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U.S. Diesel Supplies Running on Fumes as Inventories Hit Record Lows

U.S. Diesel Supplies Running on Fumes as Inventories Hit Record Lows

Of course, instead of gas exploration, Biden exploring release of diesel fuel reserves.

As we head into the summer season, a new crisis looms on the horizon related to the nation’s supply chain.

Diesel fuel, which powers many essential supply vehicles (e.g., trucks, boats, and trains) and farm equipment, is in short supply.

According to the American Automobile Association (AAA), a gallon of diesel is $5.554, up 75 percent from a year ago. This is just short of the record high of $5.58 that was posted last week. Prices are even higher in the northeast. In New York, the average price of diesel is $6.515. In Rhode Island, it is $6.43.

East coast diesel inventories have plunged to their lowest levels in more than 30 years. Nationally, stockpiles are at a 17-year low.

This could prove devastating for the post-pandemic recovery since it is a crucial component of the economy as it fuels everything from farming machinery to construction equipment to cargo ships

The East Coast of the U.S. is reporting its lowest seasonal diesel inventory on record. Part of the looming shortage is the closure of refineries for diesel fuel.

The reason for so many closures? Regulations, of course.

In the past 15 years, the number of refineries on the U.S. East Coast has halved to just seven. The closures have reduced the region’s oil processing capacity to just 818,000 barrels per day, down from 1.64 million barrels per day in 2009. Regional oil demand, however, is stronger.

Rory Johnston, a managing director at Toronto-based research firm Price Street and writer of the newsletter Commodity Context, told FreightWaves that refining is a “thankless industry,” with intense regulations that have limited the opening of new refineries. The Great Recession of 2008 led to several East Coast refineries shuttering, but there have been more recent shutdowns too. One major Philadelphia refinery shuttered in 2019 after a giant fire (and it already had declared bankruptcy), and another refinery in Newfoundland shut down in 2020.

Daryl Dozar, who has been a truck driver for 15 years, explains the realities of the shortage.

“A company got a variety of trucks, so they have a bigger budget. An owner-op everything, insurance, fuel, anything you do with your truck you gotta pay out of pocket, so it’s really hard on an owner-op, it really is,” said Dozar.

The truckers feel prices and a potential fuel shortage will not only impact them, but the general public as well.

Meanwhile, the Biden administration is scrambling to put a band-aid on the problem. Instead of putting a leash on green justice bureaucrats, it plans to renew Chevron’s license to operate in the economic hellscape of Venezuela.

The last U.S. energy producer in Venezuela asked President Joe Biden’s government in March for a license that would allow it a greater say in its joint ventures with Venezuela’s state-run PDVSA, a first step to reviving output and controlling where oil is sent.

In a reversal of earlier hopes for a broadly expanded authorization, however, the license now is expected to be renewed as-is or returned to some of the terms it had in 2020, which did not limit Chevron’s drilling, processing or shipping oil from Venezuela, according to the people. A final decision has not yet been made, one person familiar with the matter said.

Washington last week gave Chevron what it called a “narrow” authorization through November to engage in talks with President Nicolas Maduro’s government on future activities.

Next, the Biden administration is considering a release of diesel fuel from federal reserves.

Officials have drafted an emergency declaration as prices have soared to record highs in recent weeks, White House spokeswoman Emilie Simons said on Twitter on Monday. Such a declaration would allow for the quick release of some of the 1 million barrels of diesel in the Northeast Home Heating Oil Reserve “if necessary,” she said.

“We’re closely monitoring challenges to diesel supply and prices as a result of Putin’s invasion,” she said, referring to the Russian war in Ukraine that has roiled global energy markets. “This would bridge short-term supply shortfalls.”

You may be wondering how Department of Transportation Secretary Pete Buttigieg is trying to address this problem. The usual way: By heading out of town for an elite conference at a beautiful location to give a speech.

U.S. Transportation Secretary Pete Buttigieg will attend the Mackinac Policy Conference on Mackinac Island next week, Gov. Gretchen Whitmer’s office announced Wednesday.

Buttigieg will give a keynote address June 1 at the annual political confab and hold a press conference with Whitmer later that day.

“Michigan is a great place to talk transportation — it’s home to many of the world’s great car manufacturers and a governor who has been a nation-leader on ‘fixing the damn roads,’” said Buttigieg said in a statement, referencing one of Whitmer’s 2018 campaign refrains.

I suspect the Biden administration’s approach to the upcoming diesel fuel shortage will simply be the next in a continuing catalog of failure.

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Comments

Are they trying to kill us? Seriously, I can’t think of a better way to do that. And we just follow them blindly to the cliff.

    Dathurtz in reply to JoAnne. | May 27, 2022 at 11:05 pm

    Yes, they are. People have been saying it for a long time, but “respectable” people just dismiss them.

Real nice that the pedophile-in-chief was taking oil from our strategic reserves and shipping it off to Europe, so that was a complete waste. This is the consequence of putting a dementia-ridden, retarded pedophile illegitimately into the oval office.

The Gentle Grizzly | May 27, 2022 at 3:29 pm

I want to know how a president, ANY president, can turn leases and pipelines on and off on a whim.

It’s important to remember that food prices generally move together with diesel prices. Diesel is one of a farmer’s biggest expenses in producing food, and then diesel trucks are used to move it to processing and market.

So when Biden makes diesel more expensive (to “Save the Planet” or some such BS), that action makes food more expensive as well.

“Diesel supplies running on fumes..”

Our whole country is running on fumes. This once great nation is being run by a dementia riddled man whose withered brain is running on fumes and sputtering like it’s about to give out at any moment.

“It’s important to remember that food prices generally move together with diesel prices”
******
Recently read that about 70% of the cost of food is related to fuel/energy cost. Starts out with mining of phosphate and potash, Natural gas for production of nitrogen fertilizers, diesel for farm equipment, then truck, rail transportation, electrical production for processing/storage, etc., etc.,etc.

Wait until there are food riots in urban areas of America, especially blue ones.

    audax in reply to Whitewall. | May 28, 2022 at 5:38 am

    Those “blue” areas…..well they voted for it and they’re gonna get it, get it good and hard.

    #FJB <-- Disco Stu_ in reply to Whitewall. | May 28, 2022 at 8:41 am

    Mass starvation in Africa to come along first.

    The reports of which won’t be able to be ignored by the clueless feel-goodz who “think” they’re supposed to support the dangerous greenie-leftists.

    Oh yeah, nor the idiot TV people, either.

nordic_prince | May 27, 2022 at 4:17 pm

As much as I loathe Biden, we need to remember he is but a puppet. He never was an original thinker, but his dementia makes that all the more obvious. Getting rid of him is like cutting the strings off the marionette and swapping out wooden dummies.

We need to find out who the puppet master is and neuter him/her/it. Cut the head off the snake and then the fangs are irrelevant.

    Peabody in reply to nordic_prince. | May 27, 2022 at 4:29 pm

    It’s probably not just one person, It’s probably a group of two or three people with some others giving input. And it’s more than likely done through a intermediaries so there is plausible deniability.

      txvet2 in reply to Peabody. | May 27, 2022 at 4:34 pm

      I think you’d be closer if you said it is the entire controlling element of the Democrat Party. Those that aren’t directly making the decisions are fully engaged in implementing them. Biden is a cypher and a joke. I doubt anybody in the actual government pays any attention to him at all.

    gonzotx in reply to nordic_prince. | May 27, 2022 at 4:51 pm

    Davis, Schwabs of the world, they are gloating about it just this week.

Autocorrect it was D.A.V.O.S

At Davis it wa stated that during Covid, a billionaire was made every 30 minutes

Think about that, they funneled the wealth to a very few, 10,000’s compared to billions of people and they are swimming in filthy money, our money

There has to be a reconning…

Dang autocorrect does not like the word D.A.V.V.O.S

Either do I

The shortages aren’t just due to regulations. Many East Coast refineries have shut down, because of their age and their processes and costs aren’t competitive. As the nation globalized, inefficient operations teetered on bankruptcy. The East Coast refineries were stuck in a market with drooping demand and stiff global competition. Many closed down for good. But, as with all global supply chains, shortages result when there are kinks in the supply chain that extends across the globe. It doesn’t take much to disrupt those precarious supply chains.. That’s what we are seeing.

    randian in reply to ruralguy. | May 27, 2022 at 10:34 pm

    The problem is that they should have been replaced, not shut down, but the EPA is basically not issuing permits for new or replacement refining capacity.

Suddenly those icky refineries seem more important. Perhaps a solution would be to require some refining capacity in every CD?

That serves several purposes:
1. Abundant refinery capacity
2. Elimination of some communities NIMBY preference to outsource the downsides of refineries while enjoying the benefits

It’s increasingly difficult to think all of what’s taken place since Joe has taken the oaf of office is deliberate. That “they” are purposefully destroying our country.

MoeHowardwasright | May 27, 2022 at 8:10 pm

See baby formula for how this will play out 🤬🤬🤬

I wonder if those “81 million” Biden voters are still upset about old Trump’s tweets?

John Sullivan | May 27, 2022 at 9:25 pm

Wait until winter. The price of heating oil moves with the price of diesel, as they are similarly refined. Homeowners and city business owners will be paying $7/gallon by Christmas. A modest 200 gallons per month means $1400 per month to heat your home.

LibraryGryffon | May 27, 2022 at 10:14 pm

I had a customer yesterday tell me that this fuel shortage/price rises was set up by Trump who worked together with Putin and some Saudi prince in late 2020 to screw us all and make lots of money for Russia and S.A.

There is no way to get through to someone who can think that way. Thankfully it seems to be a minority, but still way too many.

    healthguyfsu in reply to LibraryGryffon. | May 27, 2022 at 10:30 pm

    I hope you laughed so hard that you spit your drink in their face.

    That’s some major league spin rate right there.

      LibraryGryffon in reply to healthguyfsu. | May 28, 2022 at 12:40 pm

      I was working too hard to keep my customer service face. He also told me that Biden is doing a fantastically good job.

      There’s no point even trying with that level of delusion.

“Failure” implies error. There’s not a chance in the world that this administration’s actions come from accident or ignorance.

    #FJB <-- Disco Stu_ in reply to randian. | May 28, 2022 at 8:56 am

    All rationally-predictable consequences of:

    dangerous leftist theories & policies,
    + unaccountable central government control,
    + common govt.-employee incompetence.

Be prepared for supply disruptions.

Tank up with an extra gallon of gasoline after the nozzle automatically clicks off. There is extra capacity in every tank but you don’t want to pack it full. Leave some room for expansion.

Stock up with staples. Sam’s and Costco are willing to be your friends.

If you don’t know much about cooking, you might want to learn. The local grocery may run low on those convenient nukables.
.

If Biden has troubles now wait until the country shuts down for lack of diesel fuel.

My diesel costs for my Semi have risen $50,000 yr since Brandon was installed as Maximum Leader. Nothing he is doing will help anything and his Administration doesn’t want to. Granholm made it clear when she was asked about the rising fuel prices. After giggling she said high prices would move people more quickly to electric cars. How the power for these cars would be generated she didn’t explain

Though written in 2021 and pertaining to Australia I am sure the scenario applies equally to the U.S. in 2022. The shortage of urea is leading to a domino effect which because of the shortage disrupts supplies of diesel exhaust fluid. Diesel engines in the U.S. can’t operate without this additive.

https://www.theguardian.com/australia-news/2021/dec/08/what-is-urea-and-why-does-a-worldwide-shortage-threaten-australias-supply-chain

At this failure rate, POS Biden is past running on fumes, he is entering “vapor lock” terrority!

I don’t understand. Why aren’t all those Democrat-controlled areas just switching to electric or (even better) bicycles?

/s

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