re: WSJ: Banning Diesel Exports a bad idea

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Diesel would pile up in Gulf Coast storage, prompting refineries to reduce run rates. That would lower the production of gasoline and jet fuel, whose prices would rise.

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I retired from an oil company and worked in refineries for over 30 years. The article quote is incorrect. We basically ran two modes. We ran gasoline mode during the months like summer to maximize the amount of gasoline during peak vacation driving season. This came at the expense of diesel and heating oil production. In the winter months when people drive less, we ran distillate mode to produce more diesel and heating oil, which resulted in less gasoline production. If there is a surplus of diesel, refineries will increase the conversion rates in the Fluidized Catalytic Crackers to reduce diesel production and increase gasoline yields, which should make more gasoline available.

Edit - the down voters have obviously never been responsible for running gasoline pool models for a refinery like I did for part of my career.

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Energy Secretary Chris Wright, Treasury Secretary Scott Bessent and Interior Secretary Doug Burgum have protested the idea of a total ban, people familiar with the internal discussions said.

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Meh......don't worry, though, those guys are all idiots who know nothing.

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Chris Wright fixing to get his arse fired and replaced by some energy-ignorant arse kisser.

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Yep.

This is a move out of politicial expediency, damn the longterm consequences.

4 times further away from the ME than Alaska just to help retards out a bit

Correct

> complains about diesel prices

> something is done to help diesel prices

> complains about doing something to help diesel prices


Literally complaining about everything.

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> complains about diesel prices

> something is done to help diesel prices

> complains about doing something to help diesel prices


Literally complaining about everything.

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My last post had perfect timing

We are days away from dementia Trump installing the Great Leap Forward

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Are you retarded?

I’m shocked (not really) that so many on this board think that this is a good idea.

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This is the sort of response people have when they know they can't argue the point logically.

Wright has probably been his best hire after Suzie.

From my post in the other thread:

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TL;DR version - All of this would mean a quick drop in diesel prices domestically, but then spikes on the East and West Coasts. As we import a lot of our goods, the jump in international diesel prices would mean an increase on the prices of imports across the board, likely being greater than any savings we saw from increasing the domestic supply of diesel.

For the more in-depth explanation...

The East Coast (PADD 1) has to bring in ~80%-85% of its diesel from outside its region. While the majority of that comes from domestic transport, around 20% of it comes from international sources because those domestic transport avenues run around 100% capacity 24/7/365 (looking at you, Colonial). This is not only from lack of expanding transport paths (new pipelines, expanding refineries, etc) but the actual shrinking of them because of green politics.

We could just run more tanker ships, but then that runs into problems from The Jones Act. The tl;dr on it is that it mandates that any cargo shipped between two U.S. ports must be carried on ships that are built, owned, flagged, and crewed by U.S. citizens. The problem here is there is such a shortage of qualified ships and crew that it's already cheaper for PADD 1 to have imports come in via tanker from Europe than it is for it to come via tankers from PADD 3 (the Gulf Coast).

PADD 5, the West Coast, imports roughly 60%-65% of its crude oil from the international market (read: Northern Asia and the Middle East) because there are only a couple of very small (relative to demand) pipelines which run from any other PADD to PADD 5. Calling the output from those pipelines "a trickle" could be considered an exaggeration. In essence, PADD 5 is a fuel island. Some of this is green politics, some of this is the reality of the logistical headaches of running pipelines through the Rockies.

As an interesting footnote, Arizona is in a unique position where part of it is fed by the extreme end of PADD 3 (from Texas) while the other part is fed from the extreme end of PADD 5 (California). A diesel ban would likely isolate much of that state as demand from the other, larger states would take precedent.

The US produces ~20% of the diesel on the international market. Suddenly removing that from global trade is going to seriously frick a lot of countries to the point where they will gladly frick us back on the cost to us to import diesel from them under waivers, the cost of increased imports of goods (because those are going to rise and we import a shitload of goods) or both.

To look at a different aspect, ~50% of US storage for finished diesel is in PADD 3. We would see a quick drop in prices domestically but all of the other regions would see those prices spike back up shortly thereafter due to the lack of available storage and that so much of that transport and storage infrastructure is currently maxed or nearly so that we have to rely on crude imports for certain regions.

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