“New oil refineries must be built“
New refineries no, expand capacity at existing refineries yes, and that has been happening over the last 40 years. The reasons are multiple
1) locals know the value and will work through permitting issues
2) workforce is experienced and can expand from a strong base. Same goes with supporting trades like maintenance and welders etc
3) transportation hub in place: ports, pipelines, rail and existing tankage
4) utilities are in place, power, water, cleanup
5) and expansion will tie to what is lacking in existing ie going toward less favored heavy oil, or increase diesel and jet relative to gasoline
6) it’s the cheaper, lower capital risk
7) you can retire and replace some older, smaller equipment, that is a catastrophe waiting to happen, without shutting down the whole place
8) planning is on-going, designs are already in place on what is the next project to implement. Just hand over the funds
Meanwhile, the rest of the world has been building refineries at a pace and location that doesn’t make sense. For example, and this has emerged in the last 10 years, the US has a huge competitive advantage by tapping low cost natural gas as fuel. It’s the biggest operating expense in a refinery. China and Europe can’t compete economically against it. Yet they’ll all run their refineries flat out, in good times and bad.
At some point, if refineries are not distributed around the country well, and pipelines are not built, regions can end up on the short end of the stick, so to speak. See: California, and the US Northeast. Granted that for CA, that is more an issue of closures, than previous lack of refineries.
Meanwhile, the rest of the world has been building refineries at a pace and location that doesn’t make sense. For example, and this has emerged in the last 10 years, the US has a huge competitive advantage by tapping low cost natural gas as fuel. It’s the biggest operating expense in a refinery. China and Europe can’t compete economically against it. Yet they’ll all run their refineries flat out, in good times and bad.
Well, given that political strife between countries can create large shortfalls of refined products, even in countries on the sidelines (more or less), and refineries in warring countries are an obvious target if things get rough, maybe building of those refineries did make sense after all. The disadvantage of the moment of the past may be advantageous in a crunch. It may also be thought of as insurance of a sort: It takes decades to build a really solid economy. Have it crashed deeply because of a war you weren't even fighting in, and who knows how long recovery may take, especially if idiots or worse come to power due to political turmoil in one's own country, said turmoil caused by economic collapse. Costs come in multiple forms...
Also speaking of costs, the US Northeast nonetheless was significantly importing refined products from Europe, prior to 2022, because those products were cheaper than obtaining said products from US Gulf states. I assume cheap Russian crude oil and natural gas made that possible. I suppose some Russian refined products also came through Euro traders and such, to the USA.