Commentary

The only bad thing about switching from gas is it isn’t done yet

October 10, 2022 8:05 am

Gas prices at a station on Sunset & Pecos on Oct. 10, 2022. (Photo: Hugh Jackson)

One day in 1991 when I was a reporter in Casper, Wyoming, the Amoco oil refinery shut down. Needless to say Amoco blamed all those darned burdensome federal environmental regulations.

Those regulations (under a Republican administration at the time but I digress) must have been incredibly harsh and burdensome indeed: If I recall, a few miles downstream of the refinery on the North Platte River, on the bank of which the refinery was located and into which Amoco discharged its wastewater, multi-colored petroleum sheens were only visible to the naked eye every, oh, fifty yards or so. Jeesh, what’s the problem?

While exchanging emails about this over the weekend, my former Casper Star-Tribune colleague and mentor Paul Krza, sort of an inveterate archivist of fun stuff, sent me a an old clip – before my time – from C-ST in a story about refinery waste and spills in Casper. 

The worst hazard, an industry official explained to the reporter, is that “someone like you would see it.”

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(Photo of Casper Star-Tribune clip circa 1970s courtesy Paul Krza)

By 1991, Amoco’s Casper refinery was nearly a century old. Obviously it had undergone a lot of modernization and changes over the years. But Amoco didn’t want to modernize it or maintain it any more.

There have been a few new refineries built in the U.S. this century. But in the last 30 years, dozens of refineries have, like the Amoco refinery in Casper, shut down.

During the pandemic, about a million barrels of U.S. refining capacity, roughly equivalent to 6% of national production, shut down, because there was no demand for the oil. (Some of you will recall that in April 2020, the price of oil fell below zero.)

Declining refinery capacity has underscored how Nevada is an appendage of the California gasoline market. Recent unscheduled and weirdly unexplained maintenance at West Coast refineries, or what’s left of them, have curtailed operations, so gas prices spiked in Nevada and the West Coast over the last couple weeks. Expert-texperts expect prices to come down as the refineries come back on line (prices have already started dropping again). But the recently announced unholy alliance of journalist-murderers Mohammad bin Salman and Vladimir Putin will likely assure prices stay high through the election in any case.

Meanwhile, if Democrats were outlawed and barred from holding elected office in the U.S. and Republicans installed Donald Trump as President for Life, it would have no impact on U.S. oil refining capacity. It isn’t darn burdensome federal regulations that have constrained refining. It’s that other thing Republicans like to talk about so much: capitalism.

At about 18 million barrels a day, U.S. refining capacity is just shy of U.S. consumption, which is a little more than 20 million barrels a day. Any oil company that wants to spend money to upgrade a refinery – let alone build a new one – is going to get a big “no” from investors, who don’t want their money spent on hulking yesteryear-style industrial facilities for which there may or may not be demand going forward.

And there may not be demand going forward – not because of the aforementioned darned burdensome federal regulations, but because the motorized vehicle market is transitioning away from oil. The auto industry sees that is what customers are going to want.

For one thing, the oil industry, and hence the price of gas, has always been a basket case of volatility, infamously unbridled greed, and global geopolitical mayhem. Even the people who love to blame Biden and the Democrats for gas prices have no respect or sympathy for an industry that has been gouging them throughout their lives whenever it had the opportunity.

Another consumer factor – i.e., a market factor – driving the transition away from gas-powered vehicles is that people would prefer to be able to breathe the air.

The U.S., and most of the world, made truly great strides to reduce air pollution since the smogged up middle of the 20th century. Similar progress was made on protecting rivers from multi-colored petroleum sheens. Rivers don’t even catch on fire anymore. So nice work everyone.

Or almost everyone.

Oil, auto, manufacturing and other large and powerful industries, along with self-described market worshipers in politics and media, fought those efforts to clean up the air and water. Today’s self-professed market worshipers clamoring for more oil production and less environmental regulations are carrying on the legacy of radical 1960s anti-environmentalist reactionaries.

If Democrats were outlawed and barred from holding elected office in the U.S. and Republicans installed Donald Trump as President for Life, it would have no impact on U.S. oil refining capacity.

At his rally in Minden Saturday night, Donald Trump, along with Adam Laxalt, Joe Lombardo and MAGA Republican after MAGA Republican, pretended to be outraged by the price of gas in Nevada. As a factual matter, the only firm position they have on the price of gas is that they hope it stays high and even goes higher between now and the election, because they know voters will blame Biden and the Democrats for it.

An accompanying talking point from Republicans is that Biden and the Democrats are horrible and terrible and no good and very bad because they are trying to radically transform the economy by moving it away from fossil fuels.

The most horrible and terrible thing about moving the economy away from fossil fuels is that we didn’t do it already.

A version of this column was originally published in the Daily Current newsletter. It’s free, and you can subscribe here.

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Hugh Jackson
Hugh Jackson

Hugh Jackson was editor of the Las Vegas Business Press, senior editor at the Las Vegas CityLife weekly newspaper, daily political commentator on the Las Vegas NBC affiliate, and author of the Las Vegas Gleaner political blog. Prior to moving to Las Vegas, he was a reporter and editor at the Casper (Wyoming) Star-Tribune.

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