Wyoming Group: Most Local Refineries Sell Fuel Elsewhere
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Most of Wyoming’s output of diesel, renewable diesel and biodiesel is sent to other states rather than being used locally.
This finding was among several in a 17-page report released Oct. 18 to Gov. Mark Gordon following his directive this summer that a group be formed to determine what Wyoming could do to combat record highs for diesel and gas prices being experienced across the nation.
“We fully recognize that, fortunately, the prices in June were higher than the prices Wyomingites are currently paying, but they still remain well above what we were paying a year ago,” Brenda Henson, state revenue department director, wrote in the report. “However, fuel prices are a major factor contributing to inflation. The rapid rise in the cost of all commodities exacerbates the pain our residents feel at the pump.”
Foertsch
As chair of the Governor’s Gas and Diesel Price Working Group, Henson penned the report’s cover letter. Others who served on the 10-member committee appointed by the governor included Sheila Foertsch, managing director of Wyoming Trucking Association; Luke Reiner, state transportation department director; and Jeremiah Rieman, executive director of Wyoming County Commissioners Association. Other participants were three state Republican legislators: Sen. Ed Cooper (a self-employed oil and gas consultant), Rep. Clark Stith (an attorney) and Rep. Mike Greear (a sugar company president and CEO).
Prior to issuing its report, the working group held two public meetings in July and conducted several working sessions to gather information. It determined that Wyoming’s diesel and gas prices are affected by crude prices, refining costs, distribution and/or marketing charges and taxes.
Although noting that most factors impacting fuel prices are beyond the reach of Wyoming’s government, the group looked at areas for improvement and local fuel production since the state ranks among the nation’s top 10 oil and gas producers. Wyoming accounts for 20% of U.S. crude oil production, yielding some 240 thousand barrels daily.
“Northern tier refineries generally send their product north and west, not south, to Wyoming. Furthermore, Wyoming refineries have not increased their supply to replace the renewable diesel now refined by Holly Frontier Cheyenne (6,000 barrels per day) and Holly Frontier Sinclair (10,000 barrels per day),” the report surmised, adding that “a significant portion of the fuel refined in Wyoming is renewable diesel shipped out of state.”
Of the six regional refineries cited in the report, only Wyoming Refinery Newcastle/Par Pacific markets some of its 18,000 barrels per day capacity of diesel, gas, jet fuel, butane and propane to Wyoming — and South Dakota.
Wyoming’s remaining refineries sell their fuel (including diesel and renewable diesel) to California, Colorado and Rocky Mountain region states. In 2020, Holly Frontier Corp. converted its 48,000 barrel-per-day petroleum refinery in Cheyenne to produce renewable diesel sold to California.
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Because renewable diesel is chemically the same as petroleum diesel, it may be used in its pure form (R100) as a drop-in diesel fuel replacement or blended with petroleum diesel and/or biodiesel.
The report identified “strong headwinds” to build new refineries in Wyoming (taking seven years for permitting and construction) since most federal policies discourage oil and gas development. It also mentioned the state could streamline permitting processes to increase its refining capacity.
Today, Wyoming has limited refining capacity even though its refineries are operating at 95% capacity.
“While some refineries in the U.S. have increased capacity, in Wyoming, no new refineries have been built in decades. Two refineries have moved to refining renewable diesel, reducing gas and diesel refining capacity for fuel used in Wyoming,” the report stated.
Chemically different from biodiesel, renewable diesel is a low-carbon fuel that is becoming an alternative replacement for regular petroleum diesel because it can be used in existing diesel infrastructure and engines, the Alternative Fuels Data Center of the U.S. Department of Energy explains.
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