U.S. gas makers see financial alternative in getting greener as consumption stays depressed in the course of the coronavirus pandemic and the prospect of extra authorities laws will increase.
Phillips 66 PSX 0.47% mentioned it’s planning to remodel a San Francisco-area oil refinery right into a plant that produces fuels from merchandise resembling vegetable oil and animal fats, which generate much less soot and fewer greenhouse gases.
The conversion, slated for completion in 2024, is predicted to require round $800 million in capital investment and is considered one of a number of related initiatives proposed in current months, as U.S. refiners re-evaluate their businesses in light of Covid-19 and tightening environmental laws.
The coronavirus pandemic has crushed demand for fuels resembling gasoline and jet gas, and lots of count on world oil consumption to stay depressed for years. However appetite for so-called renewable fuel is poised to grow due to authorities laws in locations resembling California which can be designed to scale back greenhouse gasoline emissions.
“The financial circumstances are ripe for it,” Bob Herman, Phillips 66’s refining chief, mentioned of the refinery conversion. He added that the corporate’s San Francisco-area facility isn’t making a living as a conventional refinery.