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October 28, 2005

Mindboggling.

A line from the NYT report on oil profits:

Politicians and other critics are asking why the industry allowed its refining capacity to tighten.

Could be two reasons here.

1) No new refinery has been built in the US since 1976. Because people don’t want to have a new refinery built near them.

2) The way in which the EPA (and various State and more local levels of government) insist upon winter and summer fuels, local mixes and special additives. There is no longer a fungible national gas market and of course, the switchover between making these different blends means that the same refinery can in fact refine less.

It could, in fact, be that Government itself has caused the tightening of refining capacity.

October 28, 2005 in Natural Resources | Permalink

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Comments

I've just realised that "boggling" is an anagram of "blogging." I should go find my glasses and put them on.

Posted by: Backword Dave | Oct 28, 2005 11:04:34 AM

it is indeed ironic that the environmental regulations have delivered a structural boost to the refining margins of the oil majors. And throw in pressure for double hull tankers leading to problems with supply for good measure

Posted by: Mark T | Oct 28, 2005 3:16:10 PM