Monday, May 09, 2005

Oil Refineries--A National Security Issue?

No New Refineries in 29 Years? There Might Well Be a Reason
By JAD MOUAWAD
Published: May 9, 2005
http://www.nytimes.com/2005/05/09/business/09refinery.html?

More refining capacity will almost certainly be needed. Gasoline demand is forecast to rise 39 percent by 2025, to 12.9 million barrels a day, up from today's 9.3 million barrels, according to a long-term outlook by the Energy Information Administration. By then, gasoline alone will account for nearly half the crude oil consumed in the United States.

There exists much illusion in the Above statement, as current Crude Oil pumping could not accommodate such a large increase, combined with a projected reduction in the driving Population by 2025. It stands as no exaggeration to say We are lacking in sufficient Oil Refining capacity. George W. Bush suggested turning some of the closing Military bases into Oil Refineries. This does not adequately resolve the Issue.

Author's Proposal:

A Presidential declaration that lack of Oil Refining capacity is a National Security Issue. This to be combined with a direct proposed Bill to Congress requesting Nine Oil Refineries to be built and supervised on active Military bases, with the capacity to produce 3 million barrels of Gasoline or Heating Oil per day. These Oil refineries are to be owned by the Government, who can direct the supply of Fuels to the Military or other necessary Government tasks, but will be leased to the Private Sector, and will be allowed to provide excess capacity to the Private market. The Leasee must pay a Rent sufficient to pay the Cost of Capital equipment amortized, but will receive an Contractual price for supply to the Government maintained within 10% of current Private Sector market price for equivalent Product.

The National Security activation negates necessity for State and Local Permits etc. for Emissions standards, and reduces Federal Permits to a minimum. Government construction of the facilities circumscribes the development of Private Sector concentration of Capital to build the capacity. It is not good from a Big Government involvement in Private industry; it simply accomplishes construction of necessary refining capacity. lgl

2 comments:

spencerengland said...

The oil refinery issue is a red herring.

With domestic crude oil production falling what would the additional refieries refine, especially if our foreign souce of oil is cut off.

why should it make any difference whether we import crude or refined product?

Bill Adams said...

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Bill Adams