Chevron (NYSE:CVX) CEO Mike Wirth said Friday that he does not expect another oil refinery will be built in the U.S. ever again, due to decades of federal government policies.
“We haven’t had a refinery built in the United States since the 1970s. My personal view is there will never be another new refinery built in the United States,” Wirth said in an interview with Bloomberg.
“You’re looking at committing capital 10 years out, that will need decades to offer a return for shareholders, in a policy environment where governments around the world are saying we don’t want these products,” Wirth said.
“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,” according to Wirth. “And the stated policy of the government for a long time has been to reduce demand for your products.”
Refining margins have exploded to historic highs on surging demand for gasoline and diesel; according to the latest data from AAA, the average price for a gallon of gasoline in the U.S. hit a new record high of $4.761 on Friday.
Chevron (CVX) also said Friday that it expects costs will increase ~10% next year, as economic pressures on equipment and labor shortages continue to hurt the oil industry, according to presentation slides at Bernstein Strategic Decisions Conference