Just how many refineries have the oil companies wanted to build since 1970

[hedgehog]

Bush keeps saying we're in trouble because regulations won't let refineries be built. As far as I know, the oil companies have been shutting them down ASAP for the last 30 years. I worked at the Mobil refinery in Buffalo and that was shut down because it supposedly wasn't as efficient as newer refineries. (The original refinery on that site was sabotaged by John D. Rockefeller himself to facilitate a takeover by Standard Oil) It seems to me that no company in any industry is interested in building excess capacity, so Bush's statement makes no sense.

[acmejack]

1. He just wants a relaxation of the environmental standards

So they can all cheaply convert to crack sour crude. As it is only a couple of refineries can use the cheaper, more plentiful sour oil.

[hedgehog]

4. The old Buffalo refinery could use that sour crude.

We ran that high sulpher stuff all the time. Somehow that didn't make a difference. By the way, I was there during the blizzard of 1977 and we never shut down.

[alstephenson]

5. And what about those tax breaks???

Hey! I'm a DU newbie (first post) and lovin' it! Bush is preparing us for the massive tax breaks that will be given to the poor oil companies to "encourage" them to build new refineries....WTF???

[Fuzz]

2. And weren't they shutting them down to increase profits?

I seem to remember some internal documents being found recently that showed that many large oil companies shut down refineries to lower the supply so that prices would rise.

[3waygeek]

6. Here's several articles

about said memos:

http://www.commondreams.org/headlines01/0615-02.htm
http://www.libertyforum.org/showflat.php?Cat=&Board=news_business&Number=293951168
http://rawstory.com/news/2005/Group_Internal_memos_show_oil_companies_limited_refineries_to_drive_up__0907.html

[SoCalDem]

8. and to avoid having to meet stricter standards

a lot of the pollution controls were grandfathered in and gave several years for the refineries to comply.. When the deadlines arrived, they just closed up shop and left the mess for the states to worry about,

[BlueEyedSon]

3. Makes no sense to incur the cost of excess refining capacity

when there is hardly any excess extraction capacity....

[stillcool]

7. i read that the small refineries...

were being bought up (forced out) by the big boys so they could control the price. The reason why more refineries have not been built is because the boys don't want competition. SOS

[hedgehog]

9. No - say it isn't so!

Oil companies trying to manipulate the market and create monopolies! That can't be!

[lastknowngood]

10. in reality they have been shutting down refineries as the consolidated

into larger and larger companies. As the big company buys a smaller one it shuts down the smaller refinery and pushes their own to max output and everything is dependent on just in time product. It's a house of cards bent on destruction.

[snippy]

11. None. The return on capital is very low. Pitiful in fact.

For much of the last 30 years the return on capital for building a new refinery was less than short term CDs earned. It has only been in the last 4 years, following many mergers and acquisitions, that the refinery business has become more profitable. I saw the head of the National Petrochemical and Refiners Association recently on television and he said that there was very little, if any, interest among members of the NPRA in building new refineries because of the low return on capital. However, he did say that they would like to see a relaxation of environmental rules to allow more expansion of existing refineries. He also said that the different blends of gasoline required in different parts of the country had no effect on refining capacity or the supply of gasoline.