July 14 (Reuters) - U.S. oil refining capacity fell for the first time since 2003 as the weak economy reduced demand for gasoline, diesel fuel and other petroleum products, the Energy Information Administration said on Wednesday.
There were 148 refineries at the beginning of this year with an operating capacity of almost 17.6 million barrels per day, down 87,760 bpd from last year, the Energy Department's analytical arm said. It the was the first decline in total U.S. refining capacity since 2003.
The decline in capacity was due mostly to the shutdown of two refineries, Sunoco's (SUN.N) 145,000 bpd Eagle Point refinery in Westville, New Jersey and Valero's (VLO.N) 182,200 bpd Delaware City, Delaware refinery.
Those two shut refineries were offset, in part, by the 180,000 bpd expansion of Marathon's (MRO.N) Garyville, Louisiana refinery, the agency said.
Going forward, the EIA expects continued excess refining capacity due to higher vehicle fuel efficiency standards and congressional mandates for the U.S to use more renewable fuels that "will limit the potential for growth in petroleum demand."
So just to recap: We are using less gasoline, in part because of the economy, in part because people are driving more efficient vehicles, and that doesn’t appear to be changing any time in the future. This is a good thing.
It also means the refineries are cutting back on their production and idiots like Jeff Hartline, who claim we need to build more refineries in this country, need to shut their yaps (and just as an aside, would someone for once please ask these people just where these refineries are supposed to be built? You think TN-5 wants an oil refinery in their back yard? Really? Unless you want to build the refinery in the district your’re running for, zip it.).
I’ve written about the refinery issue before, notably here and here.
We don’t need new oil refineries; we aren’t using the ones we’ve got. What we need is a national energy policy that further moves us away from dirty energy.
