HIGH GAS PRICES ARE NO MYSTERY
May 10, 2007
Considering that nothing much has changed on the supply side while demand continues to increase worldwide, it would be a mystery if gas prices did not reach record highs -- especially in the face of continued boutique fuel mandates, refinery bans, greenie restrictions on domestic energy development, and so forth, says Investor's Business Daily (IBD).
Our refineries are doing more than ever, but their numbers are dwindling and no new ones are being built. The reason is not greed, but cost and regulations, says IBD:
- From 1994 to 2003, the refining industry spent $47.4 billion, not to build new refineries, but to bring existing ones into compliance with ever new and stringent environmental rules.
- In 2006, the blending of ethanol into gasoline reached a new high of more than five billion gallons and production of new clean-burning, ultra-low sulfur diesel fuel topped a record 2.6 million barrels a day at the end of last year.
- U.S. refining capacity has been growing at about 1 percent a year for the past decade -- the equivalent of adding a mid-size refinery every year.
- Since 1996, U.S. refiners have expanded capacity by more than 2 million barrels a day; this is a remarkable achievement in the face of environmental mandates setting new ethanol usage and low-sulfur requirements.
The last major refinery built in the United States was in Garyville, La., in 1976 and the ones we have are getting older. Like the cars they fuel, periodic maintenance us required. At least we build new cars, says IBD.
Source: Editorial, "Supply And Demagogues," Investor's Business Daily, May 10, 2007.
Browse more articles on Environment Issues