This browser does not support the Video element.
LyondellBasell says it will shutter its Houston refinery, after it's unable to find a buyer
At a time when gas prices are near all-time highs, the owner of one of the oldest refineries in the region says it is set to close the facility.
HOUSTON - At a time when gas prices are near all-time highs, the owner of one of the oldest refineries in Houston says it is set to close the facility.
PREVIOUS COVERAGE: LyondellBasell announces plans to close Houston refinery
LyondellBasell has been looking for a buyer for the facility, which has been in operation under several owners since 1918.
The company says it can't afford to wait any longer. The mid-sized Houston refinery can process 263,000 barrels of crude oil, daily, into fuels and petroleum products. About 500 people are employed at the 700-acres site.
RELATED: Oil executives testify before Congress about 'controlling' gas prices
In a statement announcing the company's exit from the refining business, interim CEO Ken Lane said:
"These decisions are never easy, and we understand this has a very real impact on our refinery employees, their families, and the community. We are committed to supporting our people through this transition."
RELATED: Record diesel prices put a pinch on Houston's trucking industry
Houston oil analyst Andy Lipow says the announcement is not much of a surprise.
"This is the third refinery on the Gulf Coast that is being shut in the last couple of years," he explained.
This browser does not support the Video element.
Midland or Moscow? New challenges from oil producers in West Texas
Industry leaders are putting more emphasis on domestic oil production rather than relying on foreign countries to heat our homes and fill up our gas tanks.
A new refinery has not been built in the U.S., since the 1970s. As LyondellBasell has been unable to find a buyer for the refinery, the cost of operating the facility has steadily increased.
World events have helped push oil prices above $100 a barrel, which refiners that don't produce their own oil, like LyondellBasell, have to buy on the open market. It also leaves a thin financial margin in an environment that is less and less tolerant of fossil fuels.
"In conjunction with government policies that are looking to use more renewable fuels, they say they can't justify spending hundreds of millions of dollars to stay in business, in an environment where their demand is declining," says Lipow.
This browser does not support the Video element.
Oil prices soar amid invasion of Ukraine
FOX 26 Business Reporter Tom Zizka has more as the price of oil is increasing and how you'll feel it at the pump.
LyondellBasell says it expect to shut down refinery operations by the end of 2023, so it can focus on decarbonization goals, and its chemical business.
Analysts say there is a possibility that an operator may come forward to buy the facility, and continue refining, for a price that is lower than LyondellBasell was asking.