Skip to comments.WSJ: Refining Incapacity - Politicians have done as much damage as hurricanes.
Posted on 09/28/2005 5:04:18 AM PDT by OESY
...In 1981, there were 325 refineries in the U.S. with a capacity of 18.6 million barrels per day. Today, there are 148, with a capacity of about 17 million barrels -- though U.S. demand for gasoline has increased more than 20%....
One explanation for this performance is the historically low gas prices over much of the past 20 years; there has often been little incentive to build new capacity. But just as big a problem are onerous and costly regulatory burdens that have sucked profits from the industry. This includes a permitting process that is subject to endless bureaucratic delay and court challenges. The one company that is even considering building a new refinery -- Arizona Clean Fuels Yuma -- has been trying to obtain its necessary air permits for nearly seven years.
Refiners have also had to spend some $47 billion in the past 12 years to meet the demands of, among other laws, the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, the Safe Drinking Water Act, the Oil Pollution Act, the Resource Conservation and Recovery Act, and the Comprehensive Environmental Response, Compensation and Liability Act. And from 2006 to 2012, refiners will be forced to comply with 14 new major environmental programs.
One of those is a rule to reduce sulfur in gasoline, which will go into its final stage next year. The U.S. refining industry will spend $8 billion to comply, and should be able to meet federal deadlines....
The recent energy bill only makes things worse. Its new ethanol mandate, a payoff to Midwest farming interests, will involve complicated refinery changes....
Congressional Republicans are mulling several ideas, including bills that would speed up refinery permitting or convert old military bases into refinery sites....
(Excerpt) Read more at online.wsj.com ...
Government regulation stifles innovation and economic growth. I'm shocked, shocked I tell you.
So, what's new? If the American could not fathom the the Democrat Party was instrumental in restraining refining facilities in the USA, then they deserve to pay every cent they get charged for gasoline and heating oil. The problem lies first with the American voter.
If you like high gas prices, thank an environmentalist wacko.
Might be of interest to your thread.
"Mr Naimi also said that there were "no takers" for more oil right now, as a result of constrained refining capacity. Roughly a quarter of US refining capacity is still shut after Hurricanes Katrina and Rita struck the country's southern coast, but global refining capacity - to turn crude oil into petrol and other products - was struggling to keep up with demand even before that."
Mr Naimi said talk of oil scarcity reminded him of the 1970s, when people also thought the end of the age of oil was at hand. "But in the intervening years, when we were supposedly facing a precipitous decline, world oil reserves more than doubled," he said.
Exxon's Mr Tillerson told the convention in South Africa that his company estimated that global energy demand would increase by 50 per cent over the next 25 years. Mr Tillerson said that by some estimates there was as much as 7 trillion barrels of oil yet to be discovered. On a more conservative basis, the world still had more than 3 trillion barrels from conventional fields, oil sands deposits and other sources. "That is more than twice all the oil recovered up to now in all of human history," Mr Tillerson said.
Basically, crude oil is no use to anybody. You cant put it in a car, said Tony Machacek of Bache Financial brokerage.
Oh, far more!
And Leftist enablers have done far more damage than terrorists.
A fool is more dangerous than a scoundrel. The fools are the scoundrels' enablers.
And the Democrat Party is the Party of BOTH fools AND scoundrels. The scoundrels are the sociopathic leaders. The fools are their enablers.
And never give one penny to an "environmentalist charity".
The construction of a gas turbine electric generating plant in decidedly red state South Dakota took more than a decade, most of that time taken up with the permitting process. A more recent example is a century old dairy farm that has spent nearly three years getting permits and approvals to increase the number of dairy cows. The owners of nearby homes that didn't exist even five years ago are protesting over the smell.
While I agree with your statement, the fact is that despite that the major oilco's are raking in record PROFITS, net, even after complying.
I'm not feeling real sad for them right now....
All we need do is is have the republicans in charge of our government and they will put such things right.
Just as Jimmy Carter's price controls provided the "discipline" that enforced the production limitations decreed by OPEC, our current NIMBY no-new-refinery prohibitions have created a "shared monopoly" for EXISTING oil refiners.
As you implied, why would any "monopolist" want to add capacity?
The answer is (or should be): "For competitive advantage".
Therefore, IF the government would offer a hassle-free site for a new refinery to the "highest bidder" -- there would be quite a few bidders, IMHO.
Ever seen the "donor" list for the eco-maniacs.
Exxon, Shell, BP, etc.
I couldn't decide if it was extortion or a reward.
I am afraid my friend you have been drinking too much Kool Aid these days. American oil companies have built refineries off shore in the Caribbean and South America for the past thirty years. But, it has not been enough capacity. You must also not realize, that with increasing USA population, the demand for gasoline/heating oil keeps increasing, thus requiring more capacity to insure the overall economy keeps moving forward. As far as excess capacity, it can be marketed and sold to a world that is increasing daily into a consumer driven economic environment. Believe me, just as lower airfares increase operating revenue, economy of scale, higher profit margins, etc., so will excess, reasonably priced gasoline increase oil company profits. You must be one of those "Democrats" that believes in raising taxes!!! Get real!!!
Can you explain why then they continue to upgrade and expand the existing facilities? And why an oil company has spent ten years trying to permit a completely new one?
Consider the adventures of Arizona Clean Fuels. The company spent 10 years and $20 million trying to secure all the permits necessary to build a small refinery in the Arizona desert. They cleared the latest hurdle this summer, when they secured air-quality permits from the Environmental Protection Agency. That step took five years.
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