Posted in: Default,
by Patrick DeHaan on Aug 18, 2009 01:37 PM
I'm sure in the last year or so you've heard the fact- the U.S. has not built a new refinery in decades. Is this making gasoline prices higher? Let's find out.
As far as I can find, the last new U.S. refinery opened in Garyville, LA in 1976 and was owned by Marathon Ashland. That's right- its been over thirty years since a new oil refinery has been built and everyone knows demand for refined fuels has risen since then.
Many times when prices are high the media inserts this fact into news stories or reports to make readers think that this is the sole reason for high prices, but it's a myth.
In the early 80's the U.S. had 15.66 million barrels per day of refining capacity with 254 plants operating. Today while the number of plants operating has dropped to just 141, the capacity of plants has risen to 17.67 mllion barrels per day. While smaller plants have closed, large plants have increased, expanded, and replaced old equipment with newer, more efficient equipment.
While U.S. refineries supply much of the demand of U.S. consumers, imports of finished fuels are still relied on. Between two and three million barrels of finished fuels are imported to the U.S. each day while nine million barrels of oil are imported daily.
So- the answer- is the fact that no new refineries causing prices to rise?
No. While there have been no new refineries, expansions have increased output since the 70's and 80's.