Energy Execs Tell Granholm Shuttered US Oil Refineries Won't Restart DURDEN

[carol ann parisi]

Energy Execs Tell Granholm Shuttered US Oil Refineries Won't Restart

BY TYLER DURDEN

THURSDAY, OCT 27, 2022 - 04:20 AM

Authored by Julianne Geiger via OilPrice.com,

U.S. energy executives told Jennifer Granholm that shuttered crude oil refineries won’t restart, Valero’s Chief Executive Joe Gorder said on Tuesday.

BusinesThe comments were made to the U.S. Energy Secretary at a recent White House meeting with energy executives, Reuters reported on Tuesday.

“The one interesting thing that came out of it, too, was there was consideration for the ability to restart refining capacity that had been shut down, and  I think the general sentiment was that wasn’t going to happen,” Gorder said.

Limited U.S. refinery capacity - and perhaps more critically, refinery capacity in specific U.S. geographic areas, known as PADDs - has spared worry in the United States over high gasoline prices and energy security.

US refinery run rates were north of 90% for much of the summer, according to the EIA’s Weekly Petroleum Status Report.

Shuttered refineries unlikely to start back up are the latest nail in the U.S. refinery coffin.

In June, Chevron CEO Mike Wirth posited that there would never be another new refinery built in the United States.

“Building a refinery is a multi-billion dollar investment. It may take a decade. We haven’t had a refinery built in the United States since the 1970s. My personal view is that there will never be another refinery built in the United States,” Wirth said at the time.

Oil and gas companies would have to weigh the benefits of committing capital ten years out that will need decades to offer a return to shareholders “in a policy environment where governments around the world are saying ‘we don’t want these products to be used in the future,’” Wirth added.

Refinery utilization in the United States for the week ending October 14 was 89.5% of their operable capacity, the most recent EIA data shows.