CHICAGO — In addition to the price and supply of ammonia, the price and supply of diesel fuel is one of the factors increasing anxiety among farmers.
And according to one agriculture industry analyst, nothing that could ease that fear is likely to happen anytime soon.
“Who wants to have a refinery in their town? We asked an audience of seed industry executives and staff at a corn, sorghum, soybean and seed industry expo.
Mr. Basse outlined two main factors that are worrying American farmers despite years of record profits for the U.S. agricultural industry.
“The price of ammonia has skyrocketed. that’s it,” he said.
“So all farmers are doing better farming compared to ammonia today. is unlikely to drop to
Then he turned to another farm staple: fuel.
“And you talk about diesel,” he said.
There is some good news on the price side.
“What I am here for is the gradual decline in diesel prices as we see today. But a big break in the diesel market means that one thing must ‘ says Basse.
One of them is what no one in our town wants: a new oil refinery.
“The United States hasn’t built a new crude oil refinery in 48 years. So if you want more diesel, you can only get it from another source: heating oil. Either crack it for kerosene or crack it for diesel. Either,” Basse said.
An early record cold spell that swept the United States in late 2022 meant that refinery operations turned to kerosene production and away from diesel production, leading to shortages and higher prices.
“If you look at diesel fuel inventories today, they are at their lowest level in years. It will take a long time to rebuild those diesel supplies,” Basse said.
“Ultimately, this diesel shortage will last until refineries increase capacity.”
He said any new refinery announcements would not have an immediate impact on the diesel market.
“Building a new refinery will cost about $40 billion to $60 billion and will take more than five years, so it’s a long way off,” he said.
“It’s not going to happen anytime soon. This means we have to import more products from abroad.”
Basse later added that further investment by the oil industry in new drilling or refining capacity could take a long time and may not happen at all when talking about expanding sustainable aviation fuels. rice field.
“Investing in oil patches is not where we need it.
“Who wants to invest in the oil and old fossil fuel industries when the government is against it?”
While the focus and push for electrification by environmentalists and the Biden administration continues, the European Union is moving in a different direction, easing its electrification accelerator.
“We cannot meet the energy needs of the United States today. This is why countries like the EU have stopped thinking about green fuels. We see hydrogen as the next opportunity,” Basse said.
“The US is still electrified and we haven’t seen enough investment in oil patches.”
He stressed that energy prices could continue to rise further due to the lack of investment in the US oil industry.
“We believe we need close to $290 billion in U.S. oil patch investment by 2028 to get where we need to be in the energy sector, which is not happening today,” he said. said.
