Why Tesoro’s Refinery Closed Instead of Chevron’s

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In two words — fuel oil.

Earlier this month, Tesoro announced it was shutting down its one Hawaii refinery. A 3-part analysis by the University of Hawaii Economic Research Organization released today explains that the main reason Tesoso’s refinery went down instead of Chevron’s is because of fuel oil — and how much of it Tesoro produced. 

Excerpts from UHERO’s report: 

Tesoro’s refining operation yields a larger share of fuel oil (35%) than Chevron (20%). Due to renewable energy developments and energy efficiency enhancements, fuel oil demand is shrinking as the demand for fossil fuel-based power generation declines. To cut it’s fuel output, Tesoro was forced to continuously lower its refinery’s utilization rate. In 2010, Chevron operated at around 85% utilization rate, while Tesoro’s stood at around 75%. 

Read the analyses for yourself:

– Part 1: Hawaii’s Oil Market

– Part 2: Why did Tesoro close instead of Chevron?

– Part 3: How will this affect gasoline and other prices?


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