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Refineries

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Seems to be a dozen "primary" reasons for no new refineries. Two that I personally know of were closed when competitors bought them, then phased them out as being too old to economically modernise and clean up. That is, if you believe the competitor that bought them.

While it may seem comforting to some to simply believe that Martin Sheen and a few thousand of his kind have such complete control of National Energy Policy, there are all sorts of market issues at play here. And the old money Conservatives of West Palm Beach don't want a refinery there any more than the Liberals of Malibu Beach.

Interestingly, I filled up a rental car in Iowa last week, and premium fuel, which I believe was 10% ethanol, was actually cheaper than regular by a dime. Don't know if that's because of a subsidy, a tax break, or what? I've heard that it's a wash though, because the ethanol blend fuel doesn't give as good milage.




http://slate.msn.com/id/2102031
 
One of the main reasons is the same as the reason that we haven't built a nuke plant for 20+ years. The enviromental regulations have become so onerous that it isn't feesable to build them. Between that and the "i don't want it in my backyard" people it has become close to impossible to get things done in this country.
 
atrdriver said:
The lack of refining capacity is our current biggest problem. Add to that the differences in gas that they must put out for all the EPA laws and we really ahve a problem. It's just amazing that the tree hugger crowd has kept a new refinery from being built for 30 years. That's something that needs to be changed, and yesterday.

very true and i agree with that....the cost of crude doubling is not a minor impact either.

to say there is a whole bunch of crude waiting for us to ramp up production is quite inaccurate. if that was the case, sauds wouldnt have been considering to try to increase crude output, the strategic oil supply wouldnt have to be considered and the price of crude wouldnt have doubled. those are all crude related solutions.




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Yes, refinery capacity IS the reason for the high fuel prices, we are operating at maximum capacity in that regard.

The reason for the petroleum being released from the reserves is this:
N.O. is where nearly 15% of our crude comes into this country (The LOOP alone brings in 11%). Now that N.O. is out of commission, we don't have enough crude COMING INTO the country to feed the operating refineries. Due to this, output at many refineries is dropping.
When we had enough crude, possible output is 100% and these refineries were operating at near 100% output.
Now these refineries aren't recieving enough crude to operate at 100% output, their possible output has now dropped meaning 50%-80% output is their new maximum.

By releasing oil from the reserves, many of these refineries are able to bump production back up to above 85%, thus easing some of the problems.
 
Just wait, they must be too busy collecting grease from Micky D's.
 
dash8driver said:
if there is plenty of crude, why is the price of it so high?

Because a bunch of nutjob speculators have driven the price to a point way above where the fundamentals suggest it should be. If you want another example of this, look no further than Google shares. The stock market and futures markets are not efficient. They fluctuate based on supply/demand, not fundamentals. Based on fundamentals, a barrel of oil should cost in the $25-$30 range right now. Oil prices will crash. You can count on it. It's just a matter of time.
 
New refineries ??

Why would any successful business, with very little competion, ever want to do anything that would lessen their profits? Fuel prices will have to increase dramatically before the demand in the U.S. ever decreases. If we reach that point oil companies may build new refineries. Competition is what we need.

-Keith
 

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