Need to simplify permitting for new refinery construction: Bush
New York (Platts)--27Apr2005
President George W. Bush said Wednesday federal agencies will work with state governments to spur the construction of new refineries where former military bases once stood. "I will direct federal agencies to work with states to encourage the building of new refineries on closed military bases, for example, and to simplify the permitting process for such construction," Bush said in a televised speech to the Small Business Administration. He provided no details about the proposal, which he mentioned only briefly during remarks that covered familiar territory, particularly seeking ways to reduce America's reliance on imported crude oil and refined products. Bush noted no new refineries have been built in the US since 1976. Potential builders have been given pause by the uncertain economics and cyclical nature of the refining industry, as well as onerous permitting. "By easing the regulatory burden, we can refine more gasoline for our citizens here at home. That will help ensure supply and reduce dependence on foreign sources of energy," Bush said. The Bush refinery proposal comes two days after the Saudis pointedly noted in Crawford, Texas, what OPEC as a whole has long bemoaned: that a shortage of refining capacity in the US and resulting bottlenecks have contributed mightily to the run-up in gasoline prices. While the failure of the US to build new refineries in more than 30 years has been lamented by numerous analysts, the fact remains that the US shut a significant amount of excess, uneconomical capacity in the last 15 to 20 years. Any new refinery rolled out during the 1980s and 1990s would have immediately run into weak refining margins that have reversed themselves only in the last few years. And the one plan for a new refinery that is on the boards -- in Yuma, Arizona, near the fast-growing Phoenix market -- is the subject of significant skepticism that it can be successful. This story was originally published in Platts Global Alert http://www.globalalert.platts.com
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