they're not eager because of the cost of building one given the regulations...it's why they term all new building as "expansion" instead of a new refinery.
I have been hearing this for a long time, I just did a quick google. Here you go. "We haven’t built a new oil refinery in a quarter-century, and we now have only 155 total, fewer than half the number we had in the 1970s." http://www.taemag.com/issues/articleID.15596/article_detail.asp A conservative site at that. another :http://www.nytimes.com/2006/06/08/w...e8bd45f61&ei=5090&partner=rssuserland&emc=rss Most of the closers were due to the consolidating of the oil industry. Here is another sight. Environmental this time. http://www.citizen.org/cmep/energy_enviro_nuclear/electricity/Oil_and_Gas/articles.cfm?ID=11829
very good stuff...this is from the first article you posted: Much of this has occurred because the U.S. has allowed environmental concerns to trump energy needs without sufficient consideration of the costs and benefits..... Mistake Number 3: No New Refineries. As well as getting oil out of the ground, U.S. companies need to turn it into consumer products in their refineries. At 96 percent of capacity, U.S. refinery utilization is now dangerously tight. Over half of our refineries have closed over the past 20 years, none have been built, and total capacity has declined from 19 to 16 million barrels per day. Refinery construction has been halted by environmental and aesthetic concerns; rectifying this mistake will be a vital challenge for the new administration. Even if we continue to rely on oil imports from abroad, we still need our own refineries, so NIMBY (not in my back yard) forces must be moderated.
yea that was from the conservative sight. They had the clearest numbers regarding refinery closers Did you read this: Myth 1: Oil refineries are not being built in the U.S. because environmental regulations, particularly the Clean Air Act, are so bureaucratic and burdensome that refiners cannot get permits. Fact: Environmental regulations are not preventing new refineries from being built in the U.S. From 1975 to 2000, the U.S. Environmental Protection Agency (EPA) received only one permit request for a new refinery. And in March, EPA approved Arizona Clean Fuels’ application for an air permit for a proposed refinery in Arizona. In addition, oil companies are regularly applying for – and receiving – permits to modify and expand their existing refineries.[1] Myth 2: The U.S. oil refinery market is competitive. Fact: Actually, industry consolidation is limiting competition in oil refining sector. The largest five oil refiners in the United States (ExxonMobil, ConocoPhillips, BP, Valero and Royal Dutch Shell) now control over half (56.3%) of domestic oil refinery capacity; the top ten refiners control 83%. Only ten years ago, these top five oil companies only controlled about one-third (34.5%) of domestic refinery capacity; the top ten controlled 55.6%. This dramatic increase in the control of just the top five companies makes it easier for oil companies to manipulate gasoline supplies by intentionally withholding supplies in order to drive up prices. Indeed, the U.S. Federal Trade Commission (FTC) concluded in March 2001 that oil companies had intentionally withheld supplies of gasoline from the market as a tactic to drive up prices—all as a “profit-maximizing strategy.” A May 2004 U.S. Governmental Accountability Office (GAO) report also found that mergers in the oil industry directly led to higher prices—and this report did not even include the large mergers after the year 2000, such as ChevronTexaco and ConocoPhillips. Yet, just one week after Hurricane Katrina, the FTC approved yet another merger of refinery giants—Valero Energy and Premcor—giving Valero 13% of the national market share. These actions, while costing consumers billions of dollars in overcharges, have not been challenged by the U.S. government. Myth 3: The United States has maxed out its oil refining capability. Fact: Oil companies have exploited their strong market position to intentionally restrict refining capacity by driving smaller, independent refiners out of business. A congressional investigation uncovered internal memos written by the major oil companies operating in the U.S. discussing their successful strategies to maximize profits by forcing independent refineries out of business, resulting in tighter refinery capacity. From 1995-2002, 97% of the more than 920,000 barrels of oil per day of capacity that have been shut down were owned and operated by smaller, independent refiners. Were this capacity to be in operation today, refiners could use it to better meet today’s reformulated gasoline blend needs. Profit margins for oil refineries have been at record highs. In 1999, for every gallon of gasoline refined from crude oil, U.S. oil refiners made a profit of 22.8 cents. By 2004, the profits jumped 80% to 40.8 cents per gallon of gasoline refined. Between 2001 and mid-2005, the combined profits for the biggest five refiners was $228 billion. Gutting environmental laws for oil refinery siting will not solve the http://www.citizen.org/cmep/energy_...es.cfm?ID=11829
"But detractors argued that the measure would have little bearing on gas prices and was largely unnecessary, saying that the energy bill passed last year had suitable provisions for refinery construction. They also said oil company executives have told Congress that adding capacity through expansion makes more economic sense than building new facilities, with its risks of community opposition. Company executives have also testified that environmental laws have not impeded expansion plans." sorry, from the second article
pgabs losttexan -- what pgabriel posted is exactly what i'm saying...regulation and the NIMBY's keep any new refinery from being built here. the fact that the EPA hasn't recevied any requests to build a new refinery support that point. at best, the companies can ask to expand their current facilities, or they face an absolute crap-storm. no one wants refineries in their state...no one wants platforms in view of their beaches. but everyone wants cheap oil. what i've been saying in this whole thread is that supply isn't the issue. there's crude out there waiting to be refined. it's that we don't have enough refineries to meet demand, no matter whose fault that is. Richard Branson is talking about building a new refinery in Newfoundland...know why he won't do it in the States?? because he says the regulations here are insane. i read an interview once with him where he said he thought it would be cheaper and easier to build one in France than in the US. frankly, i'm to the point of saying it's time to consider nationalizing the entire industry. i'm sure it would still be corrupt. but i think securing energy is every bit as important as building roads, at this point. and we trust the govt to build roads. we need some govt input in building refineries. right now we're at like 96% capacity or something, right?? that's insane.
The sound you just heard was the collective jaws dropping of the pro-refinery crowd that was nodding along to the rest of your post Don't be going all commie on us, son.
So bascially you guys are admitting bigtexxx is right? I have seen him post numerous times that the U.S. needs more refineries. Even if permits were submitted and approved how long would it take for new ones to actually be built up and running? How many more do we actually need? Where would they be placed? How much harm do refineries actually do to the environment? I am for cheaper oil now since that is our main source of energy but I would really like to see efforts stepped up into alternative fuels and how we can make them more efficient, cheaper, and widely used.
i'm for that too...but the ENTIRE WORLD is oil dependent. we are tapping out capacity to refine. we need more refineries.
We in the U.S. need more refineries or the entire world does? I realize the whole world is oil dependent but how does a nation like Brazil become dependent from all source of oil and they declared about a month ago that they are energy independent from the world, meaning they produce and use all their energy in their nation. I think it has been said before, oil is like a drug and the citizens of the U.S. are hooked. We need to get off of this and move on to better alternatives. I realize that refining capacity is needed because we are not going to do this over night but how much time would be needed to get more refineries up and running to where we actually see and reap the benefits? Most of my other questions still stand as well.
it's a farce. there's no such thing as being completely energy independent. particularly when most nations don't have supply of crude. you answered the question yourself. you said refining capacity is needed because we are not going to do this overnight. exactly. and the people it's most affecting in the short-term...people in lower income brackets who live in this country.
I was listening to an energy sector analyst on some radio program on Sirius the other day. This individual claimed that there is in fact not a major shortage of refining capacity, but more an issue with refineries which can handle specific types of oil such as very heavy brent crude which has high sulfur content. He also claimed that the reason that nobody has built refineries has as much to do with the fact that even today with high gas prices it is an incredibly low margin/low profit business. His bottom line was that most of the cost issues revolve around both the demand relative to the supply coming out of the ground, and the cost increases associated with having to go after less easily accessible oil deposits like the ultra-deep drillings that require new, special equipment, or the shale oil deposits which require extra processing steps. Also, I understand that the environmental groups are all completely flipping out about Brazil’s bio fuels from soybeans, and the fact that it means that they are cutting down more and more rainforests to plant more soybeans. No solution is perfect. Just to be fair it's not a one-way street. Don't get American farmers started on the Canadian Wheat Board.
But how many refineries do we actually need and how long will it take to get them built are other key questions. What impact do refineries actually have on the environment? The reason I ask is because refining capacity issues probably won't be solved overnight either depending on how many need to be built and the length of time it would take those needed. And, if refineries are actually harmful to the environment are the side effects actually worth it? These are things I just don't know about.
exactly, I watched to different documentaries on oil this past week. one was a 60 minutes repeat about the canada oil sands, which I think there is a Houston chronicle article on and the second was a special on the new depths of drilling in the gulf. Basically the costs of drilling in the new depths and the cost of refining the oil from the sand will prevent Americans from ever seeing $1.50 again. The demand is for oil, oil prices have doubled.
artificially. based off fear. not off supply. but if there's crude on ships that can't be refined merely floating around looking for a buyer...there's a refining shortage. that's your supply shortage. not oil.
That right there is what pisses me off the most, people's thoughts and feelings control the price of oil more than anything. If the president of Iran says something negative about the U.S. the price of oil goes up $2 a barrel if he plays nice it drops. Why?
max, no offense, but your taking one statement by a saudi prince and running with it. if that statement was proven, the price of OIL would drop a couple of dollars today.
it's all on fear, pgabriel. i know way too many people in oil companies saying the same thing. it's entirely irrational. the bubble will burst and it will hurt our local economy. and it's far more than just this saudi prince..it's the fact that inventories are as high as they've ever been. you and i are never going to agree on this...but you're Kool and the Gang, anyway!
I think that you are making a mistake of lumping all types of oil into one category. There is definately not a surplus of light, sweet crude. The heavy sulfurous oil or even the oil shale may have slack surplus, but the problem is that while it costs significantly more to turn it into gasoline, the gasoline that results sells for the same price. The problem is that the profits for refining the less pure oils shrinks to such a degree that is is not good business to build a refinery because of the costs and liabilities associated don't make the profits worthwhile. Look at NYMEX crack spread futures. If there was a huge glut of oil waiting to be refined, the crack spread would go way up because of supply and demand -- more customers would mean the refiners could charge more. This has not happened.
If refining capacity is the real concern and issue, I don't see how this will help any. House Lifts Offshore Oil Drilling Ban, Senate Votes Next WASHINGTON - Congress has taken a major step toward allowing oil and gas drilling in coastal waters that have been off limits for a quarter-century. Still, a battle looms in the Senate over the issue. And the Bush administration's support for the legislation, which was approved Thursday by a 232-187 vote in the House, is lukewarm. The House bill would end an Outer Continental Shelf drilling moratorium that Congress has renewed every year since 1981. It covers 85 percent of the country's coastal waters — everywhere except the central and western Gulf of Mexico and some areas off Alaska. Rep. Richard Pombo (news, bio, voting record), R-Calif., a leading proponent for lifting the ban, said he believes a majority of the Senate wants to open the protected waters to energy companies. Asked about White House opposition to some parts of the bill, especially a provision that would give tens of billions of dollars to states that have drilling rigs off their coasts, Pombo said, "I dare them to veto this bill." "They don't like us giving money back to the states. I think it's right," Pombo told reporters after the vote. Forty Democrats joined most Republicans in favor of ending the drilling moratorium. In the Senate, the measure is likely to face a filibuster from Florida senators and possibly others from coastal states that fear offshore energy development could threaten multibillion-dollar tourist and recreation businesses if there were a spill. The Senate is considering a limited measure that would open an area in the eastern Gulf of Mexico, known as Lease Area 181, that goes within 100 miles of Florida. It is not under the moratorium. Even that is unlikely to pass unless its sponsors get 60 votes to overcome a filibuster from the Floridians. Sen. Pete Domenici (news, bio, voting record), R-N.M., chairman of the Energy and Natural Resources Committee, said he would pursue efforts to open the Lease 181 Area. The committee's ranking Democrat, Sen. Jeff Bingaman (news, bio, voting record), also of New Mexico, criticized the House-passed bill, saying it would eventually create "a huge hole in our federal budget and undermine environmental protections on our lands and off our coasts." The House vote was a huge victory for Pombo, two Louisiana lawmakers — Republican Bobby Jindal and Democrat Charlie Melancon — and Rep. John Peterson (news, bio, voting record), R-Pa., who spearheaded the drive to lift the moratorium. Only six weeks ago, a proposal by Peterson to open coastal waters to natural gas development fell 14 votes short. This time, they included a provision that would allow states to keep the moratorium in place if they opposed drilling and changed the revenue sharing so that states' share of royalties would soar eventually as much as 75 percent. The Gulf states where most U.S. offshore energy resources are being tapped, now get less than 5 percent of the royalties. For example, Louisiana's royalties would go from $32 million last year to a total of $8.6 billion over the next 10 years — and even higher after that. The Interior Department estimated that the changes could cost the federal government as much as $69 billion in lost royalties over 15 years and "several hundred billion dollars" over 60 years. The White House issued a statement saying it favors much of the bill but strongly opposes the changes in royalty revenue sharing, which it said "would have a long-term impact on the federal deficit." The Interior Department estimates there are about 19 billion barrels of recoverable oil and 86 trillion cubic feet of natural gas beneath waters under drilling bans from New England to southern Alaska. Supporters of the drilling moratorium argue there's four times that amount of oil and gas available in offshore waters open to energy companies, mainly in the central and western Gulf of Mexico and off parts of Alaska. And they say energy companies are only developing a fraction of the government leases they have available to them. The country uses about 21 million barrels of oil a day. While critics of the offshore drilling restrictions argue the additional oil and gas is needed if the country is to move toward greater energy independence, supporters or the bill fear energy development could despoil coastal beaches and threatens their recreation and tourism based economies. "Our beaches and our coastline is what is critical to Floridians," declared Rep. Jim Davis (news, bio, voting record), D-Fla. "We should not be sacrificing our economy, our environment for a little oil and gas." Pombo countered that drilling still would be prohibited within 50 miles of shore under the bill and states could extend the ban up to 100 miles. He ridiculed the bill's critics as "opposing everything" when it comes to increasing domestic energy production. "You can't say no on everything," Pombo proclaimed. Rep. Lois Capps (news, bio, voting record), D-Calif., said states would have to overcome numerous hurdles to continue the drilling restrictions, including having state legislatures and the government seek such protection every five years.
