A new study, unveiled by Democrats in congress today, reveals interesting results about the expansion of oil refinery capacity.
The study finds that in 12 states, oil industry regulations have not delayed expansion permits for refineries.
The report's findings run counter to claims by Republicans and oil industry lobbying groups who say current permitting rules have hindered U.S. refining capacity expansions and caused consumers to pay higher gasoline prices.
On Wednesday, the House is scheduled to vote on a bill sponsored by Republican lawmakers Charles Bass of New Hampshire and Joe Barton of Texas that would give the federal government more power to work with local and state officials to speed up approvals of permits to build new refineries or expand existing ones.
A survey of 12 state agencies that have weighed expansion projects at about half of the nation's 150 refineries over the last decade shows that all but two requests got processed in less than a year, according to a copy of the survey obtained by Reuters."Well, if the permitting process worked, there would be new refineries."
For 17 of 25 projects that required permits under the Clean Air Act, states acted on permits in less than six months, according to a summary of the study written by Democratic staff of the House Energy and Commerce Committee.
"The responses prove additional evidence that the environmental permitting process is not preventing new refineries from being built or existing refineries from being expanded," according to the report, conducted by ranking Democratic Rep. John Dingell (news, bio, voting record) of Michigan based on data gathered by a group of state and local air pollution regulators.
According to a Barton spokesman, "Well, if the permitting process worked, there would be new refineries."
Not necessarily.
Consider this. The more refining capacity there is, the more gasoline there is on the market. The greater the supply, the lower the price. The lower the price, the narrower the profit margin for oil companies.
Oil companies today are reporting profits that are unprecedented in human history. Do you really imagine they are eager to stop making that much money? Do you figure they're looking for ways to sacrifice their bottom lines for the sake of consumers? Would that conform to anybody's understanding of human nature, or of corporate culture?
No.
What is more likely, and what likelihood is in fact supported now by evidence, is that the slow pace of refinery expansion has less to do with regulation and more to do with the bottom line. If representatives Barton and Bass had the public interest at heart, they would start to look into just how it is that the oil industry as a whole cannot seem to expand refining capacity at a time gas prices are killing working families. It might occur to them to wonder if, perhaps, there was not some collusion going on. After all, if Shell started producing enough gasoline to sell it more cheaply, people would buy it. Then, Exxon would feel the pressure to do the same, because Shell would be getting all the business. Then, BP might notice all the gas that Exxon and Shell were selling and try to get in on the action.
But, that's not happening. These companies continue to complain that regulation is the reason they're not producing more gasoline. So, it's not their fault that gas is three bucks a gallon or more.
Except we know now that it isn't true. So, what's it going to be congressmen? Whom do you serve?
2 comments:
why would you build refineries if you knew 1) it would cut into your short term profits and 2) oil supplies will be running out in a few decades anyway? the bottom line is- they would not be posting record profits if they were building refineries and making oil cheaper.
interesting.
does this report mention the fact that there have been no new refineries built anywhere in the US in the last twenty five years?
i seem to recall reading somewhere that the permits mentioned in this report are for retro-fitting, replacement of worn-out equipment, and replacement of the stuff that blew up.
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