Now comes news of the latest expansion, an oil sands-driven deal between BP and Canada's Husky Energy. The two have agreed to form two 50:50 joint ventures to bring bitumen from Husky's Sunrise oil sands project in Alberta to BP's refinery in Toledo, Ohio. The Husky/BP downstream JV plans to expand bitumen processing capacity at Toledo to 120,000 b/d, with total throughput to grow to 170,000 b/d by 2015. The refinery currently has capacity of 155,000 b/d, although current throughput is about 135,000 b/d, including 60,000 b/d of heavy sour crude. The bitumen for the project will come in part from the expanded oil sands output envisioned in the upstream part of the Husky/BP venture.

This is not even all that big compared to some recent announcements. For example, in September Shell and Saudi Aramco said they would proceed with a plan at their joint venture Port Arthur, Texas refinery that would add another 325,000 b/d in refining capacity. A stand-alone plant that big would be one of the largest in the country. But because it's an expansion, and not a new refinery, it didn't get anywhere near the attention that a new plant of that size might have received.

And the list goes on. Marathon's Garyville, La. plant is going to grow. So is Chevron's Pascagoula, Miss. refinery. A Petrobras-owned refinery in Pasadena, Texas is going to be doubled in size.

That's just the US. The fact is that a new refinery built anywhere in the world impacts the global supply/demand balance, particularly given the fact that many of the new plants are being built to produce US-quality gasoline and diesel. India has massive new projects on the drawing board, and so does South Korea.

The UK research firm of WoodMac currently estimates that there are 122 new refineries on the drawing board. If all of them came on stream in the next 10 years as announced, together with another 109 expansion plans, there would be an additional 23-milion b/d of crude distillation capacity globally. This would be way ahead of Wood Mac's own oil demand growth forecast of 17.25-mil b/d in the same 10-year period. But WoodMac also has rated all the announced projects so far and concluded that only around 13 mil b/d of new or axpanded capacity is realistically likely to come on stream. Whatever becomes of that balance, the US will be affected, even if the vast majority of those projects are constructed abroad.

The North Koreans like to extoll the virtue of juche, or self-sufficiency. Look where it's gotten them. It's not as if having no refineries in the US wouldn't impact the country; it would. But if a new refinery is built elsewhere, or if an existing refinery in the US expands, it ultimately has the same impact as building one from scratch in the 50 states. So maybe the lack of a new one should be viewed as a non-issue.