Why are there no new Oil Refineries built lately when price of Oil today is higher than it was 50 years ago?
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Why aren’t new refineries being built?
Easy answer: politics.
The regulatory requirements for building new refineries is such that it is practically impossible. No one (ie voting citizens) want a refinery built near them due to the adverse effect it would have on the environment and their property values. So government (Federal, State, and local) make it such that it is impossible to do.
We have a huge problem in this country with NIMBY (not in my back yard). We need new refineries, new power plants, new gas pipelines, new power lines, but we don’t want them near us. We want them near someone else.
Kevin O’Leary is planning on building one…
https://fortune.com/2023/04/12/shark-tank-kevin-oleary-oil-refinery-hydrocarbons-production/
Many old refineries are grandfathered in to less stringent regulations. “Old” refineries also get expanded, reworked, etc. Like an old house with a renovated kitchen, additional bedroom, etc.
Oil company spends a billion to build a new refinery. There’s more product available, which drops prices. No company is going to invest a lot of money to decrease their profits.
Refineries aren’t the bottleneck causing high oil / gas prices in most cases. Refineries are hugly expensive and time consuming to build, and given the fluctuation in oil prices, given the move toward EV’s, etc. it’s most likely not worth the huge investment in new capacity now.
The question is invalid as it’s based on a false assumption that no new refineries are being built.
Here’s the list of new refineries in the USA:
[https://www.eia.gov/tools/faqs/faq.php?id=29&t=10](https://www.eia.gov/tools/faqs/faq.php?id=29&t=10)
8 opened in the last 8 years. Meanwhile zero opened in the 17 years before that.
We’re in a oil refinery boom by that data.
Getting a permit for an oil refinery? In this political climate? Good luck.
It is much cheaper to upgrade and expand on a 50 year old plant than to even think about building a new one.
for new construction from concept through planning, permitting and construction 10+ years
now toss in environmental protestors and changes in government too much risk to build
Bonus question: what if the us gov built an oil refinery for the military/gov gas supply and sold all the excess to the public. Good idea?
Do you want an oil refinery in your town?
I didn’t think so.
Basically that’s one of the main reasons. They are also extremely expensive to build and maintain, and why invest the money into it if the ROI isn’t there?
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