"Matt Barrow" wrote in message
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"Mike Rapoport" wrote in message
ink.net...

"Matt Barrow" wrote in message
...

"Mike Rapoport" wrote in message
ink.net...

"Matt Barrow" wrote in message
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Maybe because the US imports refined FINISHED products (much more
costly to buy as well as transport).

Not really true. The US only imports about 14% of its gasoline and US
gasoline production is up *not* down as your article implies.

The article doesn't make a distinction about type of fuel, only refinery
capacity. Also, the gasoline to other fuels mix has increased, correct?
I suspect the US produces much less heating oil than in the past, most
heating being done with natural gas or electric.

Total distillates (diesel, heating oil, kerosene) refined in the US have
increased 80% over the past 23yrs.

And gasoline is up 25% (6600-8800Mbbl).

Yes, everything is up, gasoline, diesel, heating oil, kerosese but people
say that enviornmental regulation has prevented capacity expansion. It
simply isn't true.


As well, what amount of finished product did we import in the past?
AIUI, it was zero until the past few years.
--
Gasoline imports have increased over time, but still remain at low
levels.

14% of US usage.

Yes and it is important to recognize that if oil exporters build refineries
to capture downstream revenue and export gasoline (instead of crude) that
expanding US refining capacity accomplishes nothing. If the Candians start
exporting lumber instead of logs should the US build more sawmills? It is
the same thing.


When you take all the facts together, it seems that refining capacity
over the past 25yrs has been driven by economics not regulation.

I never said otherwise. I also never said our capacity was down. What I'd
said was that capacity growth was consrained, that we were becoming too
centralized in our geographic dispersment (see the results of Hurricane
Katrina).

You may not have said it, but you presented an article that claims that
refining capacity is down from 18.6MM bbl to 16.9MM bbl. I agree that *this
quarter* we are too geographically concentrated but these are supposed to be
50yr storms. The refineries are on the Gulf Coast because that is where
imported crude arrives and land is cheap. It makes sense to locate the
refineries in what are the best locations the overwhelming majority of the
time instead of moving them somewhere else.


The "lack of refining capacity"

That's your point, not mine nor the point of the IBD article. The point is
that our capacity is constrained and cannot grow enough to meet growing
demand.


The article is allegedly the source of the reduction of refining capacity
from 18.6 to 16.9

hysteria is simply the latest thing for pundits to talk about.

The article I linked to was hardly hysterical. The hysteric were from Reid
and Waxman coming from the other direction. As much, I would hardly say
those two bozos had any grasp of the situation.

The conservatives want to blame the enviornmentalists and the liberals
want to blame the greedy oil companies. Hopefully the rules will remain
unchanged and economics will continue to drive decision making. Refiners
are flush with cash and don't need taxpayer handouts either directly or
indirectly through relaxed regulation. Putting things in perspective: we
had two "fifty year" storms in two weeks than directly hit major refining
areas, having a huge reaction seems unwarranted. One factor that gets
ignored is that, if you build new refineries, each one adds huge amounts
of capacity. It would only take a few new refineries to create a
refining glut.

Well, let's let the market decide how much is enough, okay?

I'm for that. I expect to see ongoing increases in capacity as we have
every decade for the past 100yrs.

Mike
MU-2