Every diesel post we put up, the top comment says the same thing. We shut down too many refineries.

So we went and pulled the numbers.

The Board

In raw dollars this is the highest diesel has ever been. 2008 was still worse after inflation.

You Are Right About The Closures

Refineries have quit running crude since 2020. Convent. Alliance. Martinez. Cheyenne. Rodeo. Houston. Los Angeles. Benicia. Dickinson right here in North Dakota.

About 1.72 million barrels a day of capacity stopped taking crude. That is real and nobody should tell you otherwise.

But Here Is What Else Happened

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 of it in 2023 and now runs 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% off the 2020 peak. Not half. Not a third.

And in 1982 this country had 301 refineries and LESS total capacity than it has today with 130.

Midwest capacity actually went UP this year.

Our own Dickinson plant did not vanish either. It converted to renewable diesel in 2020. Mandan is still running, 72,000 barrels a day, and it runs Bakken sweet.

We Are Not Making Less Diesel

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 of it. This country burns about 3.6 million.

Refineries have been running 94% to 98% flat out all summer.

And 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.

So What Is It

It is the refining margin, and that gets 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 dollars in late August against about 30 a year earlier. Refiners are making that.

Russia normally makes more refined product than anybody except us 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 and 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. Crude being cheap here does not change what the world will pay.

Why The Midwest Is Worse Than Texas

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 CHEAPER 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.

What It Means On Location

The 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 is arguing about banning diesel exports. S&P Global ran the numbers and figures a full ban would force refiners to cut runs about 1.9 million barrels a day, roughly 12% of everything this country refines, and knock gasoline production down with it.

Who's Hiring

Outfits are hiring in North Dakota, Wyoming and Texas this week, including seats that need no CDL.

The current board is the one to check.

Field Report

What are you paying at your pump today and what town.

And for the hands who actually work in refineries, tell us what that work actually looks like from the inside. Most people arguing about refineries have never been inside one.