- Posted by Marina
The energy sector is changing its dynamics amid current market volatility. This is evident from the current transition pattern observed across the western United States. The conversion of several crude oil refineries into renewable fuel plants is about to happen. This could boost companies that are currently struggling in a market affected by coronavirus.
The demand for fuels has plummeted due to the worldwide circulation restrictions induced by the coronavirus. Travel bans have significantly reduced demand for gasoline and aviation fuels. To overcome the recession, several oil refining companies reduced the operating rate at their facilities.
Some are even closing their factories for good and abandoning excess capacity because of lower margins. Last week, Royal Dutch Shell said it plans to permanently close an oil refinery in the Philippines. The largest US refining company, Marathon Petroleum Corporation, also plans to close two crude oil refining plants located in California and New Mexico due to low fuel demand.
Some companies have chosen the path of survival through transformation. Last week, we reported that Phillips 66 announced the conversion of its refinery in Rodeo, California, into a dedicated biofuel processing plant. Phillips 66's Rodeo Renewed project is set to become the largest biodiesel facility in the world, using used cooking oil, soy oil and animal fats as inputs. The project will be developed according to strict California fuel standards.