By ALISON SIDER
Phillips 66 CEO Greg Garland said Wednesday that lawmakers
need to change course before increasing the amount of ethanol required to be mixed into
gasoline, an issue he says affects the entire refining industry.
Calling it an "unworkable mandate," Mr. Garland said the ethanol-blending-requirement level
shouldn't be increased.
He said the US Environmental Protection Agency's
proposal to require refiners to add more ethanol to the fuel,
coupled with flat or declining demand in the US for gasoline,
means the industry as a whole is likely to hit the so-called
blend wall by 2014, a point after which refiners say more ethanol can't be added to the fuel
"There's broad agreement there's an issue but not how to
solve it," Mr. Garland said.
Mr. Garland made his remarks to reporters ahead of the
company's first shareholders meeting since it spun off from
ConocoPhillips last year.
Mr. Garland said he expects the proposed Keystone XL
pipeline, which would bring crude from Canada to the Gulf
Coast, to be approved, but likely not this year. Last month,
TransCanada pushed back the start date for the pipeline to the
second half of 2015 as it awaits the US State Department's
decision on whether to approve the project.
"When I back up and think about North American energy,
Keystone should be an important part of that," Mr. Garland
said, noting Phillips 66 hasn't subscribed to any capacity on
He said US refining capacity is equipped to
handle growing North American crude-oil production for the next
several years, but in the long term the industry will have to
start thinking about undertaking projects to expand capacity.
Though he said Phillips 66 will "always be in the refining
business," Mr. Garland said the company is focused on growing
its other segments -- transportation, logistics, midstream, and
chemicals, which he said are growing more quickly than
"Ultimately, we see refining itself being less than 50%
of our income stream," he said.
Dow Jones Newswires