05-18-2004, 02:04 PM
05-19-2004, 04:58 PM
Kerry would surely oppose issuing ne permits for Refineries
America Must Build Refineries If It Wants Cheaper Gasoline
Demands for more fuel and less pollution can't be met by current refining capacity; prices likely to stay high
The Detroit News
Motorists experiencing sticker shock at the gas pump should get used to it. Unlike previous years, gas prices aren’t likely to come down any time soon.
America’s reluctance to build new oil refineries is catching up to it, and consumers are paying the price at the gas pump.
The spike that has taken a gallon of gas above $2 is not unusual for this time of the year, when motorists start traveling more. But this year, worldwide demand for oil, particularly by China, has soared at the same time the oil exporting countries are tightening supplies. In addition, the uncertainty in Iraq has fueled fears of future oil shortages, raising prices.
Those factors are compounded by new federal rules that restrict the use of high-sulfur gasoline that contributes to smog. Those rules, which went into effect earlier this year, place 150,000 barrels a day of regular crude oil from Saudi Arabia, Venezuela and other countries off limits to America. The country now relies more on higher cost “sweet crude,” which has a lower sulfur content.
Cleaning up the regular crude to bring it into compliance with the new sulfur requirements is possible. But the United States doesn’t have the refinery capacity to do so.
Existing U.S. refineries are already operating at near full capacity because this country hasn’t added new refineries in 20 years.
That’s when the Environmental Protection Agency implemented tougher Clean Air Act regulations, including a program that requires refiners, along with other utilities and industrial plants, to take expensive steps to cut factory emissions when they expand capacity or build new plants.
Many refiners couldn’t meet the requirements and have gone out of business. In 1993, the top 10 refiners controlled 56 percent of the market. Today, they control 78 percent.
That wasn’t a problem as long as foreign suppliers filled the gap. But Ben Lieberman of the Competitive Enterprise Institute, a free market think tank in Washington, D.C., says foreign refiners are less interested in blending the complex fuel formulas required for the American market now that other markets are buying more gasoline.
Clean air is obviously a priority with Americans, as it should be. But they also want cheap gasoline, as witnessed by the current outcry. And they want to keep using more fuel each year.
Americans have to reconcile their conflicting desires.
Unless refining capacity is expanded, and quickly, $2-a-gallon gasoline will be here to stay.
Changing the low-sulfur requirement is not an option because refiners have already made expensive upgrades to their facilities to meet it. But regulators could re-examine the requirement to burn so many different grades of reformulated gasoline during summer months to determine if a single, nationwide blend might meet the goal of reducing air pollution.
But more important, Congress could reform the Clean Air Act to clear the way for expanding refineries. The Bush administration offered a proposal to do that without jeopardizing air quality, but it’s stuck in the courts.
As long as it stays there, motorists can expect to keep digging deeper into their wallets to fill up the gas tank
05-19-2004, 05:38 PM
The thing that disgusts me about the fuel issue is that we have the technology, the ability and the know-how to use ethanol, LP Gas, etc but we refuse to look at cheap clean options in lieu of our addiction to oil.
05-19-2004, 05:45 PM
Drbio... I don't claim to be an expert but both you and I may be over our head here. Especially with respect to Ethanol. The farm bill for example had a huge chunk of change for using ethanol in gas but from what I hear it's pretty expensive even when compared to 42/barrell oil.
It will be interesting to see how to actually get out of this oil mess. It seems that the hybrid cars will be one way, in fact the absolute best way to get away from the american dependence on gas is for it to do just what it's doing, prices go up, the market place will solve this a lot quicker than the gov' will.
I know that kerry and the democrats feel that this is the right solution as kerry in particular has advocated raising gas taxes to do just that. It's sad when even the things that you would feel the democrats could make a solid case for (at least by ignoring it) they can't get over their desire to pander.
Listening to Dick Morris yesterday he probably said it best, (paraphrasing) "the american people just aren't on-board with more exploration, they want conservation." Of course one of the best ways to GET conservation is to let the prices rise.
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