Corporate Knights headline: Is the sun setting on America’s oil refineries?
Subheadline: Chevron CEO says ‘there will never be another new refinery built’ on U.S. soil
BY ALEX ROBINSON
JULY 18, 2022
he United States’ capacity to refine oil into fuel has shrunk significantly during the pandemic because of the closure of refineries. And it may never come back, says the CEO of the second-largest oil company in the U.S.
In a closed-door meeting between Chevron CEO Mike Wirth and U.S. Secretary of Energy Jennifer Granholm in late June, reported by Bloomberg, both agreed that the shortage in refining capacity will persist and probably get even worse, as the country saw at least five refineries close in 2021 alone. These included a Shell facility in Louisiana and others in California, North Dakota, Wyoming and New Mexico. Analysts blame pandemic market conditions for the closures, as lockdowns slowed demand for oil, but also the energy transition, as some energy companies look to decarbonize their portfolios.
“My personal view is there will never be another new refinery built” on U.S. soil, said Wirth. “You’re looking at committing capital 10 years out, that will need decades to offer a return for shareholders, in a policy environment where governments around the world are saying, ‘We don’t want these products.’”