Refineries Are Fighting over Used Cooking Oil and Animal Fat
by Haley Zaremba (OilPrice.com) … In the absence of gasoline demand, refineries have been casting around for alternate solutions to keep their plants up and running, and it looks like they may have found the answer: biofuels. Early on in the pandemic’s trajectory, things looked just as bad for the biofuel sector as nearly every other economic sector – which is to say, pretty dismal. While it may seem like fossil fuel and biofuels would be natural competitors, the oil price crash actually posed a great threat to biofuel markets as well.
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Now, however, the tide could be turning for biofuels thanks to oil refineries’ newfound thirst for fuel production of any form.
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“Refiners like Phillips 66 are turning to biofuels and the valuable government credits that come with them to prop up sagging revenues as a surge in the coronavirus cases drives renewed government restrictions and lower demand for gasoline and diesel,” the Houston Chronicle reported this week in an article headlined “With COVID dragging down gasoline demand, refineries look to biofuels to prop them up.”
At present, the profit margins on biofuels are too tempting for many oil refineries to overlook, especially with peak oil looming right around the corner. In fact, there is such a rush on used cooking oils and animal fats that some renewable refineries have reported having trouble procuring these once worthless feedstocks. On top of making good financial sense, there’s also the fact that jumping on the ESG investment train is more buzzworthy and marketable to shareholders than ever. This is highlighted by the statement of Phillips 66’s CEO Greg Garland who referenced their nascent Bay Area refinery-turned-biofuels plant as “a great example of how Phillips 66 is making investments in the energy transition that will create long term value for our shareholders.” READ MORE
