Joan, certainly.
I do not know how much we locally refine and this may be of interest. Likewise I do not know precisely the statistics re changes in local refining capacity, over the last several years. If you are interested 'Hydrocarbon Processing' (do a search) might be a source. I am aware of several large refineries shutting down over the last several years, but maybe this trend was offset by other expansions - just don't know for sure.
Just off the top we locally produce about 6 MM barrels of crude a day and import 10 MM. We pump a lot of crude around to various refineries, as they are not all located along the coasts where the various imports come in, nor are they all located in areas of production. Upon completion of refining we then pump and transport product, again over large areas. We could just as easily transport refined product from the get go, and indeed we presently do, in many instances.
I think to a certain extent gasoline refining is offshore, today. There are some large refineries, for example, in the Caribbean. One of the largest off the top is owned by Amerada Hess, and it is large.
Reasons - environmental regs are one. I doubt many countries are as we are. This issue in not any longer insignificant. Lack of profit margins another. Refining is very capital intensive, and the profits just haven't been there.
The lack of profit margins in these capital intensive industries is something I do not fully understand. Steel is also an example. I don't think our productivity is a problem. I have worked overseas, and our industries by comparison are not that poorly ran (imo). I've wondered if cheap financing, via the IMF for example, allows other countries a cheaper supply of funds, than what we internally furnish.
It will be interesting to see what happens to these capital intensive industries, after this bear concludes.
As to your comment about location, don't know for sure, but I suspect it has more to do with location to proximity of crude sources. The crude can be supplied by local area production, or pipelines, but it must be present. A lot of crude is pumped north into the heartland from the Gulf, through Cushing, OK. |
