Houston Chronicle

Gulf Coast refiners and Texas oil producers are poised to reap a substantial windfall from a shift to cleaner fuels in the shipping industry that would dramatically hike demand for diesel fuel and the lighter grades of crude oil produced in the Permian Basin and other Texas oil fields.

In less than a year, the International Maritime Organization, a United Nations agency that oversees international shipping, will impose new pollution rules that will force most of the shipping industry to shift from a cheap, dirty fuel with high sulfur content to low-sulfur, cleaner burning marine fuels made with diesel. Analysts say the shift could significantly boost demand for diesel – by as much as 20 to 30 percent.

Gulf Coast refiners expect to see profits soar after decades of building some of the most complex refineries in the world that can produce diesel and lower sulfur products without having to add substantial capital upgrades. The U.S. Energy Department predicts that refineries could see their profit margins for diesel jump 35 percent in 2020.


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