I don't agree. I'm sure that fact about the EPA only getting one request and regulations not preventing new refineries is true. But that doesn't mean that environmental regulations are not dampening interest in building domestic refineries. Permits I am sure are available, but as I understand it, the cost of building new refineries is quite high, in part due to environmental regulations.
I think that we're going to have to agree to disagree here. While the higher price of environmental regulation can be applied to new refineries, other industries also face similar regulations. Smelters, sawmills, power plants and the like all face costly environmental regulations in new construction, but there are still new construction of these facilities going on, especially since the mid 1980's. Furthermore, does it make sense to outsource our pollution to nations with less stringent environmental practices? That is essentially what the environmental regulations preventing new refinery construction boils down to. Personally, I don't buy that argument, but if I were too, there would be the outsourced pollution issue to deal with. And lastly, while it is true that some environmental regulations are probably somewhat extreme, sensible regulation is necessary. This regulation not only serves to preserve the environmental interests of the locality of the facility, but also serves to protect the taxpayers for the cleanup costs incurred when a business closes and leaves a polluted area behind. Ever see what the cost estimates are for Superfund sites? Well, that last one wasn't actually last, but the problem with your argument is that it rests on an undocumented assertion, in that it's so hard to get a permit, or to find a locality willing to allow a refinery, or the regulation is too costly. Yet only one was applied for, and it was granted. I find it difficult to believe that if 20 permits were requested, only that one would be granted.
Also, there is a NIMBY factor when it comes to getting local permission to build oil refineries. Refineries are big and ugly, and come with the problem of being oil refineries. People don't like having them around. Which is, to put it mildly, ironic for a country of people who like to drive everywhere.
No doubt this is true for some locales, but I don't believe that it applies to all localities, or even most. There are a lot of dying towns where refineries could locate, with local support. Within 100 miles of my home here, there are three refineries: Shell in Anacortes, Tesoro in Anacortes, and BP/Arco in Cherry Point, north of Bellingham. 95% of the work I do is in those three refineries or is related to them. Refinery work is high paying work, though somewhat dangerous. I find it hard to believe that most locales would reject a refinery that pays excellent wages (especially in the current wage climate of today, when fewer manufacturing positions are giving way to a larger, lower paying retail sector) and may be a mild risk for pollution. Anacortes and Skagit County in general have some of the cleanest air in Washington State.
Yes, I'm sure the oil companies are interested in increasing profits, as I would expect any healthy business to be.
And I agree here Prince, as I said I'm not a member of the Hate Big Oil crowd. I do believe that the reason that they're giving for not building new refineries is a poor one though, it would be more honest (though definitely unpopular) to say that it's not economically feasible, rather than blaming environmental regulation and the related costs for the matter.
But frankly, I don't agree they that are seeking to artificially suppress supply
Then why aren't they (oil companies and refiners) building more refineries, if not here, then elsewhere? Why the buyouts of independent refineries, and the subsequent shutdown of their operations? The whole thing reeks of artificial suppression.
People buy less gasoline the more expensive it becomes.
Not trying to be facetious here Prince, but do you have stats to back this? I recall that gasoline consumption didn't drop at all until the past few months, for the first time in 16 years. And I believe, most of this drop was due to the rise of ethanol, flex fuel, biodiesel, and a declining economy in general. If what you say is true, then when gas went from $1.85 to $2.85, that consumption should have dropped, but I don't remember it doing so. Then again, my recollection may be faulty.
People buy more gasoline the less they have to think about the cost. Low prices are in the oil companies' best interest, and they know this.
Gasoline isn't Cheeto's or the newest plasma TV, it's a necessary commodity, especially in rural areas. I disagree with your argument, people have to buy gasoline no matter what the cost, or else they can't commute to work, farm their fields, or pull that timber down off of the mountain. The increased cost of gasoline may or may not be passed on to the consumer, but someone who commutes 50 miles to work isn't going to ride a bicycle to work, or rely on a bus/mass transit system that isn't there. They may buy a more fuel efficient vehicle, but that's if their economic means allow for it, which isn't always the case. I'd submit that the gasoline purveyors have that person by the balls (if they have them) either way that they go about it.
If low oil prices are in the company's best interests, then why are record profits being posted? By your line of thinking, the higher prices should lead to lower profits, but they don't. By suppressing supply (and as I've stated, I believe artificially so) and the inability/unwillingness of the consumer to lower consumption, it's a perfect economic storm that benefits oil companies. With all of that said, I don't think that the high prices are all the fault of the oil companies, though I think they have a hand in it. A jittery market that reacts by raising oil $25 a barrel if someone throws a rock at an oil tanker is also a large part of the problem, as is the consumer who could reduce consumption reasonably but refuses to.
