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 something that is about to happen. This could boost companies that are currently struggling in a coronavirus-affected market.
Fuel demand has plummeted due to coronavirus-induced restrictions on global movement. Travel bans have significantly reduced demand for gasoline and jet fuels. To overcome the recession, several oil refining companies reduced the rate of operation at their facilities.
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Some are even closing their factories permanently 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 refining company in the US, Marathon Petroleum Corporation, also plans to close two crude oil refining plants located in California and New Mexico due to low demand for fuel.
Some companies chose 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 expected to become the largest biodiesel facility in the world, using used cooking oil, soybean oil and animal fats as inputs. The project will be developed in accordance with California's strict fuel standards.
Source: agrolink
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