bttt
"Sure, oil refiners are making a lot of money now. But there's no rush to build any more. Long term, oil refiners get a 5% return on investments, less than half that of a typical S&P 500 firm."
The auther seems to think a 5% return is "a lot"? I must question his knowledge of general business. There is no reason for any Oil Companies to invest in capitol when they could do much better investing in Bonds.
I hate it when my NIMTOs turn into NITMOs.
They are building a liquid natural gas plant just over the border south of San Diego to receive gas from South America before piping it north into the US. Such a plant could never be built in California, despite the great need they have to diversify their gas sources.
California's blackouts of recent years were caused as much as anything by natural gas shortages. The criticism of energy brokers such as Enron masks the fact that brokers can't play you unless there is a shortage to begin with. The solution to being held up at gunpoint is to find new sources of fuel, but California's legal climate makes it all but impossible to build anything. Thus I expect to see in future not merely LPG plants being built on the border, but finished gasoline being piped up from Mexico as well.
The rest of the US is almost as restrictive as California, or quickly becoming so, which guarantees energy shortages, guarantees that sharp traders will make hay on it, and guarantees that future industrial development will happen outside the US whenever possible.