The people who gave us $6 per gallon diesel now want to be elected because diesel is punishingly expensive.
So here we are, with diesel at $6 a gallon.
Listening to the political conversation, you could easily come away thinking this all started when Iran went to war. In fact, it didn’t. Iran supplied the shock, but we had already built the vulnerability, which is a key distinction.
Yes, the war in the Middle East has disrupted oil flows and tightened global supplies. The Energy Information Administration says that tight global distillate supplies and elevated crude prices are pushing diesel prices higher. U.S. distillate inventories have fallen below their five-year range, while the loss of significant refining and petroleum-product supplies worldwide has tightened the market.
However, while that explains why diesel prices are so high right now, it doesn’t explain how we became so vulnerable to price shocks.
The reality is that America still produces enormous quantities of crude oil. The trouble is that crude oil is not diesel. Before it reaches the tank of the truck delivering your groceries, somebody has to transport it, refine it, and distribute it—and that brings us to the question nobody seems especially interested in asking:
What happened to the refineries?
The newest major U.S. refinery came online in 1977.
There is a technical footnote here. A 45,000-barrel-per-day refinery in Galveston began operating in 2022. Forty-five thousand barrels a day. In the world of American refining, that is practically a microbrewery.
The newest refinery with significant downstream capacity, then, is Marathon’s Garyville, Louisiana, refinery, which began operating in 1977. It has since been expanded to roughly 617,000 barrels per day.
That is one heck of a long stretch between major new refineries.
For decades, we made the fossil-fuel business increasingly difficult, expensive, and politically uncertain. Different presidents pursued different policies, but the general direction was the same: away from fossil fuels. It’s been exceptionally bad in those Democrat-run states, which expressly announced their desire to decrease fossil fuel production. California, for example, had 38 operating refineries in 1982; as of this year, it has only 12, a 68% reduction in capacity.
That is one heck of a long stretch between major new refineries.
For decades, we made the fossil-fuel business increasingly difficult, expensive, and politically uncertain. Different presidents pursued different policies, but the general direction was the same: away from fossil fuels. It’s been exceptionally bad in those Democrat-run states, which expressly announced their desire to decrease fossil fuel production. California, for example, had 38 operating refineries in 1982; as of this year, it has only 12, a 68% reduction in capacity.
However, unlike California, a government does not have to announce, “Shut it down.” There are quieter ways to accomplish much the same thing. Make the business harder and more expensive through regulation. Make construction of a new refinery so uncertain, and potentially so unprofitable, that sinking billions of dollars into the industry’s future starts looking like a bad bet.
And of course, investors notice these things changes and react accordingly.
They notice when politicians describe an industry as yesterday’s technology. They notice when regulations increase costs, when permitting becomes a years-long obstacle course, and when a multibillion-dollar refinery has to be evaluated against the possibility that the political environment will turn against it before the investment has paid for itself.
At some point, a perfectly sensible question arises: Why build another refinery?
But before asking why nobody is building new refineries, take a look at what happened to the ones we already had. They’re a loud warning to investors about what will happen to their money.
In 2025, LyondellBasell ended refining operations at its Houston refinery, which had a capacity of about 264,000 barrels per day. Phillips 66 shut its Los Angeles refinery, another 139,000 barrels per day. Valero’s 145,000-barrel-per-day Benicia refinery followed.
No slogan is necessary here. The arithmetic speaks quite nicely for itself.
The EIA says U.S. operable refining capacity fell by more than 250,000 barrels per day between January 2025 and January 2026, with two fewer operable refineries.
Iran did not shut down Houston, Los Angeles, or Benicia. Iran did not decide America should not build another major refinery.
And Iran did not spend decades telling investors that fossil fuels were an industry on its way out. We did that.
Now we are surprised that the cushion is gone. However, this is exactly what happens when an industry becomes less attractive to investors. Eventually, the investors behave accordingly.
Bill Clinton brought a new generation of environmental and fuel regulations. Barack Obama imposed additional regulatory pressure, although American oil production nonetheless rose dramatically during his presidency. Joe Biden openly discussed transitioning away from the oil industry and paused new federal oil and gas leasing while his administration reviewed the federal program.
We saw different presidents with different policies, but the investment signal was clear enough. And, logically enough, investors listen. So, now we have a geopolitical crisis, and everybody has suddenly rediscovered the importance of energy security.
The White House currently describes domestic petroleum production, refining, and logistics capacity as essential to national defense. Its April determination cited constrained financing, long lead times, permitting and infrastructure bottlenecks, and supply-chain limitations as obstacles to expanding that capacity.
Good. Because that is the problem. But recognizing the problem today does not erase the road we traveled to get here.
Trump is president during this crisis, so he owns the response. But voters must remember he didn’t create the decades of accumulated refining constraints that existed before he entered the White House, although you wouldn’t know it from the political sales pitch from the same people who spent years pushing America toward reduced dependence on fossil fuels.
The people who gave us six-dollar-a-gallon diesel now want to be elected because diesel is six dollars a gallon. The architects of the vulnerability are campaigning on its consequences.
Diesel moves trucks. It powers tractors and construction equipment. It moves freight, supports manufacturing, and provides backup power. When diesel becomes more expensive, those additional costs eventually filter into almost everything those machines touch.
So this is about more than diesel. It’s about the cost of pretending infrastructure doesn’t matter until the day you desperately need it.
You cannot spend decades discouraging an industry from expanding and then profess astonishment when it stops expanding. You cannot tell investors that an industry is disappearing and then complain when they stop building the infrastructure that industry needs. And you cannot shrink the cushion for years and then blame the next geopolitical crisis because the cushion is gone.
Before accepting the next political sales pitch about who can fix the six-dollar diesel problem, perhaps we ought to look at the whole receipt.
The people who gave us $6 per gallon diesel now want to be elected because diesel is $6 per gallon. There is something almost impressive about that chutzpah.
Iran supplied the shock, but we built the vulnerability, and it has far-reaching consequences. Diesel moves trucks, powers tractors and construction equipment, moves freight, supports manufacturing, and provides backup power. When diesel gets more expensive, the added cost works its way into almost everything those machines touch, usually sooner than people expect.
You cannot spend decades discouraging an industry from expanding and then be genuinely surprised when it does not expand very much. You cannot keep telling investors that an industry is on its way out and then complain when they decide not to put billions of dollars into new infrastructure for it. And if you spend years reducing the cushion, well, the next geopolitical crisis is going to hurt more than it otherwise would have.
American Thinker









