According to Just the News, Mike Wirth, the CEO of Chevron, recently expressed his opinion that there will never be another oil refinery built in the United States again.
Wirth made his prediction during the recently-held Bernstein’s Strategic Decisions Conference.
“There hasn’t been a refinery built in this country since the 1970s,” he said. “I personally don’t believe there will be a new petroleum refinery ever built in this country again.”
At the conference, Wirth went on to explain why the fact that new refineries aren’t being built isn’t necessarily bad in itself. “Capacity is added by de-bottlenecking existing units by investing in existing refineries,” he said.
The problem, though, according to Wirth, is that this is not what we have been seeing in recent years, particularly during the first year-and-a-half of the Biden administration.
But what we’ve seen over the last two years are shutdowns. We’ve seen refineries closed. We’ve seen units come down. We’ve seen refineries being repurposed to become bio refineries. And we live in a world where the policy, the stated policy of the U.S. government is to reduce demand for the products that refiners produce.
After providing some examples, Wirth added, “At every level of the system, the policy of our government is to reduce demand, and so it’s very hard in a business where investments have a payout period of a decade or more, and the stated policy of the government for a long time has been to reduce demand for your products.”
“How do you go to your board, how do you go to your shareholders and say ‘we’re going to spend billions of dollars on new capacity in a market that is, you know, the policy is taking you in the other direction?” Wirth asked.
This all comes amid the soaring oil and gas prices that Americans have been witnessing in recent months. Gas, for example, recently reached a national average of over $5 per gallon. This weekend, though, for the first time in a while, both the price of gas and oil have dropped, albeit only very slightly.
Many argue that American-drilled oil and gas could get the country out of the current energy crisis if the Biden administration would only allow it — and encourage it — to happen.
But, it seems that the administration is against such a common-sense idea, especially as a long-term solution.
Wirth’s comments would appear to foretell the end of the American oil industry, which is worrying, to say the least. Ending the industry without a suitable replacement could spell doom.