Western Oil Refineries are Converting into Biofuel Plants

Massive oil refineries in the western United States are making an unexpected transition. They’re being converted into biofuel plants.

Phillips 66 recently announced it will convert a California oil refinery into a biofuel plant as gas continues to lose some luster to fuels that come from agricultural and waste products. The company’s 120,000 barrel-a-day refinery near San Francisco will become the world’s biggest renewable diesel plant. Before that, fuel giant Marathon Petroleum Corporation announced it may be converting two refineries into renewable diesel plants. Back in June, Holly Frontier Corporation said it’s turning their Cheyenne, Wyoming refinery into a renewable diesel plant by 2022.

Bloomberg said refiners are struggling with depressed demand and an uncertain future because of COVID-19.

However, California may offer a pathway to staying in business because the demand for renewable diesel is surging throughout the state. An industry expert tells Bloomberg that there is “overcapacity” in the refining market. The basic question before refiners now is whether they shut down their plants or will they instead repurpose their operations?

Nick Weinberg-Lynn of Phillips 66 said, “The California market for the renewable diesel product is the largest in the world.” Phillips will invest $700 million to $800 million in the conversion process.

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