US energy secretary says nation needs more refining infrastructure

Speaking from the last refinery built in the country, US Energy Sec. Spencer Abraham Tuesday called for more infrastructure as he promoted President George W. Bush's national energy plan during a tour of the 25-year-old Marathon Ashland Petroleum LLC refinery in Garyville, La. Abraham said about 50 US refineries have closed in 10 years, leaving little surplus capacity nationwide in case any refinery experiences problems.


By the OGJ Online Staff

WASHINGTON, DC, June 5 -- Speaking from the last refinery built in the country, US Energy Sec. Spencer Abraham Tuesday called for more refining infrastructure as he promoted President George W. Bush's national energy plan during a tour of the 25-year-old Marathon Ashland Petroleum LLC refinery in Garyville, La.

"The energy crisis in this country is not caused by lack of product," Abraham said. "In the past, excess capacity and a poor investment climate may have deterred growth in this industry. But today other factors, including an outdated regulatory environment, have discouraged capital from flowing into the refinery business."

Abraham said about 50 US refineries have closed in 10 years, leaving little surplus capacity nationwide in case any refinery experiences problems. For example, the 232,000-b/d capacity Marathon refinery is operating at near capacity.

Another constraint on gasoline supply is the multiple, region-specific fuels required by the Environmental Protection Agency. These rules require delivery of the right fuel to the right place in a timely manner.

"The issue is not supply," Abraham said. "We've got the crude oil, but we don't have the infrastructure to move it where it's needed at the right time."

President Bush has proposed the EPA explore ways to move away from fractionalized gasoline markets that can contribute to market shortages and supply disruptions. The policy also proposed streamlined permitting for new plants and the upgrading of existing refineries.

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