Just wondering why there are no refineries being built closer to the source? Is it too expensive or is it EPA stuff?
Just curious.
That’s a good question. I heard a talk radio guy here say he was out in Alberta and asked a gas station guy where the gas for his pumps was refined. The gas guy said, Oakville Ontario. So the crude is shipped from Alberta to Ontario, then the refined gas is shipped back. Huh?
It is near impossible to build a new refinery due to regulations and enviro opposition.
That is why you see current refineries expanding their capacity or, in the case of BP Whiting, IN, building a new refinery inside the current refinery.
They are all gearing up to process tar sands and North Dakota crude transported in by rail or tanker.
In most cases there isn’t enough crude coming from just one source to warrant a refinery.
These refineries have oil coming in by pipeline, ship, rail, and trucks from all over.
Part of it is logistics. Crude can be shipped in a single pipeline, but the refined products need to be transported separately.
Because building the shortening the crude/bitumen pipeline doesn’t solve any problems. Instead of transporting one product now you are transporting many. The refinery does not only produce transportation fuels, it also produces chemical/plastic feedstocks, residual oil or petroleum coke, sulfur and often some others.
Moving the refinery farther from the multiple customers only spends money while creating additional problems of delivery.
Once you refine the stuff, you have to distribute it to its markets.
There are no existing networks of product pipelines in the area. Building such supporting infrastructure would amount to a bigger, more expensive project than building a new large-scale refinery.
Thus, the most economical procedure is the crude oil pipeline to Texas (Keystone), where the refineries are, thence distribution to the rest of the nation via the existing product pipeline network.