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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: Broken_Clock who wrote (1065)	1/24/2006 9:36:24 PM
From: hubris33	Read Replies (1) \| Respond to of 50179

TITE- I have seen ALJ and am NOT impressed. Sure it may go up while there is hype and as demand/supply remains tight, but it isn't going to last in the long run. Elsewhere I have seen where a number of the big refiners are looking at significant capacity expansions, expansions that dwarf this company's 70M-bbl/d capacity. 70M bbl/d refining capacity is a tinker toy. It is way too small unless if fills a specific niche market. Most of the small refineries have gone the way of the Edsel because in the long run they are too small to be economically feasible. Refining is a capital-intensive business, lots of money is needed for maintenance and periodic outages just to keep safe/efficient operations, let alone the upgrades the operators or engineers want. At some point we'll hit the down side of the refining cycle and the next time we will loose a bunch more of these small refineries. Part of the problem is that the environmental regulations keep changing. Right now we are in a period of ramping up for clean diesel and millions are being spent at each plant to upgrade the technology. Without the tremendous margins we are currently in, the CapEx expenditures could not be justified for a 70M-bbl/d facility and these facilities would run until they hit the regulatory wall and then shutdown. H3