Refinery capacity in the toilet.
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Yeah the story for 20 years or so has been that the US has not added any refineries since the 1970’s-80’s.
What no one has mentioned has been that the refiners have done for decades is just add capacity to the refineries they already have—because adding capacity is much much cheaper than creating a whole new refinery from scratch.
The bottleneck now is that most of the refineries are set up for sour crude from places like venezuela. However, most of the crude coming from the baaken eagle ford, the permian basin and everywhere else is light sweet crude.
The refiners won’t build new refineries to refine the light sweet crude. Rather what they’re doing is retooling existing refineries. Because its much cheaper to do it that way.
Right now the big bottleneck is in transporting oil. There isn’t the pipeline infrastructure to handle the new oil so its being moved my rail. That adds an extra 10-12 dollars a barrel to the price of oil. But in places like the baaken, the price of oil at the well head is only about 74 dollars a barrel— so its still cost effective to ship the oil by rail to the east & west coast refineries.
Warren Buffet friend of lear deeder benefits, it great to know people you know in high places....
Indian tribes in North Dakota are building a new oil refinery.
Actually it mostly cuts the well head price by that amount.
Good info and input; thanks for sharing.
They have refinery capacity in Wyoming, why don't they expand that and build pipelines from there to ND and MT?