As policymakers move away from fossil fuels, may never be built a new refinery in the United States despite rising gas pricesaccording to Chevron Corp.
“We haven’t built a refinery in the United States since the 1970s,” CEO Mike Wirth said in an interview on Bloomberg TV. “My personal opinion is that another refinery will never be built in the country”.
The President’s Administration Joe Biden has asked OPEC (Organization of Petroleum Exporting Countries) and for US shale producers to pump more crude to help lower gasoline prices. But even if oil prices fell, the US may not have enough refining capacity to meet demand for petroleum products.
Refining margins have exploded to historically high levels in recent weeks amid a smaller offer from Russia and China, and a growing demand for gasoline and diesel.
Y adding refining capacity is not easyespecially in the current environment, Wirth said.
“He’s looking at committing 10-year capital, that will take decades to deliver a return to shareholders, in a political environment where governments around the world are saying: we don’t want these products,” he said. “We are getting mixed signals.”
“We’re still seeing real strength in demand” even though international air travel and Chinese consumption are yet to return to pre-pandemic levels, Wirth said. “Demand in our industry tends to move faster than supply in both directions. We saw it in 2020 and we are seeing it today.”.
Chevron would not be able to instantly increase production today, even if it wanted to, because of considerable lead times to open oil and gas wells, even in short-cycle US shale, Wirth said. Chevron CEO looks forward to meeting with Biden Administration when in Washington next week.
“We need to sit down and have an honest conversation, a pragmatic and balanced conversation regarding the relationship between energy and economic prosperity, national security and environmental protection,” Wirth said. “We need to recognize that all of that matters.”