April 5, 2005
The recent explosion at a Texas oil refinery impacted an already strained supply chain and underscored how environmentalists put our national security and energy independence at risk, says Investor's Business Daily (IBD).
According to the National Petrochemical and Refiners Association (NPRA), the last refinery built in the United States was in Garyville, La., in 1976. NPRA says the industry has been lacking for years:
- In 1981, 321 refineries pumped out 18.6 million barrels a day of gasoline.
- Today, only 149 refineries pump out 16.8 million barrels of gasoline daily, operating at over 90 percent of capacity.
- The industry forecasts 8 to 10 new refineries will be needed to keep up with demand; each refinery is estimated to cost $2.5 billion and take seven years to complete.
Even if companies wanted to build a new refinery, the environmental burden is huge and the costs are overwhelming. Approval of a new refinery could require as many as 800 different permits and NPRA says environmental regulatory costs over the past decade reached $47 billion.
The lack of slack and flexibility is resulting in exaggerated seasonal shortages and price volatility, putting our energy supply, economy and national security are at risk, says IBD.
Source: Editorial, "Crude Awakening," Investor's Business Daily, March 28, 2005.
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