diesel has on inflation. But resolving the rising price of truck and passenger vehicle fuel remains more complicated than import and export figures.
“Domestic refining capacity in the U.S. remains depressed compared to pre-Covid levels. So, it’s no surprise that government intervention to support crude supplies has resulted in an increase in exports of domestically produced light barrels,” Artem Abramov, head of shale research at Rystad Energy,” reportedly said.
The U.S. and EU ban on purchasing Russian oil have not necessarily changed the business model of companies that produce sweet crude. That oil sells at a premium on the global market, generating greater profits than it would if used for gasoline and truck diesel. America imports a great deal of dirty crude for such purposes. But even if the federal government inserted itself and mandated sweet Texas crude for truck diesel, Big Oil has no plans to expand or build new refineries. That’s largely because federal regulations have increased the cost, and energy policy is shifting away from fossil fuels.
“That the U.S. is now running up against a wall on refining capacity is indicative of a much more serious problem than the disturbances from the war in Ukraine or even the pandemic. Those disturbances are a big deal, and they are contributing to high gasoline and diesel prices, but they will ultimately prove temporary. But if there’s one energy problem that the U.S. should not have, it’s insufficient refinery capacity,” Dominic Pino stated in the National Review. “Investing in refining equipment is extremely expensive, and projects take many years to complete. It’s not smart business to put billions of dollars into refinery expansion” if the government policy will result in financial losses.
Although the record crude exports may give truck drivers pause, Big Oil is not necessarily doing anything out of the ordinary. America can return to energy independence, but that won’t cure the refining capacity issue.
Sources:
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M
https://www.nationalreview.com/corner/oil-refining-should-be-americas-strength/
Maybe the government should build a refinery seeing as it’s their fault that it’s not good business
But we are called conspiracy theoriests. The facts are so obvious, yet nothing is being done to change it.
You are also called ignorant and maybe stupid too.