U.S. Resists Building Refineries As Overseas Firms Move Ahead (Not Just Crude Oil)

WSJ ^

[indianrightwinger]

U.S. Resists Building Refineries As Overseas Firms Move Ahead By THADDEUS HERRICK in Houston, BHUSHAN BAHREE in New York and KEITH JOHNSON in Madrid Staff Reporters of THE WALL STREET JOURNAL December 28, 2005

A surge in investment in new refineries is under way overseas even as U.S. refiners remain leery of adding facilities -- a development that could make the U.S. more reliant on imports of refined products like gasoline and heating oil in coming years.

About 100 projects representing as much as 12 million barrels a day of added refining capacity, most of them outside the U.S., could be online by the end of the decade, according to Wood Mackenzie, a consulting firm based in Edinburgh, Scotland. The increased interest comes as global demand rises, fueled in part by the rapid growth of China and India.

Among those with the most ambitious plans: Saudi Arabia. The Saudis have been whittling down a list of foreign contenders to team up with in a domestic refinery with capacity of some 400,000 barrels a day for export. The kingdom also is moving to expand and upgrade its 400,000-barrel-a-day refinery in Rabigh, on its Red Sea coast. And state oil company Saudi Aramco has signed on to build a huge refinery in China with Exxon Mobil Corp. and China Petroleum & Chemical Corp., or Sinopec, as partners.

European companies such as Repsol YPF SA and ENI SpA also are bullish on refining. "We think there has been a structural shift in the refining business," says Pedro Fernández Frial, Repsol's director of downstream business development. Repsol recently announced a €3.2 billion ($3.8 billion) plan to increase capacity.

Meanwhile, refiners in the U.S., by far the world's largest petroleum consumer, continue to hold back on building refineries despite the recent surge in prices

[indianrightwinger]

When will the environmental crazies and their friends in the Senate realize that they are placing national economy and security in the hands of the Saudi king and the Iranian mullahs??

Oh, I forgot. They just don't give a damn.

[taxesareforever]

I hope all those new overseas refineries say that they will only make one type of gasoline and the U.S. can take it or leave it. Would serve the U.S. right. Screw all the different blends of gasoline because different states have different requirements.

[Texas_Jarhead]

You are correct. They are not "public servants", they care only for themselves.

[indianrightwinger]

The enviro crazies will lobby for you and me to ride on a donkey to work. And, the ****ing Senate would vote in favor of such a Bill.

[defenderSD]

Is there any way for non-subscribers to view this article?

[indianrightwinger]

I will have to give you my login/password. Probably not a good idea for *capitalistic* reasons, at least.
I will summarize the rest of the article though:
1) No refineries were built since mid 70s
2) Some refinery capacity was added to existing ones
3) Profits from refining are high right now
4) But, may not last long to convince refinery companies to add capacity
5) Industry is heavily regulated with questionable profits
6) Katrina resulted in loss of refinery capacity
7) Outside the US refiners opened up supplies sensing good profits. Gas prices in the US declined since some.

But, the downside is more reliance on foreign refined products (in addition to Crude).

The following closing lines summarizes it all:

But the lack of refining investment in the U.S. relative to the rest of the world could add to the growing reliance of the U.S. on imports, depending on how fast oil demand grows. Last year, imports made up 9.5% of U.S. demand for refined products, up from 7.4% in 1999.

[BullDog108]

BugMeNot

[Prophet in the wilderness]

" The enviro crazies will lobby for you and me to ride on a donkey to work. And, the ****ing Senate would vote in favor of such a Bill. " ....

And the envirowackos will give us a fine if we don't clean up after our donkeys, and horses on our way to work.

[killdonkey]

Last time I looked we had a majority we better get of our butts and build some,forget the enviro wacko's we got the votes.

[Republican Wildcat]

The liberals are sending more jobs overseas. Can't really blame these other nations - there is demand that must be met and they are going to cash in on it.

[Republican Wildcat]

We do not have 60 votes.

[Ban Draoi Marbh Draoi]

Is there any way we can get rid of the enviro-loons?

(Personally my favorite idea is to walk all over the unnecessary regulations with a size 13 combat boot. Get rid of the loons and their stupid laws and build refineries, preferably in Texas, Louisiana, and Oklahoma. If the damn loons don't like it, refuse to sell them heating oil and let them freeze.)

[geopyg]

"The liberals are sending more jobs overseas."

What pisses me off the most (as one who thinks we should be good stewards of the earth) - is that if the U.S. had 1/4 the regulation on this stuff (oil drilling, power generation, mining, etc.) than we do now - the environment would still be 10 times better off than most countries in the rest of the world.

I wonder how many EPA type hoops the Saudi gov't makes their companies jump through?