tag:blogger.com,1999:blog-3575804792126536975.post6439249097711710340..comments2023-11-02T00:33:00.040-07:00Comments on Sowell's Law Blog: No Economic Recovery YetRoger Sowellhttp://www.blogger.com/profile/15390264574157209871noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-3575804792126536975.post-12069939746740169482009-10-30T23:07:22.842-07:002009-10-30T23:07:22.842-07:00One thing that can be said, from inspection of the...One thing that can be said, from inspection of the chart, is that there are PLENTY of refineries in the US. When an industry has an operating rate of less than 90 percent, it is foolish to build new capacity. This applies to any industry, not just oil refining. <br /><br />Those who state that the US has high gasoline prices because there are not enough refineries, therefore we should build more refineries do not know of which they speak. <br /><br />A couple of refining companies have spent money for major capacity expansions (Marathon in Louisiana, and Motiva in Texas) but these are turning out to be rather poor decisions. <br /><br />Marathon is starting up the Garyville, Louisiana expansion presently (4Q 2009), when overall utilization is in the very low 80 percent range. This means that their profitability relies on their ability to have lower operating costs than another refinery, due to having the latest technology in their plant. If they are successful, they will drive another refinery out of business. Sunoco has already announced they will shut down a comparable sized refinery, with no intentions to restart it.Roger Sowellhttps://www.blogger.com/profile/15390264574157209871noreply@blogger.com