Granholm on Companies Cutting Refinery Investment: We’ve Hit ‘Peak Gasoline’ Demand

On Friday’s broadcast of CNBC’s “Squawk Box,” Energy Secretary Jennifer Granholm responded to companies shuttering refineries by stating that there are “significant policy incentives to the creation of drop-in biofuels, so you’re seeing some of that happening.” And that “we have achieved peak gasoline” demand.

Co-host Becky Quick asked, “Secretary, we’ve talked a lot about what’s been happening with ExxonMobil and Chevron as well, walking away from basically the refinery situations, their operations in California. They’ve taken massive write-downs in the last several days, to the tune of billions of dollars. Mike Wirth was on talking about this last night, and mentioned that the situation in California is largely because of California policy. I realize that’s not a federal policy, but when you look at California and the gas prices there, it creates unhappiness with the consumers. They’ve basically said, we can’t continue to make investments in some of these operations, whether that be the refineries or the pipelines, because we don’t think we’ll get the return on investment. When they say something like that and you have multiple big companies basically walking away from some of these things, what does that mean? What can you do on the federal level?”

Granholm responded, “Well, it’s interesting, because I think there [are] a lot of those who have refineries who are converting some refineries, anyway, to biofuels. There [are] significant policy incentives to the creation of drop-in biofuels, so you’re seeing some of that happening. The refineries that are around the country are working full tilt and are producing. So, we are — but I will say this, Becky, we are seeing, in the United States, we think that we have achieved peak gasoline, because of the increase in electric vehicle sales. And obviously, this is just the U.S., other, more developing countries will — are still looking at significant — potentially significant — but lessening so, increase in demand. But, in the United States, we’re seeing a leveling out and a diminishment of the demand for gasoline, and we just got the numbers yesterday for the sales of electric vehicles. … [I]n 2023, 1.4 million sales of EVs. That’s a 50% increase from the year before. That’s going to have an impact.”

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