Diesel Crisis: Can America Reopen Refineries Before Energy Security Collapses

I was on a roll today. “Virginia Gov Drives the Net Zero Budget Like a Shoppin Cart”

In this week’s Energy News Beat podcast, host Stu Turley tackles the critical energy challenges facing America, from skyrocketing diesel prices and refinery closures to the political policies driving energy costs higher. With diesel at $6.32 per gallon and heating oil up 77% year over year, the administration is exploring ways to reopen shuttered refineries under the Defense Production Act. However, the real story lies in how state-level policies—particularly California’s net-zero mandates and Virginia’s renewable energy push—are exacerbating the crisis rather than solving it.

Turley examines refining margins, Middle East geopolitical tensions, and corporate earnings, making a compelling case that America’s energy security depends on dominance in domestic production, not foreign reliance or ideologically driven policies that undermine the oil and gas industry.

Diesel Crisis: Can America Reopen Refineries Before Energy Security Collapses

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1. U.S. Refinery Crisis & Diesel Shortage

Diesel prices have surged to $6.32/gallon (up from $3.63 a year ago), driven by refineries running at maximum capacity (98%). With heating oil up 77% and diesel stocks at their lowest levels since 1982, the administration is exploring reopening closed refineries using the Defense Production Act (DPA). Key projects include the U.S. Holdings refinery in Tyler, Texas (74,000 barrels/day) and the Valero refinery in California.

2. California’s Energy Policy Impact

I launch into a rant and heavily criticize California’s net-zero policies under Governor Newsom, arguing they’ve destroyed the oil and gas industry and created a “national security risk.” California residents pay $1.85 more per gallon on regular gas and $2.18 more on diesel. The Valero refinery closure exemplifies this problem, with the state preferring to import fuel rather than support domestic production.

3. Virginia’s Rising Energy Costs

Gov. Spanberger’s administration is addressing skyrocketing electricity bills (up $50/month in three years), but the host warns that new policies promoting solar, wind, and storage—without proper grid reliability measures—will continue driving costs up. The state’s participation in regional greenhouse gas initiatives is criticized as creating “slush funds” rather than reducing emissions.

We’re in the middle of an update to this story, and it should roll out by Monday.

4. Defense Production Act & Pipeline Expansion

Secretary Chris Wright is using $42 million in DPA funding to advance the Constitution Pipeline, aiming to lower energy costs for New York and New England by increasing natural gas supply. Energy Secretary Chris Wright framed the move as a direct response to years of restricted infrastructure. In comments on Fox Business and in the official announcement, he stated that the funding supports critical pre-construction and permitting work—including environmental reviews, engineering, and site preparation—before groundbreaking.

He highlighted national security needs, noting submarine manufacturing in Groton, Connecticut, military bases across New England, and an electric grid “on the ragged edge of surviving at peak demand times, particularly in the winter.” Wright added: “The answer to high prices is more supply to push prices down. The answer to getting to the ragged edge of blackouts is more electric generation, more energy for home heating as well.”⁠Foxbusiness

5. Middle East Oil & Geopolitics

Saudi Aramco evacuated its headquarters due to attacks, but Middle East oil production remains stable. Iranian sanctions are effectively starving Iran’s economy, with tankers sitting idle.

Saudi Aramco ordered the evacuation of its Dhahran headquarters on Thursday, October 22, 2026, directing staff to work remotely after an alarm. Multiple sources, including Bloomberg and Reuters, confirmed the move. It is the first full headquarters evacuation since the U.S.-Israeli war with Iran began in late February 2026.⁠Bloomberg ⁠Reuters

The headquarters, which includes an operations center overseeing oilfields, refineries, export terminals, and pipelines, had already suffered extensive fire damage earlier this month when Yemen’s Iran-aligned Houthis struck the building. Most staff had been working remotely since that attack, with only essential personnel remaining on site until the latest order.⁠Reuters

The evacuation comes amid a sharp escalation in Houthi attacks. On Wednesday, a drone targeting Aramco’s Shaybah oil field killed two people (operations were unaffected). The same day, an attack on King Fahd International Airport in nearby Dammam killed two people (a Saudi citizen and an Indian national) and wounded eight others. Saudi forces have responded with strikes on Houthi missile sites and report intercepting many projectiles. The U.S. has ordered the departure of some diplomats and families from Saudi Arabia due to the Houthi threat.⁠Bloomberg ⁠Reuters

6. Canadian Oil & Political Leadership

Alberta’s oil industry is critical to North American energy security, with Canada supplying 20% of U.S. oil imports. The host criticizes Canadian leadership for misaligning with U.S. interests.

7. Refining Margins & Stock Performance

Valero earned $6.8 billion with a $72 diesel margin crack spread, while Halliburton and other energy companies report strong earnings despite softer U.S. activity.

8. Bloom Energy Analysis

The host questions Bloom Energy’s “green” marketing claims, noting that its fuel cells run on natural gas and emit emissions similar to the grid average—not significantly cleaner than conventional power plants.

Check out the Research Tab above, and paid Substack Subscribers can request research on any project you are looking at or fighting at City Hall.

Bloom advertises as “Green” Energy, but the facts don’t show they are that green.

9. Energy Dominance & National Security

The overarching theme: energy security depends on domestic production, not reliance on foreign suppliers. The host argues that California and other blue states’ policies pose a national security risk comparable to a “zombie apocalypse” if fuel supply chains fail.