Shark Tank investor Kevin O'Leary has just announced plans to build a new $14-billion refinery in the United States to help America become more energy independent.
The U.S. needs a new refinery as it would not be weaning off fossil fuels for decades to come, the chairman of O'Leary Ventures told FOXBusiness this week.
"Unfortunately, no matter how much you think we're getting off hydrocarbons, it's not going to happen for 50 years," O'Leary said on The Big Money Show, revealing for the first time plans to work on getting a permit and syndicating the funding for a new refinery expected to cost $14 billion.
Referring to the need for hydrocarbons for decades, he added, "I'm sorry, that's just the way it is. You are not going to have a wind aircraft take you across the ocean, that's not going to work."
"At the end of the day, we can make our own energy here very clean. We haven't built a refinery in America in decades because we can't permit it," the Shark Tank investor, also known as 'Mr. Wonderful,' added.
"I'm going to find a state that wants to work with me. I'm going to get a permit and we're going to do the right thing for America. We have to have more refineries," O'Leary noted.
In a subsequent appearance on FOXBusiness, O'Leary said that North Dakota could be one of the options for building the new refinery as it could be easier to obtain a permit there.
"I think I can sell this to America, I really do," he said, referring to the protests expected from environmental campaigners against such a venture.
The U.S. has been losing refining capacity in recent years, while the newest refinery with significant downstream unit capacity is Marathon's facility in Garyville, Louisiana, which came online in 1977, according to the EIA.
Capacity has been added to existing U.S. refineries through upgrades or new construction, but the fact remains that the last major refinery was built in the late 1970s. Related: Guyana To Pump 1.2 Million Barrels Of Oil Per Day By 2027
Meanwhile, refining capacity has declined since 2014.
More than 1 million barrels per day (bpd) of refinery capacity in America has been shut permanently since the start of the pandemic, as refiners have opted to either close losing facilities or convert some of them into biofuel production sites.
Operable refining capacity in the United States hit a nearly decade low in 2022, the EIA's latest Refining Capacity Report showed in June last year.
U.S. refining capacity fell to 17.94 million bpd as of January 1, 2022, according to the latest available EIA data. That's down from 18.09 million bpd on January 1, 2021. U.S. refining capacity is now the lowest it's been since 2014, while 2021 was the second consecutive year of decreasing refinery capacity.
While U.S. refining capacity is shrinking, China and the Middle East are adding more capacity to process crude into fuels as the world and America will run on oil for decades, regardless of when peak oil demand will occur.
Whatever the speed of the energy transition, the world will still need oil and gas for decades, and peak oil doesn't mean the end of oil, analysts and industry professionals say.
Fossil fuels, accounting for over 80% of the world's energy supply today, will continue to be a key part of the mix decades from now.
According to the BP Energy Outlook 2023, oil demand is expected to peak between the late 2020s and early 2030s as the Russian invasion of Ukraine is accelerating investment in clean energy and governments are looking to bolster energy security with higher shares of renewables in the energy mix.
However, BP's chief economist Spencer Dale said, "The scale of the economic and social disruptions over the past year associated with the loss of just a fraction of the world's fossil fuels has also highlighted the need for the transition away from hydrocarbons to be orderly."
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- Why Americans Aren’t Buying EVs
- Russia's Gasoline Exports Jump As African Buyers Replace Europe
- Canada’s Biggest Bank Becomes The World’s Top Financier Of Fossil Fuels