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RCE wrote:
wrote in message
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Del Cecchi wrote:

How about the outer continental shelf and gulf of Mexico? I believe
the
argument relates to how much area is off limits. And how many new
refineries have been built in the last 20 years?

del


The fact is that no oil company has even proposed the construction of a
new refinery in a very long time. It is in the oil companies' best
interest to limit the number of refineries, and many of the major oil
companies are more concerned with shutting down their existing
refineries than in establishing new ones. There was a well publicized
case where one of the major oil companies announced it was shutting
down a refinery. An independent oil company stepped forward and offered
to pay fair market value for the refinery, (mega millions) but the big
oil company declined and said that it would rather bulldoze the site.
That should tell us all that there are more mega-millions to be made by
tearing down a refinery than by operating it or selling off the
equipment to somebody else who would.

You often hear the radio rabble rousers blame "the liberals" for
preventing the establishment of new oil refineries in the US, but the
oil companies have no collective interest in increasing refinery
capacity. Just try to find a current example of an application to build
an oil refinery of any type, let alone one that is being blocked by
"liberals". :-)


I watched an interview the other day with a big-wig from one of the major
oil companies (forget which one, but it doesn't matter). He claimed that
the environmental objections and permit obstacles were the major reasons
for
the lack of new refineries in the US. He claimed that mucho dollars were
being spent to upgrade and make more efficient existing refineries as the
permitting process is not as complex.

So ... who to believe?

Also have to think about electrical energy. Power companies didn't stop
building nuclear power plants because they wanted to limit the supply of
electricity. They stopped because it became cost prohibitive to go
through
the permitting and construction process.

RCE


The deliberate reduction of refinery capacity by the oil companies has
been a matter of policy for over a decade.

For instance:

"As observed over the last few years and as projected well into the
future, the most critical
factor facing the refining industry on the West Coast is the surplus
refining capacity, and the
surplus gasoline production capacity. The same situation exists for the
entire U.S. refining
industry. Supply significantly exceeds demand year-round. This results
in very poor refinery
margins, and very poor refinery financial results. Significant events
need to occur to assist
in reducing supplies and/or increasing the demand for gasoline."
Internal Texaco document, March 7, 1996

"A senior energy analyst at the recent API (American Petroleum
Institute) convention
warned that if the U.S. petroleum industry doesn't reduce its
refining capacity, it will never
see any substantial increase in refining margins...However, refining
utilization has been
rising, sustaining high levels of operations, thereby keeping prices
low."
Internal Chevron document, November 30, 1995


Complete attribution of those "internal documents" and more of the
story from a US Senate investigative report, (now a few years old but
obviously still relevant):


tp://wyden.senate.gov/leg_issues/reports/wyden_oil_report.pdf


You can read just exactly how the major oil companies deliberate
closing of US refineries took nearly 900,000 bbl per day of refined
product off the US market in an admitted effort to increase the gross
margins on refined product.

All of which impacts the costs involved with operating a boat, lest
anybody think we're drifting too far off topic. :-)


There is still probably enough refining capacity in the US. Unfortunately,
with all the government mandated blends for different areas, all that
capacity can not be used. When there was a refinery fire a couple of years
ago in SoCal, there was lots of excess gas in Arizona. Could not be sold in
California. Wrong blend! As to the fires, lots of them were caused by
government mandated MTBE. The stuff is a fantastic solvent. Ate up seals
in 3 months that normal fuels did not affect in a year. And the Shell
refinery near Bakersfield that was turned down for sale. How much cash was
to be presented? How much was the credit required from Shell? How much
liability for the ground was to assumed? The last one is probably a major
one. 10 years down the road and the buyer turns the land into condos. How
much will Shell be sued for when the toxic waste is "discovered"?