Lets get some Government ran refineries!

[daenku32]

How crazy of an idea would it be to have US government build gasoline refineries? I think this unabashed attempt at a "socialist" program could be defended in the same way as every other "socialist" program in the history: national security!

Our gas stations are already operating at cost while the refineries are amassing profits. We as Americans cannot get the refineries to compete against one and another since we cannot really pick which one to buy from. I say we build up a 500,000 barrel a day government refinery and have it sell gasoline at less than market price as long as demand exceeds supply. That would force some competition to the market.

[MaGZ]

I think it is a great idea; I would be for it. And while were at it, let’s socialize the drug companies and take the profit out of medications so everyone can afford prescriptions. There is nothing wrong with these socialist measures.

[casebro]

No, lets bust up the oligarchy's vertical monopolies. Oil pumpers would sell crude to whichever refiner pays better. The refineries would sell to whoever buys at the best price. The retailers would buy from any wholesaler, whoever has the best price. Retailers would compete for customers. Retailers would not be restricted to a single source. We would have competition at every level.

But who said the retailer losses money now? Worst I heard was they gross 10 cent/gallon. And sell 20,000 gallons per day. So, that $2,000 per day, $60,000 per month. Gross profit. The $2,000,000 station costs about $12k/month. That leaves lots for the owners "salary", plus "expences" like gas in his wife's SUV, plus a bit for the minimum wage crew in the snack shop. Darn, the local corporation barely breaks even.

[corplinx]

All gas in my area comes from the same refinery. My guess is other geographic areas are subject to the same lack of competition.

[geni]

Our gas stations are already operating at cost while the refineries are amassing profits. We as Americans cannot get the refineries to compete against one and another since we cannot really pick which one to buy from.

No but the petrol stations can. You are unlikely to chose the source of flour in bread but that doesn't mean there isn't competition in the flour milling market.


I say we build up a 500,000 barrel a day government refinery and have it sell gasoline at less than market price as long as demand exceeds supply. That would force some competition to the market.

Not really. In any case existing refineries would respond by reduceing investment (no point in spending a large amount to increase capacity by 1% any more).

[Geek Goddess]

How crazy of an idea would it be to have US government build gasoline refineries? I think this unabashed attempt at a "socialist" program could be defended in the same way as every other "socialist" program in the history: national security!

Our gas stations are already operating at cost while the refineries are amassing profits. We as Americans cannot get the refineries to compete against one and another since we cannot really pick which one to buy from. I say we build up a 500,000 barrel a day government refinery and have it sell gasoline at less than market price as long as demand exceeds supply. That would force some competition to the market.
It takes approximately 10 years to build a refinery, from conception through commissioning. Several years of that period of time is working through the environmental permitting, because activists protest the Planning Commission, file numerous lawsuits against the EPA or the state enviromental permitting agencies, and picket like mad. Chevron tried to permit a refinery in California several times, but gave up after all the litigation. Those same groups would picket a government attempt to build a refinery. More refineries would mean surplus capacity, which would mean some competition for feedstocks. They need to run full to make money.

No, lets bust up the oligarchy's vertical monopolies. Oil pumpers would sell crude to whichever refiner pays better. The refineries would sell to whoever buys at the best price. The retailers would buy from any wholesaler, whoever has the best price. Retailers would compete for customers. Retailers would not be restricted to a single source. We would have competition at every level. What makes you think this isn't happening now? Companies build pipelines to the sources, and some locations have multiple places for the producers to sell their crude. Other locations, where the production is lower, or the crude is heavier/sour, have less pipeline capacity. All of the pipelines are running at capacity. The pipeline companies are trying to build more lines. Guess which is the primary group stopping the pipelines? No one wants a crude line running through their community, their wetland, their golf course. It can take a year or two to get rights-of-way permitting and environmental permitting on a thirty-mile line. Or a gasoline or jet fuel line.

When you buy gas from an "Chevron" station, that doesn't mean the gas came from a Chevron-owned refinery. It means it came from a refinery that made a basic gasoline product. A batch was prepared with Chevron's super- secret ingredients, like "Techron" or whatever they advertise, and delivered to a gas station (or more likely, a distributor) who is licensed by Chevron to sell their formulations and use their advertising.

But who said the retailer losses money now? Worst I heard was they gross 10 cent/gallon. And sell 20,000 gallons per day. So, that $2,000 per day, $60,000 per month. Gross profit. The $2,000,000 station costs about $12k/month. That leaves lots for the owners "salary", plus "expences" like gas in his wife's SUV, plus a bit for the minimum wage crew in the snack shop. Darn, the local corporation barely breaks even. I think you meant 'gross revenue.' Where do you get the 20,000 gallon per day in sales?

No but the petrol stations can. You are unlikely to chose the source of flour in bread but that doesn't mean there isn't competition in the flour milling market.



Not really. In any case existing refineries would respond by reduceing investment (no point in spending a large amount to increase capacity by 1% any more).

Most refinery investments are more likely to be spent to increase efficiency and reduce emissions, improve formulations, or cut the fuel costs to produce the products. Of course, any increase in actual capacity must first be...permitted under Title V regulations. A Title V type permit can take up to 12 months for approval, if it is not protested by the EPA or environmental groups or the local community.

There are less refineries today than there were 10-20 years ago, and it is because the refinerer (which are not always the oil producing companies) cannot get through the environmental permitting. With process margins like they are, and the capacities running full blast, they all want to build or expand refineries. They buy oil from the producer, and sell to the jobbers, and so the way to make more money is to process more liquid. It's all about margins.

[Beerina]

It takes approximately 10 years to build a refinery, from conception through commissioning. Several years of that period of time is working through the environmental permitting, because activists protest the Planning Commission, file numerous lawsuits against the EPA or the state enviromental permitting agencies, and picket like mad. Chevron tried to permit a refinery in California several times, but gave up after all the litigation.

And that's basically where we sit today.

Refineries are:


Expensive to build, thanks to litigation
Every year extra because of delays is millions lost in interest alone, which must be made up somehow
Are an endangered species, thanks to oil hatred as the official policy of the government (which, keep in mind, wants to get away from oil.)
Are mandated to include ethanol for environmental reasons = not an oil product = no profit for oil companies


So, if you're an oil refiner/oil company, exactly what is your incentive at this point in US history? Build more, when the government wants the population to use less gasoline? A refinery is not needed to mix in some ethanol.

Work to bust your ass, for what? To make the population happy, so they'll re-elect politicians in Congress who get there kicking you in the balls from one end (getting in the way of refinery construction) to the other (mandating using non-oil products in formulas)

So, if I were them, I'd be doing exactly what they are -- saying a big Screw You! to the Congress and the "people" who elect these ignorant, power hungry clowns.

[Beerina]

"You want us to make more refineries when, in a few years, gasoline use decreases, and our new, extra refining capacity becomes useless? Capacity we just spent billions on expanding, and have no way to recover anymore? Forget it, pal."

Julian Simon (http://juliansimon.org) is right, again. And nobody learns. Again.

We are producing more oil than ever before, and have more known reserves in the ground than ever before, including "years into the future to use it up" projections, yet it's expensive. Why? Government meddling.

It never fails to astonish me how people who are such vast critical thinkers in other arenas (religion, conspiracy theories, Nessie & pals, etc. ad nauseum) flop right over to "long string of words arguments" in the political arena -- something they rightly and easily reject in all those other realms. "Put up or shut up" works here, too, just as well as it works for Big Feets or Sylvia or any challenger.

[Geek Goddess]

Are mandated to include ethanol for environmental reasons = not an oil product = no profit for oil companies

Recently released research (in fact, they were talking about it on Science Friday/NPR just a couple weeks back) has shown that although ethanol may result in lower carbon emissions, it actually increased NOx (various oxides of nitrogen) that are poisonous, cause more problems with asthma and other respiratory problems, increase formaldehydes and other carcinogens, and increase ground-level ozone. The scientists interviewed talked of the models showing that in most urban areas, like LA, that the net health effects will be worse for an average fuel stream of 85% ethanol (projected to 2020). Many air permitting regs (in Texas, for one) more closely monitor NOx emissions than carbon dioxide, for that reason.

The whole other thing is that ethanol uses more net energy in its life cycle (from fertilizing the land to grow the corn, until burned in a carburetor) than the Btu value of the ethanol as a fuel! It's like mailing a 39-cent stamped letter to receive a 30-cent-off coupon in the mail.

[The Central Scrutinizer]

How crazy of an idea would it be to have US government build gasoline refineries?

Very.

Our gas stations are already operating at cost...

No, gas stations make money.

...while the refineries are amassing profits.

Which is how they stay in business.

We as Americans cannot get the refineries to compete against one and another since we cannot really pick which one to buy from.

They compete against each other now.

I say we build up a 500,000 barrel a day government refinery and have it sell gasoline at less than market price as long as demand exceeds supply.

So you want the government to go further into debt? What does that accomplish?

That would force some competition to the market.

There is already competition.

[BPSCG]

[Hugo]
We don't need to have the government build refineries.
We'll just nationalize the ones that are already there.
[Chavez]

[boooeee]

Recently released research (in fact, they were talking about it on Science Friday/NPR just a couple weeks back) has shown that although ethanol may result in lower carbon emissions, it actually increased NOx (various oxides of nitrogen) that are poisonous, cause more problems with asthma and other respiratory problems, increase formaldehydes and other carcinogens, and increase ground-level ozone. The scientists interviewed talked of the models showing that in most urban areas, like LA, that the net health effects will be worse for an average fuel stream of 85% ethanol (projected to 2020). Many air permitting regs (in Texas, for one) more closely monitor NOx emissions than carbon dioxide, for that reason.

The whole other thing is that ethanol uses more net energy in its life cycle (from fertilizing the land to grow the corn, until burned in a carburetor) than the Btu value of the ethanol as a fuel! It's like mailing a 39-cent stamped letter to receive a 30-cent-off coupon in the mail.

Interesting stuff. What are the odds that any of the current presidential candidates would make this point? Probably nil, what with the importance of the Iowa caucus. Pandering is bi-partisan, unfortunately.

Your stamp analogy would make a good political soundbite.

[WildCat]

But who said the retailer losses money now? Worst I heard was they gross 10 cent/gallon. And sell 20,000 gallons per day. So, that $2,000 per day, $60,000 per month. Gross profit.
Assuming an average customer buys 10 gallons, that requires 2000 customers a day. If the station is open for 18 hours (6am to midnight say) that's an average of 111 cars an hour. If each car occupies the pump for 6 minutes, each pump could handle 10 customers/hour. So your "typical" gas station has 11 pumps, continuously occupied 18 hours a day... that's one hell of a gas station!

I would think 2,000-3,000 gallons/day is more typical, for a busy station with 12 pumps.

[BPSCG]

Assuming an average customer buys 10 gallons, that requires 2000 customers a day. If the station is open for 18 hours (6am to midnight say) that's an average of 111 cars an hour. If each car occupies the pump for 6 minutes, each pump could handle 10 customers/hour. So your "typical" gas station has 11 pumps, continuously occupied 18 hours a day... that's one hell of a gas station!

I would think 2,000-3,000 gallons/day is more typical, for a busy station with 12 pumps.If there's one thing I love, it's seeing an argument demolished by 6th-grade math. :clap:

[geni]

Guess which is the primary group stopping the pipelines? No one wants a crude line running through their community, their wetland, their golf course. It can take a year or two to get rights-of-way permitting and environmental permitting on a thirty-mile line. Or a gasoline or jet fuel line.


What about building along the line of roads and railways (or if you are in the UK and all else fails canals)?

[casebro]

Assuming an average customer buys 10 gallons, that requires 2000 customers a day. If the station is open for 18 hours (6am to midnight say) that's an average of 111 cars an hour. If each car occupies the pump for 6 minutes, each pump could handle 10 customers/hour. So your "typical" gas station has 11 pumps, continuously occupied 18 hours a day... that's one hell of a gas station!

I would think 2,000-3,000 gallons/day is more typical, for a busy station with 12 pumps.

I got my 20,000 gallon figure from a Lundberg Survey employee. In California. That is one of those double tanker trucks per day. Some stations get more than one per day.

Why do you think they stay in business?

[TriangleMan]

I got my 20,000 gallon figure from a Lundberg Survey employee. In California. That is one of those double tanker trucks per day. Some stations get more than one per day.
I googled "gas station average sales" and most of the sites ranged from 33,000 gallons per month to ~150,000. One was for sale and noted it had the "potential" of selling up to 250,000 per month. Nothing coming even close to 20,000 gallons per day, but while I don't doubt that some gas stations probably sell that much I think the sales in an average station appear to be around 2,000-4,000 per day, in line with Wildcat's analysis.

[Geek Goddess]

What about building along the line of roads and railways (or if you are in the UK and all else fails canals)?

Sounds like a good idea. The railroads will absolutely NOT allow anything to be built in their ROWs. I bored under a railroad for a small pipeline in southern Indiana (or Kentucky, it was right near the Ohio River) and it took six months to get the reviews done, and they specified everything. Railroads have more bureacracy than the government. Highways, same thing. You can only enter their ROW at right angles and bore under. The lines have to be double-cased. The power lines will sometimes let you encroach on their ROW, if the easement they own is wide enough to keep a 20 or 30 foot distance between the place where the line is buried and the poles for the power line. You must allow for maintenance equipment, mowing or otherwise maintaining the surface above the line or below the power line, etc.

[daenku32]

I think it is a great idea; I would be for it. And while were at it, let’s socialize the drug companies and take the profit out of medications so everyone can afford prescriptions. There is nothing wrong with these socialist measures.
I didn't say anything about socializing any company. Just starting government ones to lower the prices we pay.

ExxonMobil, BP, Valero etc would remain perfectly free to increase their own market share.

[MIKILLINI]

You want to pay lower prices at the pump? Forget about the refineries, Ethanol is not the future, although it looks like it at the moment, having the government in the business isn't going to help matters, either.
There is plenty of oil, the high price problem goes away by what happens with the price of crude per barrel on the world market. It was, I think, about 13 or 14 months ago that the price of each barrel dropped to around $20 on the market. That in turn dropped the price at the pump here in Illinois under $2 a gallon. Now the market is running in the mid $60's range, the price per gallon in my area is now $3.15 to $3.50.

[Comrade Ogilvy]

Brilliant idea...put it in the hands of the same people who manage the veterans health care and other Federal programs...What could possibly go wrong?

[MIKILLINI]

How crazy of an idea would it be to have US government build gasoline refineries? I think this unabashed attempt at a "socialist" program could be defended in the same way as every other "socialist" program in the history: national security!

Our gas stations are already operating at cost while the refineries are amassing profits. We as Americans cannot get the refineries to compete against one and another since we cannot really pick which one to buy from. I say we build up a 500,000 barrel a day government refinery and have it sell gasoline at less than market price as long as demand exceeds supply. That would force some competition to the market.

Although it's an appealing idea Daen, the problem with this idea is that the government already buys crude oil and keeps it in a national reserve system for the event of a national emergency. That means they would have to build another holding system for market purposes only...what can I say..it's the government. Then the govt. will either have to build their own pumping stations or contract this fuel through the private sector, the very same private sector that this idea was meant to compete with. Good luck with that.

[Solitaire]

Refineries are expensive to build, thanks the litigation.


What is the cost of construction versus the cost of litigation?
And more importantly, if you get rid of the litigation, what is the cost to others around the refinery?

Environmentalists activists are the wispy tips of the ice bergs. The real power lies below the water line.


Every year extra because of delays is millions lost in interest alone, which must be made up somehow.


Capital markets are remarkably efficient. They can borrow money on an on-demand basis.


Are an endangered species, thanks to oil hatred as the official policy of the government (which, keep in mind, wants to get away from oil).


The government could not care in the least about ethanol. Big agriculture interest has more purchasing power in washington than do oil interests.

Wait a minute... Are you just writing hyperbole? :boggled:

[MIKILLINI]

The government could not care in the least about ethanol. Big agriculture interest has more purchasing power in washington than do oil interests.

You nailed the Ethanol issue right there, Solitaire. Ethanol and Bio-Diesels are driving up the corn and bean crop prices to benefit the agriculture industry. 30 miles from here, there is an attempt by a city to acquire rights on getting one built. One of the requirements is the plant must have a water source to draw from. The amount of water needed for this large of a plant is 1 million gallons per day . Wow.

[The Painter]

I didn't say anything about socializing any company. Just starting government ones to lower the prices we pay.


The government can lower the prices right now, if they really want. Between federal and state taxes, they get anywhere from 40 cents to 70 cents per gallon. That’s more than the local gas station makes. The government makes more on gas then anyone involved in the process. If they want to lower the price, cut the tax.

It takes approximately 10 years to build a refinery, from conception through commissioning. Several years of that period of time is working through the environmental permitting, because activists protest the Planning Commission, file numerous lawsuits against the EPA or the state enviromental permitting agencies, and picket like mad. Chevron tried to permit a refinery in California several times, but gave up after all the litigation. Those same groups would picket a government attempt to build a refinery. More refineries would mean surplus capacity, which would mean some competition for feedstocks. They need to run full to make money. .

Goddess, you are the expert on this. I’ve heard that not only does it take at least 10 years to build a refinery; it takes 25 years before they show a profit. 10 years to build + 15 years of operation = 25 years. That is a very long term investment. That's a long time to let 4 billion sit making nothing.

Expanding a U.S. refinery may cost as much as $10,000 per barrel of capacity, according to Dan Robinson, president of Placid Refining Co., operator of a refinery in Port Allen, Louisiana. That means that Kuwait's refinery project may cost as much as $4 billion.
http://www.bloomberg.com/apps/news?pid=10000087&sid=ai2PoL0XZ1zY&refer=top_world_news

[Geek Goddess]

Goddess, you are the expert on this. I’ve heard that not only does it take at least 10 years to build a refinery; it takes 25 years before they show a profit. 10 years to build + 15 years of operation = 25 years. That is a very long term investment. That's a long time to let 4 billion sit making nothing.

I am not an expert, just in the business. The 4 billion seems high, but refineries are infinitely more complex to build that the gas processing projects I normally do. I just finished one that cost $52 million, and it processes only about 200 mmcfd (million cubic feet per day) of gas, and produces essentially no liquid - it's just to remove CO2 from the gas, dehydrate it, and compress it into a pipeline. My co-worked managed one that was about $44 million, and it makes about 13,000 bbl per day of a light mix, of which about one third is used to blend gasolines and the remainder is propane or butane. It's going to take about 2 years to pay out, before tax. Corporate taxes are close to 50% (state, federal, severance, etc), so it's closer to 4 years after tax to pay out. And this plant just chills gas to remove the liquids, and then dried the remaining gas for pipeline delivery.

A refinery takes a soup of chemicals known as crude, and separates them all, removed contaminants, sulfur, etc., then puts different streams through reactions to create jet fuel, gasoline, asphalts, sulfur, and dozens of other products. Only a portion of the crude ends up as gasoline. And a refinery has to have built-in flexibility to take a different soup mix depending on what producers send. All this also requires a lot of fuel, so refineries have all sorts of schemes to recover and re-use heat and chilling.

It's not rocket science, it's harder because it's organic chemistry and thermodynamics, not physics.


The fact that we haven't been able to get a refinery approved in 30 years, even with the boom market in oil in the past 5 years, ought to bother people. The fact that we would let even more foreign nationals build and own things that are so vital to our economy and national security ought to bother people. (And BP is a British-owned company, obviously. Shell is foreign). The environmentalists shut down most inquiries. My gas processing plants are very clean, and sometimes it takes months to work through the public protests. Since these tend to be built out in the country, there is always a rancher or farmer than doesn't want to be able to hear the sound of a compressor running a mile away, or doesn't want to see trucks going down the roads in his nearby town. Or doesn't want the construction crew crowding the hotels and restaurants for 8 months during construction. I had to pay a crew to spray water on a dirt road twice a day for 6 months, because one of the nearby farmers thought the dust from trucks on the dirt roads might affect her flower beds 500 yards away. That costs my project over $140M (given the price of labor and equipment now!!) I can't imagine the nightmares involved in something the size of a refinery.

[FarmallMTA]

I think it is a great idea; I would be for it. And while were at it, let’s socialize the drug companies and take the profit out of medications so everyone can afford prescriptions. There is nothing wrong with these socialist measures.

Shhhoooot. We don't have to do that! All we have to do is import all the vast supplies of surplus pharmaceuticals that Socialist Cuba has running out its ears! True Socialist paradise, realizing in full the rosy scenarios predicted so presciently by Marx, Engels, Lenin, Trotsky, Stalin, FDR, Mao, Stevenson, Gueverra, LBJ, Brezhnev, Honecker, Carter, Andropov, Mondale, Dukakis, Clinton and Clinton, Gore, Kerry, Chavez, Morales and Barak/Edwards/Kucinich.:o

[daenku32]

I am not an expert, just in the business. The 4 billion seems high, but refineries are infinitely more complex to build that the gas processing projects I normally do. I just finished one that cost $52 million, and it processes only about 200 mmcfd (million cubic feet per day) of gas, and produces essentially no liquid - it's just to remove CO2 from the gas, dehydrate it, and compress it into a pipeline. My co-worked managed one that was about $44 million, and it makes about 13,000 bbl per day of a light mix, of which about one third is used to blend gasolines and the remainder is propane or butane. It's going to take about 2 years to pay out, before tax. Corporate taxes are close to 50% (state, federal, severance, etc), so it's closer to 4 years after tax to pay out. And this plant just chills gas to remove the liquids, and then dried the remaining gas for pipeline delivery.

A refinery takes a soup of chemicals known as crude, and separates them all, removed contaminants, sulfur, etc., then puts different streams through reactions to create jet fuel, gasoline, asphalts, sulfur, and dozens of other products. Only a portion of the crude ends up as gasoline. And a refinery has to have built-in flexibility to take a different soup mix depending on what producers send. All this also requires a lot of fuel, so refineries have all sorts of schemes to recover and re-use heat and chilling.

It's not rocket science, it's harder because it's organic chemistry and thermodynamics, not physics.


The fact that we haven't been able to get a refinery approved in 30 years, even with the boom market in oil in the past 5 years, ought to bother people. The fact that we would let even more foreign nationals build and own things that are so vital to our economy and national security ought to bother people. (And BP is a British-owned company, obviously. Shell is foreign). The environmentalists shut down most inquiries. My gas processing plants are very clean, and sometimes it takes months to work through the public protests. Since these tend to be built out in the country, there is always a rancher or farmer than doesn't want to be able to hear the sound of a compressor running a mile away, or doesn't want to see trucks going down the roads in his nearby town. Or doesn't want the construction crew crowding the hotels and restaurants for 8 months during construction. I had to pay a crew to spray water on a dirt road twice a day for 6 months, because one of the nearby farmers thought the dust from trucks on the dirt roads might affect her flower beds 500 yards away. That costs my project over $140M (given the price of labor and equipment now!!) I can't imagine the nightmares involved in something the size of a refinery.
I would like to see some citations for many of the statements, such as "unable to get approved" because of environmentalists.

The point is the corporations could get one approved and built, if they wanted to. But as we all seem to agree, it would not be profitable for them. However, our economy would benefit vastly from doing so. The "invisible hand" is not helping us. The oil suppliers can blame regulation all they want, but we shouldn't let them damage the environment in which ever way that would allow them to maximize their profit margins.

[Geek Goddess]

I would like to see some citations for many of the statements, such as "unable to get approved" because of environmentalists. All of this is public information - you can search the permit applications, public notices, etc., on the internet. My own PERSONAL experience, which I alluded to in a previous post, is on a much smaller scale. I tried to get a permit to replace a waste heat boiler that had a leak. The new EPA law was that any change over a certain dollar amount had to be BACT (best available control technology). Because the boiler was expensive, it was going to qualify. BACT means the best available process with the greatest emissions controls. OK, if you're building a new site, but I just needed to replace a leaky boiler. The BACT in this case meant rebuilding most of the unit, at a cost of $8 milllion. (This was in 1993). The public notice period was 90 days, and some of the 'public' near the plant had been filing petitions to shut it down, since it was ugly. And the Title V permitting review time was 'up to 12 months'. I just needed to replace a leaking boiler. STEAM boiler. But, because the cost met the trigger, my choice was - leaking boiler, with constant repairs, or rebuild a perfectly working plant in a two-year project.

The point is the corporations could get one approved and built, if they wanted to. But as we all seem to agree, it would not be profitable for them. However, our economy would benefit vastly from doing so. The "invisible hand" is not helping us. The oil suppliers can blame regulation all they want, but we shouldn't let them damage the environment in which ever way that would allow them to maximize their profit margins.

There is a difference between 'damaging the environment any way they want' which is a naive statement, versus 'maximizing their profit margins.' The owners of the company - the stock holders - don't want their money being used to build things that will never pay out.

The oil suppliers are not the same people as the refinerers, in most cases. Yes, they could get one permitted, eventually. So, about 2018, we'll have one more refinery. Wow.

[Solitaire]

There are less refineries today than there were 10-20 years ago, and it is because the refinerer (which are not always the oil producing companies) cannot get through the environmental permitting. With process margins like they are, and the capacities running full blast, they all want to build or expand refineries. They buy oil from the producer, and sell to the jobbers, and so the way to make more money is to process more liquid. It's all about margins.


About 30 refineries were closed around the year 1990, according to the testimony in H3475. (http://holt.house.gov/pdf/Holt_floor_remarks_on_Refinery_Permit_Process_Sche dule_Act_060706.pdf)

I don't think its the environmental permitting, but the margin argument makes a lot of sense. Most likely the finance people did the numbers and found that they couldn't add more capacity profitably which means supply and demand are fairly well balanced.


The fact that we haven't been able to get a refinery approved in 30 years, even with the boom market in oil in the past 5 years, ought to bother people.


It is most likely the case that the most efficient producers drive out the least efficient producers, since the number of refineries have been decreasing while the remaining refineries have increased production.


The fact that we would let even more foreign nationals build and own things that are so vital to our economy and national security ought to bother people. (And BP is a British-owned company, obviously. Shell is foreign).


I'm having difficulty imagining problems here. In a time of war, for example, the assets owned by the foreign nationals may be taken over by the government for the duration of hostilities. At times of peace, they should freely own what ever assets they can afford. As long as a free markets and competition exist then we all benefit from the foreign ownership of those capital assets.


My gas processing plants are very clean, and sometimes it takes months to work through the public protests. Since these tend to be built out in the country, there is always a rancher or farmer than doesn't want to be able to hear the sound of a compressor running a mile away, or doesn't want to see trucks going down the roads in his nearby town. Or doesn't want the construction crew crowding the hotels and restaurants for 8 months during construction. I had to pay a crew to spray water on a dirt road twice a day for 6 months, because one of the nearby farmers thought the dust from trucks on the dirt roads might affect her flower beds 500 yards away. That costs my project over $140M (given the price of labor and equipment now!!) I can't imagine the nightmares involved in something the size of a refinery.


A surprising amount you have spent there.
Paving the road costs about a million dollars a mile... Gravel much less... Or even a dense fibrous mats... Hm.
Clearly another constraint prevented taking one of these other options.

[Dr Adequate]

Shhhoooot. We don't have to do that! All we have to do is import all the vast supplies of surplus pharmaceuticals that Socialist Cuba has running out its ears! True Socialist paradise, realizing in full the rosy scenarios predicted so presciently by Marx, Engels, Lenin, Trotsky, Stalin, FDR, Mao, Stevenson, Gueverra, LBJ, Brezhnev, Honecker, Carter, Andropov, Mondale, Dukakis, Clinton and Clinton, Gore, Kerry, Chavez, Morales and Barak/Edwards/Kucinich.:o Or we could kill all the Jews, realizing in full the rosy scenarios predicted so presciently by Hitler, Goering, Heydrich, Eichmann, Cheney, Rumsfeld and Bush.

Conflate much?

[Comrade Ogilvy]

Or we could kill all the Jews, realizing in full the rosy scenarios predicted so presciently by Hitler, Goering, Heydrich, Eichmann, Cheney, Rumsfeld and Bush.

Conflate much?


Brilliant logical argument...and some people say conservatives are deranged.

[Geek Goddess]

A surprising amount you have spent there.
Paving the road costs about a million dollars a mile... Gravel much less... Or even a dense fibrous mats... Hm.
Clearly another constraint prevented taking one of these other options.

I'm sorry, I used 'oil industry' terms, in which "M" is one thousand and "MM" is one million. That was $140,000 for watering the roads for th econstruction duration, which is still a lot of money that I didn't budget. The road belonged to the county, and we could not have graveled it for that amount, to meet their specs, but we did grade it regularly for them. Once construction was over, the truck traffic pretty much disappeared. We did it to please the landowner, since we were going to be her neighbor for a long time.

[Dr Adequate]

Brilliant logical argument...and some people say conservatives are deranged. Deranged? You may well be, on the showing of your hysterical post about "socialism"; and if you also can't tell the difference between a "logical argument" and my parody of your insane delusions, you are also completedly frickin' stupid.

If you really didn't understand my post, try reading the post it was an answer to. Now read the words "Conflate much?" again. Now bang your head against your desk while reciting the Mantra of Enlightenment, which goes like this: "Dr Adequate is right ... I am a frickin' retard."