What year was the last oil refinery built in the USA?

1976





Don't fixate on the NUMBER of refineries. If I had ten refineries processing 1 million barrels of crude a year I could process 10 million barrels of crude a year. If I expanded each refinery to triple their output I would be able to process 30 million barrels of crude BUT I still have the same ten refineries. In the United States there are more than 150 refineries. Because of the severe environmental regulations it is much easier and cost effective to expand an existing refinery than to build a new one.





For the first seven months of 2008, U.S. oil demand declined to a five-year low compared with the same period in previous years. It is likely we will have excess capacity in the US in the near future.





The cost of oil is artificial. If there was competition the price would be about $15.00 a barrel. The recent oil price rise is OPECs attempt to find the ';sweet spot'; in oil prices. That is the highest price they can get without triggering a reaction that would lead to lower oil usage. They may have exceeded that number already.





The move to alternative energy has a pathway that can be halted. In any technology there is an initial phase that is inefficient. The older technology will dominate. If the new technology is nurtured it will progress through both increased productivity and economies of scale (learning curve and selling more). If nurtured, there will come a time when the new technology will wipe out the older technology. That is why solar, etc. have government subsidies. That is one way to nurture.





The problem with innovation is the huge artificially high price of oil. If you were an investor would you put your money into a new technology that could produce an electric car that could get a running price of $0.03 per mile? If you have a hybrid that gets 50 miles per gallon and gas is $3.50 per gallon that running cost is $0.07 per mile. WOW, a car that gets the equivalent of 100 MPG. Let鈥檚 put $100,000,000. into development of the car. Next month the price of oil is $50.00 a barrel and nobody wants to buy your car.


That is why investors aren鈥檛 doing as much as they could to develop alternativies.