LONDON - An international pact and U.S. legislation to tackle climate change will hit oil refiners' profits and may force some to shut some capacity, Thomas O'Malley, chairman of Swiss refiner Petroplus, said on Thursday.
Leaders from 190 nations will meet in Copenhagen in December to try to hammer out a new pact to fight global warming.
A key U.S. Senate environment committee approved a Democratic climate change bill on Thursday that would require ind
A key U.S. Senate environment committee approved a Democratic climate change bill on Thursday that would require ind ustry to cut emissions of carbon dioxide and other greenhouse gases 20 percent by 2020 from 2005 levels.
Actions on the climate bill and the climate front will lead to further idling of capacity, O'Malley said.
When I worked on the number, I think the Atlantic Basin is going to lose about 2 million barrels per day of capacity between the beginning of 2009 and the end of 2011. But I think it may happen well before 2011.
A report from energy consultancy Wood Mackenzie said in October that purchasing pollution credits might cost U.S. oil refiners $100 billion a year.
Such estimates in Europe are not yet available publicly.
O'Malley said some European refiners have already been forced to close some refining capacity temporarily or permanently as a lack of demand for fuels such as gasoline, diesel and heating oil batter their profits.
Petroplus itself has idled its Teesside refinery in the UK since March, which is currently operating as an oil depot. The company reported on Thursday a larger than expected third-quarter loss.
O'Malley sold his previous venture U.S. refiner Premcor Inc to Valero in 2005 and joined Petroplus in 2006, when global refining margins were at historic highs, making the company the largest independent refinery in Europe through acquisition.
(Reporting by Ikuko Kurahone and Emma Farge; editing by Sue Thomas)