The Detroit News: New refineries aren't built in U.S. anymore (ShellNews.net)
By H. Josef Hebert / Associated Press
1 August 04
WASHINGTON — It’s a good time to be in the oil refinery business. Demand for gasoline is high and profits are pouring in at a record clip.
With that combination, you’d think oil companies would be falling over each other to build new refineries. Not so. There hasn’t been a new refinery built in the United States in 28 years and more than 200 smaller facilities have closed.
Refining never has been viewed as a cash cow by the petroleum industry, which complains about meager profits, hefty environmental costs and too much government regulation.
But with gasoline prices hovering at $2 a gallon for much of this year, the country’s largest oil companies and independent refiners reported soaring profits from refinery operations in second quarter earnings this week.
Exxon Mobil Corp., the world’s largest publicly traded oil company, posted record profits of $5.79 billion Thursday, and the Royal Dutch/Shell Group of Cos. saw its earnings rise 54 percent.
An early hint of the industry’s healthy bottom line came last week from Sunoco Inc., which reported a $217 million profit from refining related business, quadruple the total from a year ago.
The refineries set production records during the first half of the year, including 8.6 million barrels of gasoline a day, but still couldn’t keep up with demand, the American Petroleum Institute reported Tuesday.
Still, no major oil or refining company appears eager to add a new refinery. Instead, more could close. A refinery in California is expected to shut its gates this fall. Two Texas refineries have been on the market for three years with no takers. And an offer by Saudi Arabia to help build several U.S. refineries brought not even a hint of interest on Wall Street.
“Today investors are in no mood for refinery building even if funding were available,” Arjun Murti, managing director of Goldman, Sachs Co., told a recent congressional hearing on the dearth of U.S. refining capacity.
http://www.detnews.com/2004/business/0408/01/b04-228496.htm