On the Plus Side: Movement on Oil Refineries

By April 19, 2007Energy

While much of the country is turning away from the jobs, economic growth and critical energy needs represented by such things as LNG terminals or oil refineries, some places are progressive, working hard to improve the quality of life for their region’s citizens. After a spate of bad news of NIMBY ascendant, then, we turn to some positive developments on the energy front. Plans are afoot to build the first U.S. refinery since Marathon’s Garyville facility was completed in 1976.

A partnership of federal and state agencies charged with finding the ideal site for a new refinery has decided East Carroll Parish and Washington County, Miss., fit the bill…

The Delta Regional Authority — a federal/eight-state partnership that serves 240 counties and parishes — began looking for a site in 2001, though much of this week’s announcement centered on the importance of finding an inland location out of harm’s way of storms.

“When Hurricane Katrina and Hurricane Rita struck the Gulf Coast in 2005 within weeks of each other, we learned just how vulnerable our nation’s oil refining capacity is,” Pete Johnson, the authority’s federal co-chairman, said in a news release.

The DRA’s news release is here.

We had a chance to ask Red Cavaney, president and CEO of the American Petroleum Institute on a blogger call this week about the prospects for new refineries. He noted the odd dynamic: After Katrina disrupted refinery production along the Gulf Coast, the nation — policymakers and the media — recognized the need for greater geographic distribution of the U.S. energy infrastructure. Can’t afford to keep all our oil and gas needs in the Gulf Coast basket, so to speak.

But only those areas familiar with refineries, ones with an existing relationship with energy companies, are willing to embrace the jobs and economic activity refineries represent. To expand on Cavaney’s point, opponents elsewhere are able to play on fears — environmental, safety, etc. — to block new construction; the permit process should be called the “no permit process.” So we’re left with the Gulf; the sites being considered for the new oil refineries are adjacent to existing facilites. (Prospects for biofuels refineries are a bit more positive.)

One exception should be noted. A group called Arizona Clean Fuels is attempting to construct a greenfield refinery near Yuma. Cavaney said it has been slow going (although the group recently received title to the land needed for the facility, another step forward.) In any case, best of luck. Glad some folks are thinking about America’s energy security in a serious fashion.

P.S. A recording of the hour-long blogger’s call with Cavaney will be posted in the next couple of days at EnergyTommorow.org. And Mark Gongloff has good summary of the main topics of discussion at the Wall Street Journal’s Energy Blog here.