Should we discuss diesel prices in the USA?
Refineries have quit running crude since 2020: Convent. Alliance. Martinez. Cheyenne. Rodeo. Houston. Los Angeles. Benicia. Dickinson in North Dakota. About 1.72 million barrels a day of capacity stopped taking crude. That is real, and nobody should tell you otherwise.
While those shut down, the ones still standing got bigger. Roughly 760,000 barrels a day got built back through expansions. Beaumont alone added about 240,000 in 2023 and now runs at 612,000. That is why the net is smaller than the closure list looks. Lost on one end, built back on the other. Per the EIA’s own count, US refining capacity is down about 4% to 5% from the 2020 peak. Not a third.
In 1982, this country had 301 refineries and LESS total capacity than it has today, with 130. Midwest capacity actually went UP this year. The ND – Dickinson plant did not vanish either. It converted to renewable diesel in 2020 based on government mandates and grants**. Mandan is still running, 72,000 barrels a day, and it runs Bakken sweet.
About 30% of every barrel that goes through a US refinery comes out as distillate right now. The old records were 29.7% in 2008 and again in 2011. In 2010, the average was 27.5%. We make about 5.2 million barrels a day. This country burns about 3.6 million. Refineries have been running at 94% to 98% capacity all summer. More of it is going overseas. US diesel exports hit a record in the second quarter. 1.56 million barrels a day, per EIA. That is 30% over the 5-year average.
The refining margin is set worldwide. The cut refiners get for turning a barrel of crude into diesel went over 100 dollars a barrel in August for the first time ever. On the Gulf Coast, that cut was running $91 in late August, up from about $30 a year earlier. Refiners are making that. Russia normally makes more refined product than anybody except the USA and China. Ukrainian drones have hit a Russian refinery on average once every 3 days this year. Russian refinery runs fell to 3.8 million barrels a day in June, the lowest in over 20 years, and their diesel output is down close to 30%. That is the IEA’s number, not ours.
S&P Global expects Middle East refinery runs to average about 1.6 million barrels a day below last year. China is sitting on its exports. The world is short of diesel, and we sell into that market. Cheap crude here doesn’t change what the world will pay.
Midwest diesel is 6.680, and the Gulf Coast is 6.177 on the government’s weekly survey. AAA has North Dakota at 6.24. That gap is this month, not forever. In April, the Midwest was less expensive than the Gulf Coast. What changed is local. A big Illinois refinery went down September 13 when its power failed, and floodwater got a pump. The Midwest is also in its heaviest crude unit maintenance season of the year. Regional utilization dropped 11 points in one week to 89%. Harvest showed up at the same time.
The refinery closures did not cause this. They took away the slack. When there is no spare capacity, one refinery going down in Illinois moves the price you pay in Watford City. That did not used to be true. Washington State is arguing for a ban on diesel exports. S&P Global ran the numbers and figures that a full ban would force refiners to cut runs by about 1.9 million barrels a day, roughly 12% of everything this country refines, and reduce gasoline production down with it.
** Biodiesel is a renewable, biodegradable liquid fuel made from vegetable oils, animal fats, or recycled restaurant grease. It is made through a chemical reaction where organic fats or oils are mixed with an alcohol (like methanol) and a catalyst. The process separates glycerin from the oil to create fatty acid methyl esters (FAME), which is pure biodiesel. Unblended biodiesel is called B100. It is usually mixed with regular petroleum diesel. Common names show the biodiesel percentage, such as B5 (5% biodiesel) or B20 (20% biodiesel). The Biodiesel Blender’s Tax Credit, enacted in 2005 (via the American Jobs Creation Act of 2004/2005), offered a $1 per gallon tax credit. States like Maryland and Maine offered direct per-gallon tax credits ranging from $0.05 to $0.20 per gallon depending on local feedstocks like soybean oil.
The U.S. government has spent tens of billions of dollars on biodiesel and biomass-based diesel incentives over the past two decades. This financial support largely comes from the federal Biodiesel Tax Credit (BTC).
Beginning in 2025, the U.S. transitioned from the old flat-rate credit to the technology-neutral Section 45Z Clean Fuel Production Credit, which scales payouts up to $1.00 per gallon depending on the fuel’s lifecycle greenhouse gas reduction. This transition drastically expanded the government’s fiscal exposure. The Joint Committee on Taxation (JCT) projects the modified 45Z credit will cost taxpayers $53.1 billion between FY2026 and FY2035.
Separate from tax credits, the government heavily subsidizes biodiesel blending and distribution infrastructure. Higher Blends Infrastructure Incentive Program (HBIIP): The USDA manages a $500 million spending package allocated under the IRA to increase consumer access to higher biofuel blends. The DOE regularly awards hundreds of millions—including a targeted $500 million investment over a recent two-year span—toward bioenergy and biorefinery research.
(VM parting shot) Your tax dollars at work. If biodiesel made financial sense, we wouldn’t have to spend an aggregate of $100+ billion subsidizing and incentivizing it.
Bullet Points:
** The news feeds have covered Xi’s purge before he came to the US for a state visit and the UN General Assembly meeting. He purged two of the country’s highest-ranking military leaders, General Zhang Youxia and General Liu Zhenli, in September 2026 as part of a sweeping anti-corruption and political loyalty campaign. General Zhang Youxia: Vice-chairman of the Central Military Commission (CMC) and second-in-command to Xi in the military hierarchy, making him one of the most powerful (now former) military figures in China. General Liu Zhenli: Member of the CMC and chief of staff of the Joint Staff Department. According to state media announcements confirmed by the Politburo, both generals faced accusations of being “disloyal and dishonest to the Party,” which can be translated as being disloyal to the Party. Xi. They were accused of taking massive bribes, forming self-serving cliques, and improperly influencing military promotions. Isn’t that what generals in China do? I mean, isn’t that their job?
** 5% of the deaths in Canada are MAiD, which shows Canada has health care to die for.
** During the Trump-Xi Summit in Washington last week, Chinese President Xi Jinping told U.S. President Donald Trump that the two countries should act as partners rather than rivals. Does that mean that the Cold War between China and the US is over? Pardon my cynicism, but I’ve heard that before. Does that mean they won’t be shipping fentanyl anymore? What about Taiwan? Are they still cutting steel to expand that Pacific Fleet? Xi said Washington and Beijing must hold the line of “no conflict and no confrontation.” Do we interpret that to mean their air defense capacity is no longer seen as functional in the Workers’ paradise? Xi referenced the historical “Thucydides Trap,” arguing that a rising power and an established power can successfully avoid war through ongoing dialogue and mutual respect. What are we to make of that?
** How do criminals get guns? The answer seems incredibly obvious: illegally. Unfortunately, that generic answer doesn’t fully capture how criminals acquire firearms, so we began researching it. Ammo.com’s latest report analyzes exactly where and how criminals get guns.
** YOU have a right to PURCHASE healthcare. YOU have a right to PURCHASE a gun. But you do not have a right to have a doctor treat you for free. And you do not have a right to have a doctor treat you, and you say – Send the bill to LL. I have a right to defend myself, and I have a right to buy a gun as the tool I choose to do it with. Another thing I do not have a right to do is have a mechanic fix my car and send you the bill. Take responsibility for yourself, and don’t expect others to carry your water.
** Poland is offering to cover $15,000 per year for each U.S. soldier stationed on its territory, alongside infrastructure expenses, as Warsaw and Washington discuss a larger American military presence. Polish Deputy Defense Minister Paweł Zalewski disclosed the proposal during an interview with RFE/RL on September 25.
** Iran’s Oil Money – Iran’s President Masoud Pezeshkian revealed this week that his country’s money in China is blocked. “We shipped our underground oil over there, tanker by tanker, only for the payment to be tightly withheld in their banks, not a single cent withdrawable,” Tehran claims, with more than $100 billion frozen worldwide, and China holding the biggest slice. The Red Chinese haven’t coughed up cash, but they do sell them radar and missile systems that don’t work as advertised for billions. Those payments and others are made through deposited balances. They also sell satellite time to the Iranian regime to aid them in targeting. The Chinese play Chinese games. The Celestials never do anything for free.
Parting Shot
VM has a new motto
End
Diesel:-
Went into city today for post surgery check. On the way in diesel was $2.90 a litre. On the way home three hours later some places were $3.00 a litre or $11.40 for a US gallon.
Fairly similar government interference in the market in Australia.
I bought 300+ gallons of diesel the first of march this for year $3.39 delivered when the two aircraft groups pulled up offshore the SOH. Reg unleaded for $2.39 or so
Last month I got 300+ gallons of diesel again for $4.95 delivered when the Houthis got frisky. $3.59 for the gas
Good prices.
In November of 2007 we went to Maryland to conduct a seeker test against small boats at sea. I left my truck at the DFW airport. When I returned, my .45 pistol had been stolen from my truck. Fast forward to something like 2017, and I get a phone call from a LEO in California. He asked if I owned a particular make and model of a .45 pistol. I replied that I had, but it had been stolen in 2007. He replied that it had been used in a crime and the state of California now had it in their possession. I said I was sorry to hear that, but could they ship it to my friend with an FFL? He replied that no, I could not have my firearm back as in this particular jurisdiction, the CA judge had all firearms used in committing a crime destroyed. I thanked him for letting me know and then ruminated on how CA could take my lawfully purchased firearm and destroy it without returning it… It wasn’t worth pursuing legally, but it made me appreciate Texas even more.
And you never saw evidence that it had indeed been destroyed?
I hope it’s not used in another crime.
Police misuse:-
One of the two rifles used in the 1996 Port Arthur massacre was handed into the Victorian State Police as they banned in the state former/ current military weapons.
Somehow it ended up in Tasmania helping kill 36 people. This bit was skipped over by the media and courts.
There ya go….
The cops in califukya put an asterik by the gun in the report to let other cops know it is still out and about.
“and then ruminated on how CA could take my lawfully purchased firearm and destroy it without returning it…”
–
“… It wasn’t worth pursuing legally,…” You answered your own question.
–
I was an FFL there for near 20 years, up until 2012. I knew of more than one municipality that had unwritten policies of concealed carry confiscation, even if you had a current CCW. Want it back? Sue us. Wife and I escaped to Texas in 2016.
Yeah, been there done that. I was a FFL there from 1992 until I escaped across the Colorado River in 2005. Arizona is much more friendly to FFL businesses.
I just did a BATF trace for a firearm. The guy I sold it to had left it in his car. He’ll probably be getting a call from the agency that recovered it.
At a recent annual FFL meeting, the BATF stated that 40% of stolen guns come out if vehicles.
My son left his Airweight in the car in the glove compartment when attending a ball game.
In a paid lot.
He waited over an hour for the Detroit cops who chewed him out for not taking it into the stadium.
A violation of Michigan State law.
Dad had a pistol he kept under his car seat in a small wooden box. Car was dropped at a car wash, and sometime later that day when Dad went for the pistol, it was gone. Hmmmm.
Here’s something else for you to entertain yourself with down at the renewable energy credits comedy club. Google up “Kingston brothers renewable energy credits” and prepare to be amazed.
Why didn’t I think of that?
Oh yeah. I’m honest.
OH, so I’m craven because I offer biodiversity credits – trying to save spotted owls and other woodland creatures – God’s creatures?
Tradecraft.
Good start on discussing diesel. Now do liquified petroleum gas (propane) that is mostly derived from natural gas. Those Asian folks might have to get more LNG from USA at a higher price as the Mideast shipments of LNG are still low from the war with Iran.
*
As to staff command, don’t forget the helpless guys standing out in the sun all day waiting for a “decision”.
LNG is a very different situation, isn’t it?
I built a project in a biodiesel refinery about 12 years ago. One thing I noticed was how some of the raw feed products smelled like french fries. Another thing I noticed was how very few things were permanently installed. Most everything was on skids, which I assumed was to quickly disassemble the facility if, and when, government money was withdrawn. The product was mandated to be added to diesel in the local refineries, and somebody was making huge sums of money on tax dollars.
Diesel: Good overview of the behind the scenes production truths…sort of like the AI scare happening, WTP are being lied to every.single.day…everyone (ie. politicians and Media talkers) become instantaneous experts on subjects they have no clue while demanding we listen to their Chicken Little professions and predictions. Heck, wasn’t supposed to rain at all today per the Weather Soothsayers with Triple WhizBang Doppler Prediction Doohickies…raining outside right now.
Fact is…from my cheap seat…The Global Fiddlers are working hard to undermine PDJT and the Midterms by targeting the LIV (Low Information Voter, h/tRush) who have managed to convince themselves (by listening to the above Talkers) the economy stinks and fuel prices being high are THE metric and all Trump’s fault. Watching fuel stop signage update to a higher price is galling, and very telling. This is intended to tank the economy, like Covid, only a different avenue. Special place in Hell for these people.
–
What is even more reprehensible is government interfering in everything we do then make a mess of things, then tell us what a wonderful job they are doing working so hard for America…as the boat runs over the falls.
***
Biodiesel: More of the above…right up there with Wind and Solar, which was intended to wreck the oil industry one idiotic Unicorn energy fart at a time. Subsidies with WTP’s cash should be illegal. Their motto: If it works…fix it.
***
Criminals & Guns: But it’s your fault for owning yours when criminals commit crimes and murder someone.
***
Parting Shot: Yeah, that…a lot of talk and discussion while leaving out action, then it’s too late. The Gloucestershire Air Base terrorists were known 3 weeks prior yet were thwarted by a local farmer who found their vans parked across the country roadway. Right now the commendations are being bandied about, not for the farmer though.
The British announced all five Gloucestershire suspects will be released on bail. Perhaps no weapons or explosives were found. No other information was provided by the spokesperson.
‘Released on bail’, Oh goodie, let’s just allow them to walk around free. A page right out of Blue City DA’s here in the USA…what could possibly go wrong (they’ll be out of the country by tonight, if not already).
No bail amount was listed.
1 and 2 are Peterbuilt 389’s.
3 is a Kenworth and 4 is a Peterbuilt 359.
Besides boats we now know your other talent…well done Ed.
Impressive.
Diesel. Captain Obvious answer is stop the low sulfur mandate and eliminate DEF. Yeah, when pigs……….
2002 I had a local homebrew source of 100% biodiesel – local prepper type. My Mighty Max ran on that smoother with better milage than truck stop diesel. Maybe all the corn wasted on ethanol could become biodiesel? If not, those fields will grow other crops like hemp. Hemp seed oil is easily made into biodiesel and the stalks, fermented, produce useful byproducts.
Stop WSF! Nobody likes simple answers when there are big bucks to be made.
Or votes to be bought.
DEF ticks me off. That’s exactly why I bought a pickup with a big V-8 (without turbos) instead of a diesel.
No chance of adding DEF to the diesel fuel tank among other benefits.
Saw a photo in “Popular Mechanics” or “Popular Science” or some such magazine that stuck with me. It is a low light photo, the light being provided by the dull orange glow from the center of a 2-inch cube of ceramic material. The cube is held in the naked palm of someone’s hand. What if we could make a ceramic based internal combustion engine that was air cooled and ran on natural gas?
You are going to end up sitting at the WSF table with these crazy thoughtful ideas.
Indeed. And that is something I would look forward to.
LOL
I love the deer slayer cattle guards on the front of the first 2.
Would also work for antifa/DSA removal!
Should we discuss diesel prices in the USA?: Ya know, skip the fuel island….you can still park and – free of charge – wander around inside Buc-ee’s munching on a nice sammich, a cold beverage, and some homemade fudge for the same prices as before last week.
I remember in 2012, the Navy did a biodiesel test in RIMPAC 2012- The Navy purchased roughly 450,000 gallons of the early-stage biofuel at about $26 per gallon!!! And a destroyer, I ‘think’ the USS Chafee actually had to pull into Pearl and have her engines ‘cleaned’ before she could make it back to San Diego.
When you talk about refineries, there has not been a ‘new’ refinery built in the USA in over 50 years. Planning and approvals take a minimum of 7 years, and mostly would take 10-15 years on average. In the Middle East, 3 years is the max, with most approved in ONE year! The more refineries the left manaages to shut down, the less diesel/gasoline is available to consumers, and by making it ‘easier’ to sell it abroad than here at home, it stands to reason that the manufacturers are going to sell it overseas… sigh