The Biden administration’s attacks on the energy industry is a main driver behind the impending diesel crisis in the United States, a major supplier has said.
The Democrat’s “demonization of fossil fuels” and energy policies that are being marketed as being “green” are behind the nationwide diesel and heating oil shortages, Mike Taylor of Combined Energy Services told Fox News’ Tucker Carlson.
The top executive for a U.S. energy supplier in the northeast, said that far-left policies are restricting energy production and preventing it from keeping up with critical consumer needs in the region.
National average diesel prices are 33 percent higher for November deliveries and are expected to go up even more, reported CNBC.
U.S. diesel reserves are at their lowest levels since 1951, while a ban on Russian energy is set to take effect next year, which will only increase competition for fuel supplies worldwide.
The United States is reportedly on the verge of running out of diesel fuel in less than a month, according to the Energy Information Administration (EIA).
The nation’s diesel supply has fallen to 25 days over the last two weeks, well below the 35-40 days that offers a comfortable buffer for the fuel markets.
At least seven southeastern states are at “code red” levels as stockpiles of diesel hit rock bottom, Mansfield Energy told customers on Oct. 25.
The “code red” alerts have been applied in Maryland, Virginia, North Carolina, South Carolina, Georgia, Alabama, and Tennessee.
Looming Hardship
The American economy is dependent on the supply of diesel fuel. Without it, commercial traffic—especially trucking and non-electric powered railroad lines—will come to a halt.
Almost all consumer items are transported across the country via truck or by train.
If locations run out of diesel, commerce would be paralyzed, leading to a cascade effect on everything ranging from retail to groceries.
Meanwhile, supplies of diesel distillates, such as heating oil and jet fuel, have fallen to their lowest levels in more than 10 years, Taylor said.
He said that New England will freeze this winter because of Democrat-led policies.
“The climate change agenda in the Northeast, Tucker, is really what’s causing this,” he said, citing the “demonization of fossil fuels” by Biden’s White House.
Diesel inventories in New England and New York are down over 50 percent since last year and at their lowest levels since 1990, Andy Lipow, president of Lipow Oil Associates, told CNBC.
Lipow said East Coast refineries are trying to produce as much diesel as possible, but they are dependent on seaborne shipments of crude.
Any serious delay in the weather can cause a terminal to run out of supplies.
East Coast refineries operated at 100 percent capacity in June and July, but now they are running at 102 percent, according to the EIA,
“No more supply is forthcoming from the four East Coast refineries,” Lipow said.
Taylor said most of the northeast’s supplies of diesel, kerosene, home heating oil, and other fuels, comes from refineries in the Philadelphia and New York metro areas.
The Midwest is also seeing supply constraints, raising prices for farmers, reported CNBC.
Democrat Policies, Sanctions On Moscow Blamed For Shortages
Additionally, oil from Russia will soon no longer be able to supplant restrictions imposed on domestic U.S. production, due to the sanctions the Biden administration has imposed on Moscow.
Energy traders are currently diverting oil tankers away from Europe to the United States because the price of diesel is now higher here than in Europe.
The United States may face increasing competition with Europe for diesel, particularly after the sanctions on Russia take effect in February 2023.
Taylor also said that the states pushing detrimental “green” energy policies are the same ones sourcing much of the fuel, being very reliant on it.
He explained that New Jersey and New York are “on the fast track to try to eliminate” the types of energy resources Americans still rely on, which are now facing shortages.
“All of our oil comes out of that region,” Taylor told Carlson.
“It floats up through New York Harbor, and that supplies New England. We’ve already seen curtailments and shortages up on the Hudson River terminals. That was early October,” he explained. His firm’s operation are based in the Catskills of southeastern New York.
“Our suppliers are really saying it’s a fine tightrope … that if we have a drastically cold winter could be trouble.”
All of New England and the Mid-Atlantic states have signed onto the RGGI cap-and-trade pact, which critics say will quickly lead to double digit increases in home heating costs, in addition to other shortages.
Pennsylvania and Virginia also currently on a moratorium on state-parkland fossil fuel speculation, due to Democrat-led policy. But Republicans in the two states are pledging to pull out of that pact if they win.
Meanwhile, Taylor noted that the resumption of operations at a key refinery in Paulsboro, New Jersey, near Philadelphia is a good sign, as reserves remain at 60 percent of the five-year average.
High Diesel Prices to Hurt Lower Income Families’ Heating Bills
Taylor said that $7 a gallon Kerosene is hurting low-income Americans the most, as many of their homes are often heated by kerosene or propane.
“It’s very hard to get [kerosene] right now and it’s going to be unaffordable,” he warned if the same energy policies continue to rule the day.
Taylor added that the average heating oil price is now at $6 in the colder northeast—up $3.50 since Biden took office.
One major issue preventing the northeast from receiving additional diesel is the Jones Act, also known as the Merchant Marine Act of 1920, which prohibits a foreign vessel from transporting all goods between two U.S. ports.
Refiners are pressuring the Biden administration to relax the shipping ban.
The 25-day diesel supply estimate can be misleading, said Patrick De Haan, head of petroleum analysis for GasBuddy.
“That number will move around. It’s been as high as 40,” he said. “That’s not days of supply, it’s a calculation based on supply and demand right now.”
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Bryan S. Jung is a native and resident of New York City with a background in politics and the legal industry. He graduated from Binghamton University.
