Crude Numbers

21 Jul 2008 04:21 pm

By Patrick Appel
A reader writes:

In the "The Drilling Canard", Patrick Appel cites this quote from Howell Raines as part of an "explanation" as to why oil companies are to blame for $4+ gasoline: "The oil companies themselves choked supply by closing more than half of their 300 U.S. refineries in the past 25 years."

Sorry to contradict theology with facts, but U. S. refining capacity actually increased by 11% in the last 23 years.

Stats from DOE Energy Information Administration show refining capacity in 2008 as 17,588 TBD (thousand barrels a day of crude distillation capacity) vs. 15,659 TBD in 1985 (earliest year for which data is on-line).

Yes, in the last 25 years, a lot of small, inefficient plants were shut down.

These shutdowns were more than offset by significant expansion of capacity at larger, more efficient refineries, which can process a much wider range of input (not just "light, sweet" credit). In addition, these larger plants have much more complex secondary refining capacity (e.g. catalytic crackers, reformers, desulfurization units) so that they actually squeeze out much more usable products from each barrel of crude, so that net production capacity has probably increased more than the above stats would indicate. Also, the more complex refineries meet higher standards for product quality (e.g. lead-free, "clean" gasoline) and refinery environment and safety.

The U.S. petroleum industry ain't perfect, but they're not quite the villains that know-nothings like Raines would claim, based on made-up facts.

Last year Robert Rapier looked more closely at refinery capacity.

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