According to Mark Nelson, president of international downstream and chemicals for Chevron, it may seem that refineries are "under attack in today's world, regardless of which region in the world they are located."
"And yet, they are essential to our future," Nelson said. "They are essential to an energy transition that works in multiple [metrics] by which an energy transition should be measured."
Because of that importance, Nelson is confident that "despite the ebbs and flows of headlines and policies, the people who are responsible for refineries are vital to helping find a solution."
"We have to be active in finding a solution, even when it's frustrating, because when it's all said and done, there will be success," he said.
If not for the refineries of today, there would be no energy transition of tomorrow, Nelson said.
"It's really important to set context," he stated. "At Chevron, we believe that all forms of energy are necessary, and they need to be reliable, affordable and ever-cleaner. In that context, we need to invest in today's fuels and continue to invest in tomorrow's fuels."
According to Nelson, some aspects of refining will be "exactly the same a few decades from now as they are today.
"But they have to be reliable, trusted partners in the communities in which they operate and have fantastic operators - people who live and breathe to make refineries work and work really well," he explained.
Those workers must also have the proper tools to continue to produce the fuels of today and tomorrow, Nelson stated. For refineries to continue to produce these fuels, they must embrace some standard realities.
"Two decades from now, we will still need traditional gasoline oil, renewable diesel and sustainable aviation fuel," Nelson said. "But refineries of the future will also begin to have the hydrogen-based crudes that produce lower and lower [amounts of] carbon. We will also produce the hydrogen of the future, and you will also begin to see hydrogen sequestration as part of the overall refineries of tomorrow. We are already producing hydrogen for fueling stations in California."
Regarding the impact that tightening regulations may have on refineries not only in the future but also right now, Nelson explained that he empathizes with policymakers as they grapple with issues of emissions versus global demand for fossil fuels and related products.
"It's been made visible to everyone how hard it is to balance over time," he said. "I think a mistake people often make is to think it's the exact same journey everywhere in the world. Every starting point is different, and every asset and customer need is different. There can be different paths to a solution."
If Nelson was to have a conversation with regulators, he said he would share three vital considerations with them.
"I'd emphasize that policy is best suited to stimulate - stimulate to initiate. And then have a framework that allows the market to bring all of its talents to bear," he said. "I guess that's code, in theory, for setting a price on carbon, but not in the sense that the government should pick winners and losers. When winners and losers are picked, consequences can happen, and that's what you want to avoid.
"It is the energy industry's job to help governments through that journey."
The takeaway, Nelson said, is that refineries must and will play a part in the future of energy.
"With all of the challenges, there are huge opportunities," Nelson said. "When we talk about all of these products that need to be created for the future in a cost-effective way, we can't help but get excited. Now, there are going to be fits and false starts in that journey, but there are solutions here to be found."
