Existing refineries have been running at or near full capacity since the mid-1990s, but are failing to meet daily consumption demands. Yet there hasn't been a new refinery built in the U.S. since 1976. Why? Several factors: Building a refinery is expensive, there are a lot of environmental restrictions on where and how they can be built and nobody wants to live near one. One company, Arizona Clean Fuels, has been trying to construct a refinery in the Southwest since 1998. Getting a permit to build took seven years, and the company twice changed the plant's proposed location because of environmental restrictions and land disputes. The refinery is projected to have a $3.7 billion total price tag. The EIA recorded per-barrel profits of $5.29 in 2006; at that rate, the 150,000-barrel-per-day refinery would need to operate for almost 13 years before its profits outweighed the cost of building it. -------- The entire article is quite short, and I recommend it to anyone interested in solutions to the current gas problems in the US. The bottom line is that there is not just one reason why the US doesn't have more oil refineries, and it seems unlikely that we will have, unless the rate of return on investment in refining goes up a great deal. (In fact, the rate of return would have to almost double to meet margins in other aspects of the industry.)
Posts: 16610 | Location: Lincoln Place, Granite City, IL, USA | Registered: 06-03-02
Does there come a point where the costs of environmentalism outweigh the benefits?
And companies like Chevron will have to do a lot better than double its refinery margins if its trend of losing money in refinery operations (third and fourth quarters of 2007) continue. While the present is bright, there are signals that the road could be bumpy for major oil in the future.
Posts: 7617 | Location: in the backwoods of North Carolina | Registered: 06-07-02
"Does there come a point where the costs of environmentalism outweigh the benefits? "
I don't know Fuse. In dollars and cents, what is the value of clean air and water?
About 15 miles north of me, there is a city with a couple of oil refineries. Once a year, the high school there hosts a big wrestling tournament. For as long as anyone can remember, wrestlers bring their own water. (Wrestlers drink a lot of water right after they weigh in; sometimes, it's the first liquid you have had in 24 hours.) The refineries have never, to my knowledge, been shut down for any length of time by the EPA. That story was originally told to me by a guy who wrestled in the mid 1950s (Blackie Trkovitch's son). The water was like that when I wrestled in the mid 1960s. A friend became the local high school coach in the mid 1980s. When I asked him if it was still true he just rolled his eyes and said that it was worse than when he wrestled in the late 60s. It was still like that when my son was in high school, 1998-2002.
Does anyone want to volunteer to have lousy water in their city so that everyone can have slightly cheaper gas?
Posts: 16610 | Location: Lincoln Place, Granite City, IL, USA | Registered: 06-03-02
Originally posted by DorianGreyed: Does anyone want to volunteer to have lousy water in their city so that everyone can have slightly cheaper gas?
Not me. Water is essential that oil.
Are there modern methods and other locations that would be more suitable for refineries? If they are all "somewhere else" then we will simply accept being dependent on foreign refineries and, at the rate things are going, foreign supplies.
What about nuke plants? I am not upset at all that there are some close to me. Of course, I didn't live through Three Mile Island, but understand the technology is now much improved.
We really can't complain about something on one hand, and then prevent solutions on the other, can we?
Posts: 7617 | Location: in the backwoods of North Carolina | Registered: 06-07-02
