Several threads have touched on the topic, but a search for “refineries” didn’t really seem to turn up a definitive answer.
If U.S. oil/gasoline refinery capabilities are so tight, why don’t they build a couple more? I’m sure they are expensive, but it’s not like demand for refined product is going to go away any time soon.
Is it the dreaded “environmentalists” keeping companies from expanding production by building new plants?
Or the evil “corporations” keeping supply steady as demand increases, so they can increase price and profits without spending for new plants?
Or something else that doesn’t depend upon knee-jerk responses from either side?
They’re expensive to build; the profits (until now!) have not been great; as a middleman, refiners are inherently low-profile (unlike giant oil exploration companies at the one end and gasoline retailers at the other end); all this means there has been less incentive for investors to want to get involved in the refinery business, as opposed to the high-margin, high-profile, oil prospecting or gasoline retail businesses; then you’ve got the fact that no one wants an oil refinery in their backyard (have you SMELLED the area around Elizabeth and Carteret, NJ lately?); add in the fact that all businesses loathe excess capacity, and you’ve got a perfect storm.
I met this girl in a bar and we decided to have sex. She said, ‘Kiss me where it stinks!’ So I drove her to Wilmington.
I used to deliver The British Weekly* and The L.A. Rock Review to pubs and venues in southern L.A. County and Orange County and had to drive through Wilmington/San Pedro/Long Beach. Those refineries do smell bad. (There’s a refinery several miles away from me up here in the PNW. I can see it across the bay, but have never smelt it.)
Refineries cover a lot of land, and land is getting more expensive. Never mind the mechanical organism itself. So I agree that they’re expensive and that there’s a large NIMBY factor.
It is very important that the number of refineries in the US doesn’t mean anything! It keep getting brought up by people of certain political stripes to push various weird agendas. E.g., “Let’s give old military bases to the oil companies so they can build refineries!” Beg your pardon???
What matters (primarily*) is the capacity of the refineries. Which of course has steadily increased over the years.
It’s like bringing up that there are fewer US automakers now than in the 1920s. So what? We are building a lot more cars after all.
*Location is also an issue. The Pacific NW is hostage to ARCO since it controls most of the refining capacity there. But ARCO building more refineries there wouldn’t solve the problem at all.
When the US built refineries, they were designed primarily for US oil production at
the time. US crude was typically “sweeter”(less sulfur) than Middle East oil.
You obviously can build refinieries to process sweet and sour crude, but it’s more
expensive and converting an existing refinery so it can process sour may be virtually impossible. Other time, total world oil production has tended to have more sulfur content.
When this latest oil thing started, there were oil officials in the Middle East saying we can produce more for the US, but you don’t have the refinery capacity. Left out of news stories was the sweet/sour issue.