Quote Originally Posted by Lemur View Post
Excellent article on the subject to be found here. Lots of chewy bits of goodness in the article, but here's a fascinating passage:

Oil-friendly members of Congress like to blame environmental regulation for the lack of refinery capacity. But the oil companies themselves choked supply by closing more than half of their 300 U.S. refineries in the past 25 years. (Business Journalism 201: You can reinvest in manufacturing capacity or ride the demand curve to higher profits.) Studies by Cambridge Energy Research Associates, a respected, oil-friendly consulting firm, indicate that even if all environmental regulations were removed from refinery construction, few would probably be built right away because of a 75 percent rise in construction costs since 2000, largely driven by the increased fuel cost of transporting building materials.

This interests me. I was given to understand that refineries were the crucial bottleneck in our gas/oil system, and that they weren't being built because of NIMBY communities and crazy red tape Federal madness. Why were so many refineries closed? Does anybody have the scoop on this? And please, no left-wing or right-wing crackpot conspiracy sources, if you please. I'd like some facts, if such are to be had.
I think the last refinery built in the US was in the 70s. Think about that, in relation to the increasing demand in the US.

There's one in the works in South Dakota scheduled to start building in 2010 and I guarantee it won't finish on time, 2014, because of envirowhacko groups suing them.

Some examples of EPA fun:

In order to comply with new low sulfur regulations, one WA refinery had to spend ~80 million for a new diesel unit, and ~120 million on a new unit to comply with Cali gas laws. The sulfur limit in diesel was cut from 500 ppm to 15 ppm in 2007. That's a very drastic cut.

Recently, the EPA pulled the permit for a ConocoPhillips refinery project in Wood River, Illinois. The project is costing three and one-half billion dollars, and the EPA shut it down in the middle, thanks to a lawsuit from the "national resource defense council".

The thing is, the current envirowhacko agenda is to prevent use of Canadian oil shale product in the US, being the energy haters they are.

Those same enviro-whackos are now suing the BP refinery in Whiting, Indiana over another huge project.

A chevron refinery in richmond, cali is trying to get a permit to expand, and the city is demanding insane things to allow the permit (like 10% of the refinery power generated by wind and solar, huge cuts in CO2 emissions, dictating the amount of oil that can be run through the refinery, demanding 10 million in bribes for various city projects, etc.)

That's just off the top of my head.

Envirowhackos use EPA regulations to sue anything and everything that refineries try to build, even if the permit has been issued. Heck, in one town nearby a group of liberals has delayed for years the building of a new Wal-Mart by suing the city, and Wal-Mart has to deal with diddly-squat in terms of enviro regulations, relatively.

The EPA, of course, makes newer and more onerous regulations each year, and permits can increase those further. The high cost of compliance and the battle against envirowhackos to get anything approved has been a prime driving force for the shutdown of refineries. It's not really NIMBY's but out of town envirowhacko groups that come in and sue any plan to expand or modernize.

Right now, there are literally a million regulations on a medium sized refinery in the US.

And in the west, almost every state has different - not varying levels of strictness, but different - regulations on what gas sold there must be like. So gas is not a fungible good out here.

CR