Do we really need new refineries?

In his call for offshore drilling, President Bush also called for more oil refineries in the US:

The four-point plan proposed by Bush would:

* Increase access to the outer continental shelf…

* Encourage the extraction of oil from shale in the West…

* Permit drilling in the Arctic National Wildlife Refuge…

* Expand oil refineries in the U.S., where a refinery has not been built for three decades. Bush proposes regulatory reforms that could remove barriers to refinery construction — namely public opposition…

Some democrats have proposed that the government should take control of the issue by taking over the refineries

But do we really need new refineries? Big oil says no:

Yesterday, as part of a daylong seminar on the energy industry for reporters at the Chronicle’s offices, Exxon Mobil Vice President Kenneth Cohen offered some insights on why the company doesn’t build more new refineries in the U.S. Basically, Cohen said, building even a small refinery would require an investment of $2 billion to $3 billion.

“Once you’ve made that investment, what you’re looking at is `what’s the growth?’ It’s just like any other business,” he said.

Exxon predicts U.S. oil demand may begin to fall by 2030, which means the company faces a limited window for return.

Even Exxon is willing to admit that demand for oil may begin to fall by 2030, and they’re planning for a future in which alternates play a larger role.

If big oil doesn’t want more refineries, who does want them?

Why, our friends in Saudi Arabia, of course. They’ve got lots of smelly crude to sell, and few current refineries want to buy it.

Some people don’t know how to plan for the future…


About marypmadigan

Writer/photographer (profession), foreign policy wonk (hobby).
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