We have not had a new oil refinery built in the USA in something like 40 years. We really need more refining capacity, as I understand it.

Cushing Oklahoma (huge number of oil storage tanks, and deemed to be the point where oil capacity is estimated, the pipeline crossroads of America, soemthing like that), and Victoria County TX are in the running for a 5.6 Billion Dollar refinery.

This is great news!!

................

Cushing is one of two sites competing for a $5.6 billion “next generation” refinery that, if built, would be one the country’s largest, processing 250,000 barrels of light crude daily.

Cushing and Victoria County, Texas, were chosen as finalists for the refinery by El Campo, Texas-based Southern Rock Energy Partners. Steven Ward, managing partner at Southern Rock Energy, told The Oklahoman the operation, the first major refinery to be built in 40 years, will feature several green energy features that will include use of solar power and recycled water and cut 90% of emissions associated with existing refineries.

“We have the opportunity to do what everyone has wanted to do,” Ward said. “We have a clean slate. We don’t need to make modifications. We get to do everything for the first time. “

If Cushing is chosen, it is projected to see the creation of 1,250 temporary jobs during three years of construction with a permanent full-time workforce of 423 employees. Southern Rock Energy forecasts an impact of $3 billion during construction and $150 million annually upon completion.


Cushing, with a population of 8,200, is known as the “pipeline crossroads of the world,” with more than 430 oil storage tanks spread out along the edge of town. Bruce Johnson, director of the Cushing Economic Development Foundation, said discussions with Southern Rock Energy began about two years ago.

“This would be big for the state of Oklahoma, not just Cushing,” Johnson said. “It’s the biggest thing for Cushing since the late 1980s. And if you build up the proper infrastructure, that can open things up for secondary and tertiary industries to come in behind it.”

Plans call for new infrastructure to include an eight-bay truck terminal and a 300-car rail terminal.

“If you’re going to be refining crude to sell it and market it, you have to be close to where it is going to be sold or near the product you’re going to refine,” Johnson said. “Cushing has a lot of pipelines in and out, but none are designated for a refined product. It's all raw product being shipped in and out.”
Cushing was once home to 53 refineries, but the last one was closed by Kerr McGee in 1987.

“As these refineries get older, they’re taken offline, and they don't get put back online because it’s not cost effective to do that,” Johnson said.

Ward said the project isn’t possible without the finalists offering "strong support," including undisclosed economic incentives. The Oklahoma State Department of Commerce declined to comment on the project citing its policy of not discussing proposals without a chosen location.

Ward said the refinery will process light crude, which is produced in the Permian, Eagle Ford and Bakken basins and is more plentiful than it was when older refineries were built due to the emergence of shale crude.

“We have an abundant supply of domestic energy,” Ward said. “But the configuration of the current refineries is for heavier crudes produced in Venezuela, Saudi Arabia and Mexico.”

Ward said the refinery will be the first designed and built to take advantage of green energy technology. He said the refinery will produce blue hydrogen with carbon capture to reduce water consumption by 90% and recycle 80% of waste water. Plans call for the refinery to be powered by 100% renewable electricity sourced by either the electrical grid, or generated by onsite from recycled waste heat, geothermal and solar systems.

Ward said site construction is expected to start early next year after site selection with completion in 2025.

“We've got a significant amount of equity committed and will finance the remainder with debt,” Ward said. “We've hit some good timing. This project has dragged on for a few years so this has allowed us to have a greener operation. We are down a million (daily) barrels of refining capacity in the U.S., and in the grand scheme the world is down 2 million barrels in refining capacity.”

Ward said the refinery is not designed to compete with existing heavy crude plants and takes into account the growing interest in non-fossil fuels energy.

“You can’t make a complete transition to renewables,” Ward said. “It’s going to take time, and there has to be a combination of these modes of energy. We’re including everything, and we see value in each and every one of them.”

LINK TO STORY but it is probably behind the paywall.

I'd like to hear Tator Todd's thoughts on this.
.

Good news!

Something does not seem to compute. A new oil refinery under the Biden administration? Don't see it happening.

I do. It is not in Delaware and the locals want the work. You know something the rest of us do not know?

Great news! Maybe this is a start, getting ordinary citizens to be vocal and involved.

quote:

Originally posted by ZSMICHAEL:
I do. It is not in Delaware and the locals want the work. You know something the rest of us do not know?

The environmentalist wackos will find some endangered cockroaches somewhere then file some bullshit lawsuit to stop it.

If we had built the refineries Bill clinton said we shouldn't because they would take ten years, 28 years ago, we'd be in far better shape today. I'm dismayed worthless politicians have the power they do.

quote:

Originally posted by lastmanstanding:
Something does not seem to compute. A new oil refinery under the Biden administration? Don't see it happening.

I'm gonna guess all the permitting and sign-off's happened well before Biden came into office.

Which brings up, if you're looking to build/modernize a refinery, how much approval is needed from the federal-level and how much at the state-level?

Sounds promising, waiting on Todd's take on it, since he's become the resident O&G pro/knowledge source.

More refineries are a positive. Shortages of new refineries has nothing to do with the gas price hike.

As a Victoria County resident, this is the first I've heard of it. I'll do some digging tomorrow, but we're not lacking in huge plants and stuff, so we're used to it! I like the idea of more jobs though, it'll get some of these kids off my lawn.

quote:

Originally posted by 12131:
The environmentalist wackos will find some endangered cockroaches somewhere then file some bullshit lawsuit to stop it.

In Cushing or Victoria? That may be a long shot. If the refinery goes to Victoria and the envirowhackos try to block it there, then that'll accelerate the process of turning South Texas red - and that process already seems to have been set in motion by Trump.

I'd love to be a fly on the wall when the state reps start trying to convince the company to pick Oklahoma over Texas or vice versa. There's gonna be some interesting salesmanship and bargaining going on.

Fake news, or true, but soon to be destroyed by the libturds.

The autistic superheroine “Greta” will soon be paddling in from Europe, to save Texas and Oklahoma.

quote:

Originally posted by OKCGene:
We have not had a new oil refinery built in the USA in something like 40 years.

Wrong. Tens of $ billions were spent in new refining capacity over the last decade along the gulf coast, taking advantage of fracking and the difference in shale petrochems vs naphtha feedstocks.

Not sure if people caught my US refining capacity comments in last week's US domestic crude oil production thread. The pertinent parts to this thread are:

Industry news and local Houston news is full of stories about Gulf Coast refineries are building / have built more capacity to refine West Texas and New Mexico crude oil. Pipelines have been built to get West Texas and New Mexico crude oil to the refineries.

When looking at refining capacity on EIA's site for 1982 to present, I see 2.2M BOED increase despite the dozens and dozens of refinery closures. In other words, significant expansion within existing fenceline. The problem with no new refineries and 0 refineries between florida and Deleware is local shortages from natural and manmade disasters.



Pros for both:

Proposing to build a new refinery is a big, hairy audacious goal so I love it!

Cons for both:

Neither addresses the elephant in the room of the viscous cycle of 2 steps forward and 1.95 steps backward regulatory environment. Spend billions to increase capacity, new regulations reduce capacity, spend billions to meet regulations and maximize efficiency, new regulations reduce capacity, rinse and repeat. To be fair, it doesn't have to address it, but they'll certainly be factoring in final investment decision (FID).

Neither addresses the issue in red font above which affects a larger portion of US population than pros for either location. It doesn't have to address it, but it's worth pointing out.

Cushing Pros:

Crude oil pipeline hub and crude oil storage hub so extraordinary crude oil logistics

More refined product pipelines than Victoria, but that's not saying much as Victoria has zero.

Reduces PADD 2's refinery capacity shortage (i.e. PADD 2 consumes more then they refine so import from PADD 3). In other words, will reduce but not eliminate being subject to local shortages from natural (e.g. shutdown refineries for hurricane) and manmade disasters in Gulf coast.

Cushing Cons:

The last publicly available report on refined product pipeline capacity through Cushing is 2017 so will not comment on whether or not new pipelines needed (i.e. another long permitting process full of lawsuits).

Texas is superior to Oklahoma in both oil & gas and football

Victoria Pros:

Close to the Gulf so ability to load refined product on barges/tankers and ship to PADD 1 (aka the most populated PADD).

Awesome business climate. Nearby in Gregory, TX, a new very large ethylene cracker plant began operation in early 2022 and it only took 2.5 years to construct so a refinery seems plausible.

Closer than Houston to the oil fields in West Texas and New Mexico (i.e. cheaper logistics).

Victoria Cons:

Zero refined product pipelines. Building a new pipeline(s) or converting an existing pipeline is a long permitting process subject to a much larger geographic area than a refinery so lots of "stakeholders", terrain for sensitive habitat, and court districts.

If their FID is dependent on barrels shipped via tanker/barge then they're subject to weather disruptions between them and customers (i.e. western Florida and eastern seaboard).

---

Ego is the anesthesia that deadens the pain of stupidity

DISCLAIMER: These are the author's own personal views and do not represent the views of the author's employer.

Thanks TatorTodd for your insight.

On a related note, LA Times ran an article stating that Democratic-controlled California hasn't address chronic refinery shortages for the past 25 years and CA will continue to experience price volatility for years to come while they transition to non-fossil fuel transportation.

Sorry, I don't have a link because I don't have a subscription, but it ran on Monday, October 10th. I cut and pasted from the LA Times app.

California repeatedly warned about spiking gas prices, fragile supply. But fixes never came.

California officials have had repeated warnings over the last two decades that the state’s unique blend of gasoline is susceptible to supply shortages and sharp price spikes.
But despite multiple reports and special committees, California has struggled to find solutions as it tries to rapidly reduce its reliance on fossil fuels.
Motorists got a reminder of this in recent weeks as prices hit record levels in an increasingly fragile gasoline market, after almost half the state’s refineries experienced recent or ongoing outages, pushing the supply of West Coast gasoline to its lowest level in a decade.
Yet state leaders remain far from a comprehensive fix.

“We’ve got to make longer-run plans and not just wait until the crisis is upon us,” said Severin Borenstein, the director of UC Berkeley’s Energy Institute at the Haas School of Business, who sat on statewide committees in 1999 and 2015 aimed at finding possible solutions for the state’s volatile fuel market.
None were implemented, he said.
“There are actions we could take to try to smooth that” fluctuation in the gasoline market, Borenstein said, “but it requires some public policy.”

State leaders and energy companies find themselves balancing California’s aggressive green energy goals while providing affordable and reliable energy during this transitional time.
“Do I have the new infrastructure fast enough before I retire the old infrastructure, and what happens if you’re in the middle?” said Amy Myers Jaffe, the managing director of Tufts University Climate Policy Lab and a former executive director for energy and sustainability at UC Davis.
“The way we’re doing it now is you just let the fuel costs go up and then we leave poor people with no ability to get anywhere… . And then [California leaders] grandstand against the oil companies — that’s not a solution.”

Same issues … two decades later
Gov. Gavin Newsom’s decision last week to switch early to the state’s easier and cheaper winter blend of fuel has been credited for minor relief at the pump. But experts say that move alone does little to remedy a situation that keeps reaching crisis levels. The average price for a gallon of gasoline remains well above $6 in California, about 70% higher than the national average, according to the American Automobile Assn.
“The state has set aspirational goals for the energy transition, but it’s not very well planned,” said David Hackett, the chairman of energy group Stillwater Associates. The last few weeks of high gas prices could be “an early warning system” of California’s fate if policymakers or businesses don’t take action, he said.
In 2015, the state’s Petroleum Market Advisory Committee — on which Hackett, Borenstein and Jaffe sat — was focused on three gasoline price spikes and how officials could “lessen California’s exposure to these types of events,” the final report said.
Though the committee’s conclusions weren’t concrete, the report “strongly urge[d] the state to establish an organizational structure and to commit resources” to studying the issues further. Many ideas mirrored recommendations that the California attorney general’s Gas Pricing Task Force made almost two decades prior, such as establishing a gasoline stockpile, increasing transparency from oil refiners and easing some environmental requirements during times of increased market pressure.

Jaffe and other experts this week said a gasoline reserve, operated either by the state or by refineries themselves, could help reduce price spikes by stabilizing inventory. Many European countries, Japan and South Korea require refineries to keep certain inventory levels, something the Biden administration also recently proposed.
Other countries “don’t wait for the trading community to find it profitable to hold inventory, they require refineries to hold a minimum level of inventory,” Jaffe said. “For a decade, I’ve been saying we need to do that in the United States, and I certainly said that it needs to be a requirement for the state of California.”
The attorney general’s report on gas prices published in 2000 said a “state-owned gasoline reserve” was a possible option for “price spike mitigation.” State leaders and experts then listed “the relative lack of competition” among refiners, supply constraints of California’s “unique clean-burning gasoline,” and higher state taxes as three of the main points driving up prices — the primary points analysts continue to cite today.
Andrew Lipow, president of consulting firm Lipow Oil Associates, agreed that a gas reserve such as the U.S. has for crude oil could help, but he said another way to reduce costs would be to relax some of California’s strict regulations on fuel during emergency times, though that comes with environmental trade-offs.
Other ideas, such as building more refineries or a new pipeline to California, stand in sharp contrast with the state’s goals to move away from fossil fuels and related infrastructure.
Lipow said a more environmentally sound option would require a change to a decades-old federal law that allows only “American-made” vessels to ship goods between U.S. ports, which has forced California to rely on foreign imports when gas supplies run low, raising costs.
But Jaffee said the state most urgently needs to find comprehensive solutions to its current reliance on gasoline, such as investing in public transit, new technologies and affordable housing, while using short-term options, such as gasoline subsidies and incentives, to help get there. She supports the state’s ambitious goals to ban the sale of new non-electric vehicles by 2035, and a proposal to do the same to diesel big rigs by 2040, but wants to see a feasible path there — without ignoring the current need for gasoline power.

“What are we going to do to make this mid-transition?” Jaffe said. “We should create ways to provide mobility — not fuel — for people who need it.”

Blame game
Newsom and state energy officials have again placed blame on oil and gas companies, accusing the corporations of “ripping off” Californians. Though Californians have long paid more at the pump than neighbors — a premium often attributed to the state’s environmental laws, taxes and special blend of gas that’s less harmful to the atmosphere — state leaders say this recent spike showed a concerning gap between expenses and price tags.

“Data show even as crude oil prices decreased and state fees and taxes remained unchanged, the price at the pump still went up because refinery costs and profits more than tripled, now accounting for $2.18 for every gallon of gas that Californians buy,” California Energy Commission Chair David Hochschild said in a statement Wednesday. He requested information about the “sudden gap between national and California prices” from in-state oil refiners, which produce the vast majority of gas sold in California.
He also pointed to two cases in the last decade when refineries had unplanned maintenance issues: In September 2019, when five refineries had outages and prices spiked about 34 cents per gallon, and the 2015 explosion at a Torrance refinery that caused a 46-cent increase.
“Refinery maintenance alone — especially prescheduled maintenance — cannot explain a sudden $1.54 increase in what refineries charge for every gallon of gas Californians buy,” Hochschild said.

However, Ed Hirs, an energy fellow for the University of Houston, disputed the governor’s claims, saying he’s seen no hard evidence of price gouging during this spike.
“The real issue is you’ve lost several hundred thousand barrels a day of refining capacity,” Hirs said. “And to make up that supply, people are having to shift supplies from other parts of the nation, and that just costs money.”
Newsom on Friday called for a special legislative session in December for lawmakers to consider passing a new tax on excessive profits oil companies are making from soaring gas prices, saying the idea that the surge could be caused by maintenance is “nonsense.”
Executives for Valero, which runs two of the state’s 11 gasoline refineries, warned in a letter Friday that additional costs, such as a new tax, “will only further strain the fuel market and adversely impact refiners and ultimately those costs will pass to California consumers.”
Responding to the Energy Commission, Valero and PBF Western Energy, which also runs two gas refineries in California, denied any sort of price gouging or market manipulation, instead placing most of the blame on the state’s many regulations and policies that have made such a tight market.

Though oil companies have taken advantage of such a situation in the past, Hirs said, confirming that requires “some serious research.” A federal judge in San Diego recently dismissed a lawsuit that alleged some of the world’s largest oil companies colluded to keep supplies low in California, driving profits up.
Jaffe said it’s too early to know whether there’s been market manipulation, but with a limited number of refiners in California — many owned by the same company — there are “multiple ways refiners could game the system.” She called for adequate regulation but said ideally more oil conglomerates would respond to market changes and transition to making greener energy while maintaining capacity to provide the gasoline people rely on.

“Car companies all across the United States now are changing over their manufacturing platforms,” Jaffe said. “Why can’t [oil companies] invest in new infrastructure, while at the same time providing their [gasoline] services?”

I hope it doesn't take them 30 years to build the thing...

It will get killed before liftoff or die by a thousand cuts. We'll need a mass die-off of mass stupidity before common sense may prevail again.

^^^ Yes, but greed has been known to do wonders.