Refinery capacity has decreased leading to higher crack spreads but pretty minor in the grand scheme of oil supply constraints

 

When we’re taking fuel prices, it isn’t. There’s articles from every corner of the news world discussing this problem in great length in 2022 when gas prices spiked.

We haven’t built a new refinery in the US since the 1970s. We can pump all the crude we want out of the ground, if we can’t turn it into something useful, it’s pointless.

 

So why don't greedy Billionaires (Musk, Bezos, Ellison, Buffet, Gates, Carlos Slim) build one(a refinery)? Are they not capitalists? Why wouldn't they go take the easy money? If you build it, they will come.

 

You tell me.

Obviously the money is from pumping it out of the ground and selling it to the suckers who turn it in MOGAS, plastics, and kerosene.

Maybe we just nationalize our refining capacity.

 

I guess I am not clear in my questions, or just don't understand. Initially you painted oil companies as greedy because they weren't building new refineries. That is a pretty derisive label right out of the box. Does a corporation that works for the shareholders(capitalism), owe it to society to invest in strategies that lose them money? Does Delta need to upgrade their IT department because someone(you) think there are better ways?

I agree, refined petrochemicals are a national necessity. If the government stepped in to build refineries, that would solve the problem. Will the Biden administration prosecute this course of action? Capitalism will not solve this dilemma due to lead time. By the time one administration comes in and says, "Drill , baby, drill" a new administration is elected that touts, " Shut down fossil fuel".

Therein lies the conundrum to planning 10 year projects that need decades to pay off.

BTW....... I'm a self ascribed idiot that doesn't keep up with the daily in's and out's of oil, but does understand long-term implications of politics, regulations and common sense.

 

Maybe we should keep Trainor.

 

Because of the crack spread?

 

I mean, if the shoe fits. "Greed is good". Until it isn't. That's why we don't have an unregulated free market.

Since we haven't had a new refinery built in 50 years demonstrates this isn't simply a partisan issue. Let's face it, politicians on both sides of aisle are in the pocket of oil companies.

Nationalizing refining capacity was partially tongue-in-cheek. No surer way to screw something up then get the government involved. That doesn't mean proper legislation can't force their hand. Something along the lines of not approving any new oil leases unless new refining capacity is introduced. Say new oil field is going to produce x-millions of barrels, refining capacity needs be increased x%.

Our capacity is usually around 85-90%. Refineries need to come down for maintenance, to be reconfigured depending on what blends they are putting out/what's coming in. Plus we've had numerous refineries not come back on line since COVID or get taken out by hurricanes (or just blow up).

 

If the government has actively announced its intention to shut your industry down to, "Save the planet," why on earth would managers continue making capital investments in said industry?

 

Because the people that run the industry don’t buy into that like the rubes who take their news from headlines from certain networks.

Besides, there’s always exports.