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Valero Shuts Another Oil Refinery

Discussion in 'Off Topic Threads' started by Unknown1, Nov 20, 2009.

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  1. Unknown1

    Unknown1 Well-Known Member

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    Does this make any sense to anybody? The price of gas goes up; they explain that we don't have enough refinery capacity to keep up with demand; then they pull a stunt like this:

    <I>Valero Permanently Closes Delaware City Refinery</I>
     
  2. wm rike

    wm rike Member

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    Historically, the refining portion of the oil industry has been one of very thin profit margins. I don't know why, but that's the lay of the land. Profits are low enough that in fact a lot of the domestic refining capacity has been sold to overseas interests. Couple that with the fact that we (the US)haven't had a new refinery built in over 35 years, and the environmentalists probably won't let us build new, and what we are stuck with is old facilities that need massive amounts of updating, especially in light of ever tighter environmental regs. In particular, the proposed cap and trade legislation that your President is pushing will increase refining costs, reduce doemstic refining capacity by about 10%, and increase our reliance on imported refined product. All in all, the refinery business is not a good place to be and Valero may have just seen the handwriting on the wall.
     
  3. 221

    221 Banned User Banned TS Supporters

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    Are there that many left to close?
     
  4. crusha

    crusha TS Member

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    There ain't that much profit in refining a barrel of crude. One of my chemical engineering profs. estimated the margin to be in the low single digits back in the 90's, based on feedstock prices, how many gallons of C8 you can get from 55 gals. of crude, and what you can sell the refined product for at the pump.


    Basically, the refiners/retailers are sandwiched in between what the greedy A-rabs charge per barrel, and what the average lottery-playing schmuck can afford to pay at the pump. There ain't a lot of scratch room between the two...which is why they push twinkies, cokes, and cigarettes so hard (joe sixpack can apparently afford the outrageous markups on those).


    Figure in all the commie environmental bullshit...I'm not surprised it's a losing deal.
     
  5. OldRemFan

    OldRemFan Member

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    More and more products we use are being manufactured outside the USA mainly because of production costs and regulations. The same can be said for refining the crude oil elsewhere and importing the finished product.
     
  6. slic lee

    slic lee Active Member

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    Closing refineries creates a gasoline shortage which in turn make prices higher. Govt loves this as higher prices means higher taxes the user pays.
     
  7. Catpower

    Catpower Molon Labe TS Supporters

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    Hey buzz, there's 42 gallons in a barrel of oil, but you're pretty much right about the rest
     
  8. j2jake

    j2jake Well-Known Member

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    slic lee I was under the impression the Goverment taxed fuel by the gallon, not the retail price per gallon. So your statement does not ring true. Jake
     
  9. B V

    B V TS Member

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    Local sales taxes are based on the price per gallon
     
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