ConocoPhillips Humber
Posted on 04/25/2006 9:26:13 AM PDT by sully777
In a report released August 4, [2005] ICF Consulting cautions government, consumers, and industry that the lack of adequate refinery capacity may become a greater concern than availability of crude oil over the next 5-10 years. The analysis titled, The Emerging Oil Refinery Capacity Crunch, provides background on global oil demand history and trends, and compares the forecast of demand growth with the refinery capacity outlook. The implications are significant for both the United States and global economies. Our analysis studies the impacts of the Energy Policy Act of 2005 on refiners.
In the mid-1980s, the oil industry suffered from a surplus of refiner capacity. Weak refining margins made investment in new capacity very difficult to justify. Since 1990, this capacity surplus has been slowly wrung out of the global system. Environmental regulations have contributed to refinery closures, and the strong and steady growth of global oil demand has helped increase refinery utilization. Growth in the demand for clean products — gasoline and particularly diesel -- is being fueled by the dramatic rise in the economies of the Far East. These trends are on a collision course.
ICF Consulting's analysis shows that global refinery capacity has decreased to 103 percent of total oil demand in 2004, down from 109 percent in 1990 and 107 percent in 2000. This situation has been overlooked due to the overall oil price explosion and world crude oil spare production capacity issues. The International Energy Agency (IEA) is forecasting a growth in oil demand of more than 5 million barrels per day by 2010. Industry has typically expanded existing refineries only marginally every year through low cost expansions (referred to as 'capacity creep'), but capacity creep may become tougher as the world moves to much lower sulfur levels in products in order to meet environmental regulations.
"The crux of the problem is that new global refinery capacity investment is lagging behind demand," says Zeta Rosenberg, an ICF Consulting Senior VicePresident and fuels expert. "Historically, the oil industry has been able to squeeze out some additional capacity, but the trend increases of the past may not be enough to keep up with forecasted demand. Since mid-2004, refinery margins have stayed very strong and the outlook appears to be the same for the foreseeable future. If supply does not materialize to meet the demand forecast, however, there could be significant negative impacts on global economies and world demand," says Ms. Rosenberg.
IMO, I don't want to go back to the monopoly of Standard Oil, or the nationalization days of the UK, Holland, Libya, or currently Chavez's looney bin. So, I am inclined to agree with Shumer in principle.
Specter is a fabian RINO!
The government ignored all recommendations because they are bending over for environmentalists and special interest lobbyists. We're in a crisis and they fiddle.
"The crux of the problem is that new global refinery capacity investment is lagging behind demand," says Zeta Rosenberg
Why would they want to build new refineries when that will just cut their profit margine? Why shouldn't the Federal demand that new refineries be built?
Ask Chuckie Cheeze's Office why there are no major refineries his state of New York with millions and millions of people.
New refineries have not been built since the 1970's in the United States. Signs of the power of the Environmentalists...
For starters, Medicare Plan D.
People should realize our government, in its present condition, is inept and unable or unwilling to do anything for the betterment of the country.
The stockmarket used to be about investing capital in companies that came public or did secondary offerings.
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