Chevron Exec: Ethanol Means No New Refineries

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Chevron Exec: Ethanol Means No New Refineries

WASHINGTON -- A top Chevron Corp. executive recently told The Associated Press that the push to displace as much as a fifth of the country's gasoline with ethanol will make it less likely the industry will build new domestic refineries, which will contradict the goal to gain greater energy independence from imports.

"We'll take all the ethanol that corn growers produce. We'll use that enthusiastically" as a 10-percent blend with gasoline, Peter J. Robertson, Chevron's vice chairman, said. But he questions whether a 20-percent reduction in gasoline use, largely by substituting ethanol, can be achieved by 2017 as President Bush has urged.

The push for greater use of ethanol -- now made from corn, but presumed to be produced from switchgrass and other cellulosic sources in the future -- has been framed largely in the context of a need for greater energy independence from imports.

But so has the need for more domestic refineries.

Some Republican lawmakers have cited the shortage of U.S. refining capacity as one reason for high gasoline prices, and the recent run-up in gasoline costs has been partly linked to unexpected refinery shutdowns, according to the AP.

No new U.S. refinery has been built since the 1970s. And while larger refineries have been expanded, U.S. demand for gasoline consistently requires some imports.

When asked if the company might invest in a new U.S. refinery, Robertson answered: "Why would I invest in a refinery when you're trying to make 20 percent of the gasoline supply ethanol?"

Robertson said Chevron supports expanded use of ethanol and is "not in any way threatened" by the corn-based fuel. "But it has implications for investments in the United States in refining," he acknowledged, because less gasoline will be needed.

Chevron is a partner in a new refinery project in India, is expanding a South Korea refinery and recently increased capacity at a Mississippi refinery, its spokesman said.