America’s Largest Oil Refineries Are Going Dark Amid Cold

Motiva, Exxon, Marathon halt curb fuel production in the state Over 3 million barrels of capacity hit; gasoline futures jump

Motiva Enterprises refinery

After creating havoc in the power and natural gas markets, the next commodity sector causing concern in Texas is the state’s enormous oil refining industry, where installations are being forced offline by the big freeze.

The largest refineries in North America were shutting down Monday because of arctic conditions that have cut electricity, water and fuel supplies across Texas. More than 3 million barrels of daily oil-processing capacity has been idled in the wake of the record-setting cold, according to consultant Energy Aspects Ltd.

Gasoline futures rose 3.5% to $1.75 a gallon on the New York Mercantile Exchange on Monday as traders watched developments in Texas:

  • Saudi Aramco’s Motiva Enterprises LLC is halting operations at its Port Arthur, Texas, refinery, the nation’s largest, according to an email from the company.
  • Marathon Petroleum Corp.’s Galveston Bay plant south of Houston was shut in response to the chill, Reuters reported.
  • Exxon Mobil Corp. shut its massive Baytown refinery near Houston, as well as some units at its refinery in the town of Beaumont about 70 miles (112 kilometers) to the east, spokeswoman Sarah Nordin said. In addition to the cold, the Beaumont closure was also driven by a shortage of natural gas.
  • Total SE ratcheted down crude processing to minimal levels and shut a key refining unit at its Port Arthur, Texas, plant, a person familiar with operations said. The refinery probably will shut completely within hours as temperatures drop, the person said.

Exxon

finviz dynamic chart for  XOM

Oil pipelines, electricity generators and wind farms have been paralyzed by the extreme weather conditions in the nation’s top crude-producing state. Refinery capacity is shrinking at a faster pace than oil production is declining due to the arctic weather, according to Energy Aspects.

“Disruptions to refining operations could be prolonged if the cold damages any equipment or if the power outages affecting Texas are not resolved quickly,” the consultant said in a note to clients.

— With assistance by Sheela Tobben, and Javier Blas – Bloomberg

About Stu Turley 3233 Articles
Stuart Turley is President and CEO of Sandstone Group, a top energy data, and finance consultancy working with companies all throughout the energy value chain. Sandstone helps both small and large-cap energy companies to develop customized applications and manage data workflows/integration throughout the entire business. With experience implementing enterprise networks, supercomputers, and cellular tower solutions, Sandstone has become a trusted source and advisor.   He is also the Executive Publisher of www.energynewsbeat.com, the best source for 24/7 energy news coverage, and is the Co-Host of the energy news video and Podcast Energy News Beat. Energy should be used to elevate humanity out of poverty. Let's use all forms of energy with the least impact on the environment while being sustainable without printing money. Stu is also a co-host on the 3 Podcasters Walk into A Bar podcast with David Blackmon, and Rey Trevino. Stuart is guided by over 30 years of business management experience, having successfully built and help sell multiple small and medium businesses while consulting for numerous Fortune 500 companies. He holds a B.A in Business Administration from Oklahoma State and an MBA from Oklahoma City University.