24-06-04
US Energy Secretary Spencer Abraham asked the National Petroleum Council to
study the country's oil refineries, looking particularly at how to increase
production capacity.
"Such a study will give further understanding to the complexities of the
ever-changing oil and gas markets, and will help us address this challenge head
on," Abraham said, pointing out that no new refineries have been built in
the United States since 1976.
The Energy Information Agency projects US gasoline demand to increase by 43 %
and diesel by 48 % by 2025. The agency also expects the country will need 28 mm
bpd of oil to meet its demand in 2025. The projected refining capacity is
expected to only reach 21 mm bpd by that point.
"The American people need to know how we are going to address these
challenges," Abraham said.
The energy industry clearly has one major target of blame for declining
production and refining capacity: environmental regulation.
"The rules and regulations are so stringent that the cost of building here
is many times more than what companies would spend to built a still
environmentally friendly refinery offshore," said Bruce Bell, chairman of
the Mid-Continent Oil and Gas Association of Oklahoma. "We have to take
sensible approaches. We need to base our regulations on science, not on
somebody's idea of what the world should be like."
Bell said strict regulations by the Environmental Protection Agency and other
government agencies have driven companies to build refineries in the Caribbean,
Venezuela and the Middle East rather than in the United States. The result, he
said, is more expensive imports and increased dependence on other countries.
While the energy industry has said the solution to lowering the cost of gasoline
is increasing production and refinery capacity, environmental organizations say
a better answer is to decrease demand.
Secretary Abraham also called for the petroleum council to implement a new
system that would provide natural-gas production information in 60 daysrather
than the current 120.
He also asked the group to study how much crude oil the country must have in
inventory to meet current demand.
Source: VNU eMedia