There is one group attempting to build new refinery capacity in the AZ desert near Yuma. They have been delayed for years by the permitting process.
azcentral.com
Yuma oil refinery supporters cheer Bush
Jun. 18, 2008 05:21 PM
The Arizona Republic
Officials trying to build an oil refinery near Yuma applauded President Bush's call Wednesday for speedier refinery permits, saying such action could have helped current gasoline supplies in Phoenix if enacted earlier.
Arizona Clean Fuels Yuma has been working more than a decade to build the state's first refinery and ease Phoenix's dependence on gasoline piped from Los Angeles and El Paso.
The refinery still faces several hurdles, including financing, officials said. But a quicker permitting process would have helped move the project along and avoid the run-up in building costs that has brought the estimated expense in 1999 of $1.5 billion to nearly $4 billion to construct the facility today.
"If the permitting process were streamlined, it easily would have shaved off years of time," project spokesman Ian Calkins said.
A new refinery won't cut down gas prices, which hit a record $4.09 a gallon Wednesday in Arizona, but at least the Valley that runs on its commuters' wheels wouldn't run dry. In 2003, lines formed at Valley gas stations and many ran out of fuel when a pipeline rupture near Tucson stopped eastern imports into the region.
"It won't solve all the problems of prices at the pumps and pipeline breaks, but it would certainly help in terms of increasing overall supply, providing more options to consumers when those inevitable problems in the system occur," Calkins said.
If the backers can find financing, the plant could open no sooner than 2012, he said.
"The assumption is, if we had the air permit earlier, we would have commenced the financing phase earlier, too," Calkins said. "If we had a two or three year head start on that process, it is conceivable we would be under construction now. We'd be reaping the benefits of additional refining capacity today."
It would produce 3.57 million gallons of gas per day, and 1.47 million gallons of diesel, essentially meeting Phoenix-area demand. People in the Phoenix area buy about 4.9 million gallons of fuel a day, according to Weights & Measures. The refinery also would produce diesel jet fuel.
Arizona Clean Fuels' project is one of two new refineries being proposed in the United States that would be the first in the nation since 1976.
Earlier this month, Union County, S.D. residents voted to rezone farmland for a $10 billion refinery to be built by a Texas company.
Since the 1970s, the nation has been meeting increased demand with expansions at existing facilities.
"It's not that we've been lacking capacity for 30 years," said Bill Holbrook, spokesman for the National Refiners and Petrochemical Association in Washington, D.C. "We've done it through expansions."
But proponents of Arizona's refinery said new facilities would ease the pressure on existing refineries to run at maximum capacity. Despite the efficiency of existing refineries, the nation still imports some finished gasoline, in addition to most of its crude oil.
The Yuma refinery developers are in "advanced discussions" with two potential financiers for the next phase of the project, and are working to secure land contracts with the state for the project that has twice relocated, from south of Phoenix to Yuma when new air-pollution rules were put in place, and then to a new Yuma-area site when a Native American tribe sued over the possible impact on artifacts.
The backers won approval from the Mexican government to pipe crude oil from a port in Baja California across the Sonoran Desert to Yuma, but still would need to build that pipeline, Calkins said.
The finished fuel would be piped to Phoenix using the existing Kinder Morgan Energy Partners line linking Los Angeles and Phoenix.
"The bigger challenge is financing," Calkins said. "It is extremely difficult for a grassroots project to obtain financing. Costs for the project simply continue to go up."
Valley gasoline stations would welcome the added supply from the refinery, if it can be built.
"Anything that brings greater supply, additional refineries or working on our fuel specifications for the state, would be a good thing for gasoline retailers across the state," Arizona Petroleum Marketers Association Executive Director Andrea Martincic said.
When the state added its first ethanol refinery last year near the town of Maricopa, it helped stations meet the demand for that fuel additive, which is required in the winter in Phoenix and mixed with gasoline in a 10 percent blend in many places outside Phoenix.
"Now a lot of my members don't have to rely on getting (ethanol) from rail," she said. "They can pull into Maricopa and get it themselves. The concept of (an oil) refinery would be beneficial to everybody." |
