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Energy Execs Tell Granholm Shuttered U.S. Oil Refineries Won’t Restart

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

The 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.

By Julianne Geiger for Oilprice.com

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  • Jim Bailey on November 02 2022 said:
    With all the record profits the Oil companies just made, they should be required to make more capacity or have record profit taxes imposed.
  • Missy Wanderer on October 28 2022 said:
    Mike,

    Why would they spend all the money to reopen a refinery when the EPA and the rest of the administration is dedicated to shutting them down? Not to mention all the environmental groups that would be waiting in the wings with lawsuits to tame judges. They sheer amount of time & costs in court make it futile.

    The same goes for trying to build a new refinery.
  • Mike Zimmerman on October 26 2022 said:
    Based upon the gentleman's comments regarding the restarting of shuttered oil refineries; it would seem that a windfall profits tax of 15% to 20% would be a good idea. Another thought would be to eliminate the billions in subsidies the oil and gas industry get from our federal tax dollars every year. Instead, that money could be directed towards families making under $125,000 combined a year. Perhaps that money could be also better directed towards families purchasing hybrids or plug in hybrid vehicles. Then perhaps they would be more inclined to bring those shuttered oil wells back online!!
    So very glad I drive a hybrid that averages around 40 mpg overall and gets 46-48 mpg on trips.
  • Ian St. John on October 26 2022 said:
    The logic is to 'create' a shortage during peak times such as long weekends so that prices balloon. It is called 'semi-monopoly' economics as compared to 'competition'. As alternatives flourish, the oil companies have to tighten the supply chain to keep those big price hikes.

    i.e if refineries are at 85% capacity and there is a 150% surge in demand (long weekend) there is going to be big price hikes that weekend.
  • Billy Eastman on October 25 2022 said:
    The thinking that there will never be a new refinery built in the USA is false there is a company that is going to build a new state of the art refinery either in oklahoma or Texas

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