We do not have refinery shortage. We refine more petroleum product than we use and export the surplus.
We do have a mess of different requirements of blends making it expensive to bring in fuel from on area to another to temporarily supply a short term loss.
When was the last refinery built in the United States?
http://www.eia.gov/tools/faqs/faq.cfm?id=29&t=6
There were 140 operable petroleum refineries in the United States as of January 1, 2015.
Two new refineries began operating in early 2015:
The 19,000-barrel-per-calendar day (b/cd) Dakota Prairie facility in Dickinson, North Dakota.
The 42,000 b/cd Kinder Morgan condensate processing facility on the Houston, Texas, ship channel, with plans to double that capacity by the end of 2015.
The newest refinery with significant downstream unit capacity began operating in 1977 in Garyville, Louisiana. That facility came online in 1977 with an initial atmospheric distillation unit capacity of 200,000 b/cd, and as of January 1, 2015 had capacity of 522,000 b/cd.
Capacity has also been added to existing refineries through upgrades or new construction. The most recent examples are:
In 2012, Motiva upgraded its refinery in Port Arthur, Texas, making it the largest refinery in the United States with a capacity of 603,000 b/cd as of January 1, 2015.
In 2009, Marathon upgraded its Garyville, Louisiana refinery. As of January 1, 2015, the capacity (b/cd) is more than double its original 1977 capacity.
But watch what happens to gas prices if the oil price goes up by one cent.
I still do not understand why, when all those oil companies spent multiple billions to build oil sand processing facilities in Fort McMoney (Fort McMurray), they did not build a massive refinery. Canada should not be shipping heavy oil to the US or overseas. Why not keep the ‘value added’ jobs here, shipping finished product outside the country?
IF a refinery had been built along with the bitumen processing facilities, Alberta (and Canada) would not be facing as severe a recession as we now face. We currently produce approximate 4 million BOEPD yet only have capacity to refine 2 million BOEPD. Over the next 25 years, production is expected to rise to 7 million BOEPD.
Of course the ‘greenies’ and ‘liberals’ aka ‘progressives’ aka ‘commies’ choose to destroy our economy, so tie up ANY refineries in tons of ‘red tape’, making the building of such facilities prohibitively expensive.
Gas is below $2 in OKC, and oil is only one of many input expenses for gasoline retailers, and the price drop was recent... there is a lag time.
Why there is a lag in gas prices on the way down and not on the way up. Lots of big picture factors, but right at the gas station level this is what happens. The gas station buys a “tank” load. If the price of gas goes down, they still have to sell at the higher price or loose money on the previous tank load. That tank load can be a day or a month supply based on the traffic. On the way up: If the price of gas goes up, the station has to raise prices right away in order to be able to buy the next tank load at the new price. An to exacerbate the above, many are contracted well into the future.
someone is siphoning off the profits - oil companies or government - who is guilty? Gas at the pump should $2 and under right now!!
The explanation I have heard from an Austrian economist (I forget who it was):
When oil prices rise, the gas station owner raises prices (as high and as fast as his local market will support), because the next load of fuel he buys will be priced based on the higher price of crude (plus refining and delivery costs).
When oil prices drop, no station owner wants to be first to cut his price, making the higher price a little sticky. Eventually, though, someone in the local market drops their price, and the others follow suit to avoid loss of sales.
EPA (fascists)
50+ blends
Regulation ad nauseum
A congress populated by demagogues, idiots, morons and corrupt socialists
A country where 40%+ of the population “worships” Mother Earth.
More prime fodder for demagoguery from Bernie Sanders and the Fake Indian.
We need new refineries.
We need to cut the gas tax.
We need a low barrel price for a while, so it’s sustained enough to convince oil companies that they can lower the price and make a profit.
We need to deregulate. But that’s pretty much true of everything.
When Obama took office, the average price was $1.83. It’s still higher than that.
And they are still long in refineries on the West Coast by quite a bit. They are running out of places to put GASOLINE too, but you don’t hear about that on Fox.
Amazing how many refineries come up lame in the summer time.
60 cents per gallon difference now between 87 and 93 octane. That’s gouging.
STOCKS FEEEEEEELL yesterday. So did precious metals .... What’s Up Wit Dat ? ?
There are three primary causes for gas prices not dropping as rapidly as oil prices.
1. Refineries have fixed costs as well as variable costs not related to crude that are not declining.
2. Federal and state taxes are fixed and assessed per gallon. They do not decline when crude falls.
3. Distributors and retailers still have fixed and variable costs and will turn a profit that is not reflected in the cost of crude.