Quote:
Originally Posted by Slava
"Refining capacity here really hasn't been boosted in the past 20 years... thats part of why the price of fuel doesn't mimic the price of crude oil."
And why would you increase the capacity? Even though the demand has obviously outgrown the production there is no onus on the oil industry to increase capacity; you just raise prices.
|
If building a new refinery were that profitable then it would be built. Only now after a few years of margins being above $10/bbl does the economics work. The problem with this industry is the extreme capital intensity needed to build one and the long amounts of time (5-7 years to build in Alberta). It's easier to just buy one on ala Husky buying Valero's Lima OH refinery. That being said there are new refineries and refinery expansion projects being contructed right now as we speak to be online by 2010. Shell is building a new refinery in Ontario, Edmonton refineries are being retrofitted, etc.