There is a lot more to economics of refiner than nearby crude oil. Refineries have to have the product pipelines coming out of them as well as crude and natural gas going into them.
They also produce more products than just transportation fuels. Residual Oil, Petroleum Coke, Sulfur, Chemical feedstocks, etc all need to move to their market place. Most of those are in the Gulf Coast area or transported to overseas markets. Today we have a surplus of refinery capacity. The economics of building a new one likely mean closing down another that already has the infrastructure in place. In the Houston area for example is also a hydrogen pipeline delivering to many refineries for a better price than they can build their own hydrogen generators. Modern refineries use a lot of hydrogen in their processing.
These are the reasons there is about a 40% pricing advantage to expanding an existing refinery over building a new one. Some exception exist but that is a typical pricing differences. Also building in an area that sees temperatures down to -50°F creates additional expenses.
We have a oil support company here that has about 300 people working in ND. The private ownership of land in ND is eliminating many problems.
Are you an expert on refineries? We already have one operating in Mandan, ND for as long as I can remember and I have lived in ND all my life. And I have NEVER experienced -50 degrees in my 67 years.
Are you an expert on refineries? We already have one operating in Mandan, ND for as long as I can remember and I have lived in ND all my life. And I have NEVER experienced -50 degrees in my 67 years.