House OKs bill to boost refinery capacity

[cal04]

The House approved legislation Wednesday that supporters said will make it easier for oil companies to build or expand refineries, although opponents said it could lead to more pollution and less local involvement in the siting of
refineries. The bill's sponsors argued that refinery constraints have added to the tight gasoline market that has seen prices at the pump soar to more than $3 a gallon across most of the country. But they acknowledged the measure is not intended to address this summer's high gas prices. Earlier in the day at a House hearing, the head of the Energy Department's statistical agencies said he expects crude oil prices — which have been hovering above $70 a barrel — to remain high into next year.

"This is an industry straining to meet the demand facing it," Guy Caruso, head of the Energy Information Administration, told a House Government Reform subcommittee hearing. He said limited refining capacity has added to the tight market. Separately, Alan Greenspan, former chairman of the Federal Reserve Board, told a Senate hearing Wednesday that while the U.S. economy has been able to absorb the surge in energy costs up until now, some impacts are beginning to be felt on economic growth. The House passed the refinery legislation by a vote of 238-179. But its prospects in the Senate are uncertain. Last year a similar bill failed to get out of committee amid solid opposition by Democrats and moderate Republicans.

Rep. Joe Barton, R-Texas, a leading advocate for the refinery measure, said the bill was aimed at addressing "long term security issues" and not current gasoline prices. He argued that long delays in getting federal, state and local permits has kept oil companies from investing in new refineries. The bill would streamline the permitting process, impose a time schedule for state and local decisions on permits and create a new federal office to coordinate refinery approvals. It also would direct the president to single out three or more closed military bases for potential refineries.
Only a few Democrats supported the House measure. "We need to build more refineries," said Rep. Rick Boucher, D-Va., but the GOP bill "is simply not the answer. ... Environmental permitting is simply not a problem."

Democrats maintained that the proposed streamlining would weaken state and local officials' ability to consider environmental impacts and allow the federal government to dictate a schedule for refinery approval. They also worried that a community may have a refinery forced on them at a nearby closed military base. "It preserves all environmental statutes," countered Barton, who also said local authorities would have a say on the use of a military base. Democrats proposed, instead, creation of a string of government-run refineries that would be used to supply the military in normal times, and supplement commercial refining activities if there is a disruption or other energy emergency. But Republican leaders barred amendments to the bill. An attempt to force a vote on the Democratic proposal failed 223-195.

http://news.yahoo.com/s/ap/20060607/ap_on_go_co/refineries_2

[HysteryDiagnosis]

1. "This is an industry straining to meet the demand facing it,"

As if the Federal Government couldn't make this happen with YOUR MONEY that they are already pissing away on crap that NO ONE NEEDS.


http://www.energy.ca.gov/oil/refineries.html




Complex refineries have the highest utilization rate at approximately 95 percent. Utilization rate is the ratio of barrels input to the refinery to the operating capacity of the refinery. Complex refineries are able to produce a greater proportion of light products, such as gasoline, and operate near capacity because of California's large demand for gasoline. Permitting Issues. It is unlikely that new refineries will be built in California. In fact, from 1985 to 1995, 10 California refineries closed, resulting in a 20 percent reduction in refining capacity. Further refinery closures are expected for small refineries with capacities of less than 50,000 barrels per day. The cost of complying with environmental regulations and low product prices will continue to make it difficult to continue operating older, less efficient refineries.

To comply with federal and state regulations, California refiners invested approximately $5.8 billion to upgrade their facilities to produce cleaner fuels, including reformulated gasoline and low-sulfur diesel fuel. These upgrades received permits since low-sulfur diesel fuel regulations went into effect in 1993. Requirements to produce federal reformulated gasoline took effect at the beginning of 1995, and more stringent state requirements for CARB reformulated gasoline went into effect statewide on April 1, 1996. That requirement was removed by Governor Gray Davis when it was found that the oxygenate, methyl tertiary butyl-ether or MTBE, was leaking from some underground storage tanks and polluting water supplies. MTBE was phased out and removed as of December 31, 2003, and replaced by ethanol.

[seasat]

2. Refinery shortage is joke

Some Repug a while back went off with me on how Refineries have declined due to us environmentalists. I went on the DOE website and did a search to find out what they had to say about the decline in refinery numbers. The first big decline occurred back in the early 80s when Reagan stopped federal subsidies to smaller refineries. About 100 refineries closed because they could not operate with out the subsidies. The second big decline was due to mergers in the 90s. The companies figured they could make more profit by closing older refineries and upgrading the new ones. If I recall the figures correctly, the cost of environmental compliance was only about 5% of the profit of the Refinery operation ... not revenue, but profit. Therefore, we're now going to reward oil companies that are making obscene profits with another gimmie and it won't make a difference in gas prices.

[Toucano]

4. That's the whole issue in a nutshell, seasat.

You've summarized the situation beautifully.

Now, why can't the media report the facts?

[FloridaPat]

3. But Saudi Arabia said there was a glut of oil!

[struggle4progress]

5. Ah, the glorious invisible hand of the market: rising worldwide demand,

increased instability in the Middle East, and declining US production produce record oil company profits, which in the true capitalist spirit are reinvested -- to lobby Congress for handouts ...