Interesting that a European industrialist would say that the US is too regulatory to justify building a refinery here. That he would have better success in France! Time to wake up to the crisis and get some plants built here. http://finance.news.com.au/story/0,10166,16600216-31037,00.html Virgin plans oil refinery From: Reuters By Deepa Babington in New York September 14, 2005 THINK you are upset about high gas prices? Maverick British entrepreneur Richard Branson is so furious he wants to build his own oil refinery. Like the rest of the airline industry, Mr Branson's Virgin Atlantic Airways has been stung by higher jet fuel prices and was forced to raise fuel surcharges for the second time in four months. Hurricane Katrina sent oil prices soaring to $US70 a barrel because it shut several US Gulf Coast refineries, which turn crude oil into products like diesel, gasoline and jet fuel. "If we don't start now to get more refineries built then fuel prices could literally rocket to $US100-$US200 (per barrel of oil) and the world economy would come to a grinding halt," Branson said in an interview on financial news network CNBC overnight. Mr Branson did not say where he wants to put his refinery, but some analysts said he should not look to the US, where no one has built a refinery in 29 years. "My immediate reaction to that is: Not in the US," said Paul Flemming, oil analyst at Energy Security Analysis Inc. "That's definitely more pie in the sky than anything." In the US, getting a permit could involve years of navigating local, state, and federal regulations and protests from environmental and community groups, analysts say. But they note that people in other places would not be too keen to have an oil refinery in their backyards. "If you're talking about a 400,000 barrels per day refinery next to a French Chateau in the Loire valley, the timeline is infinite," said Tim Evans, senior oil market analyst at IFR Energy Services. "If you're looking at an industrialised part that already includes an oil refinery, it's much less of a big deal." Mr Branson said plenty of places would welcome the jobs that a new refinery would create. "Some people will kick and scream, but they may be the same people screaming about the fact that they're having to pay enormous prices every time they get into the car." But building a refinery to ease high fuel prices would be far from a quick fix: any refinery would take at least four or five years to build, if not longer. And according to Energy Security Analysis' Flemming, another refinery would not ease record high crude oil prices as Branson suggests, since it would not increase actual crude oil production. Mr Branson's idea does have some fans, however, among those concerned about the lack of competition in the refining industry, which is dominated by a few large companies. "The oil companies themselves aren't interested in building new refineries and will tend to denigrate the chances of any new investors actually succeeding in their business," said Mr Evans of IFR Energy Services. "They'll say, 'What does Richard Branson know about oil refineries?' He doesn't have to know about that part of the business, but he can easily see that oil refiners are making a margin far superior to what he's making in the airline business."
Hmm.... I'm Shell Oil company, and I'm making a killing because we can't process enough oil to ease demand, let me spend a 600 million on a new refinery so I can make less profit... please
Actually, you can make a ton off a new refinery because other oil companies would also beg to use it since there's such a shortage of them. One of the main reasons why no one builds them anymore is that their huge negative environmental impact means that no community wants one built near them. And sadly most of the US population lives near coastlines where any new refinery would be built. American regulations aren't actually that restrictive compared to France, its just that local resistance is so much greater here than any other country so state and local governments do whatever bureaucratic bs they can to hold projects up.
Its irrelevant. You'd still make money on an ongoing basis b/c there is limited supply. Its not like you are suddenly increasing supply 10x. Yeah prices would go down...but say you're conoco...you still make more money...the industry as a whole might make less, but you as an individual company would make more b/c now you are refining more oil...(This is all predicated that at these margins the refinery would earn the required return on capital, etc....)
One big question is whether there really is enough crude to keep all the refineries running at max for enough time to make a good profit.on a huge investment. If it was such a no-brainer, don't you think someone else would have done it? Branson is an airline guy, so it iis hard to know if he is right.
Branson is an airline guy? Please do some research before babbling nonsense, glynch. Thanks in advance. Thank an environmentalist for our refining shortage - there is plenty of oil to keep them running.
If there's enough oil to keep em running say 30 years, it should be fine.....I mean when you do your analysis of it, cashflows 30 years from now don't factor into your decision so much b/c the net present value of those $ is so little... I think Branson's a fairly intelligent guy (more marketing savvy than anything) but it might take really someone outside the industry who is more of a risk taker to do this....though in the US, I think it will be tough unless its some poor part of the country that just wants the jobs...
Would you want an oil refinery one mile from your home? Most of the people who block construction of plants are groups who will be living in close vicinity to them, not environmentalist and most people who complain about the obstructionist don't.
wrong remember oil was a tiny fraction of current prices for most of the past 25 years it wasn't profitable to build new refineries, add to the cost prohibition the other things people have mentioned (environmental laws, unpopular to locals) and you get much more complex issue than you try to make it out to be
LOL - care to explain why it wasn't profitable? Perhaps threat of environmentalist lawsuits? Perhaps laws enacted in places like Kalifornia that increase the cost of building a refinery? Please think through your posts before addressing me. Thanks in advance.
Even O'Reilly has turned against the 'profiteering' oil companies, and that should tell you how much 'price gouging' is going on. Big Oil is smart and shrewd, it will do whatever it feels will achieve maximum profit.
Of course there is enough oil ~ do you actually still believe that oil is a fossil fuel and not naturally produced by the earth?
