NYT,pg1: No New Refineries in 29 Years? There Might Well Be a Reason

[DeepModem Mom]

No New Refineries in 29 Years? There Might Well Be a Reason
By JAD MOUAWAD
Published: May 9, 2005


About 100 miles southwest of Phoenix, in a remote patch off Interstate 8, Glenn McGinnis is seeking to do something that has not been done for 29 years in the United States. He is trying to build an oil refinery.

Part of his job is to persuade local officials and residents to allow a 150,000-barrel-a-day refinery in their backyard - no small task. Another is to find investors ready to risk $2.5 billion in a volatile industry. So far, the effort has consumed six years and $30 million, with precious little to show for it.

Oil industry analysts and trade organizations like the American Petroleum Institute say they know of no one else doing the same thing.

Even so, Mr. McGinnis - an industry veteran who joined Arizona Clean Fuels last year as chief executive to give the project more heft against long odds - cleared a significant hurdle recently when Arizona awarded him a crucial emissions permit. Still ahead are countless rounds of negotiations with local, state and federal agencies to secure dozens more permits.

Meanwhile, the 1,400-acre site picked for the refinery, an old citrus grove near the Mexican border, remains empty, a sign of why the United States is now grappling with an acute shortage of plants that can refine the more than 20 million of barrels of crude oil that the country consumes every day....


http://www.nytimes.com/2005/05/09/business/09refinery.html

[spooked911]

1. Interesting. Competition is the reason according to the article

although some would say peak oil is why no new refineries have been built.

[Kagemusha]

4. Hey, for most of those 29, oil was dirt cheap compared to now.

Adding more refining capacity with brand new refineries (which would be an improvement over expansion of existing ones in terms of total production, I'm sure) was not in the interests of the industry as a whole.

Now, well, not just the price of oil but, supply AND demand are both higher, so a refinery shortage can exist. Having said that, it's hard to argue that this shortage is the reason for the current price of oil. That makes little sense.

[htuttle]

2. So the all-powerful environmental movement is to blame, eh?

Sure, the environmental movement has been nearly omnipotent over the last 29 years, right? Look at all the advances in their agenda that have been forced through over the objections of the poor, hardworking oil industry!

:eyes:

Right. As if the oil industry hasn't gotten anything it wanted from the US government over the last 30 years. Hell, the environmental movement doesn't even have enough clout nowdays to keep mercury out of our drinking water.

I think the oil and energy industry is just holding out looking for more government welfare, subsidizies and loan guarantees. They want us to pay for their refineries, so they can just sit back and make money from them. You watch and see if I'm right.

[AllegroRondo]

3. Its cheaper to upgrade existing refineries

which is what oil companies have been doing for the last 30 years. production capacity HAS increased, even without new refineries.

Its just much easier and more cost effective to expand existing refineries.