No New Refineries

Frank O’Donnell

June 06, 2006

Frank O’Donnell is president of  Clean Air Watch , a 501(c)3 nonpartisan, nonprofit organization aimed at educating the public about clean air and the need for an effective Clean Air Act.

Sterling Burnett, a senior fellow at the National Center for Policy Analysis (and Exxon defender) recently compared Al Gore to Joseph Goebbels for his new film “An Inconvenient Truth.” If there is a Goebbels reference to be made it should start with the “Big Lie ” and it is not to Al Gore that it applies. Goebbels is credited with inventing the idea that if you repeat a lie often enough it eventually will be believed. Naturally, conservatives think that if they keep using Gore and “Nazi-environmentalist” in the same sentence pretty soon the rest of us will, too.

And, painful as it is to draw the analogy, it’s deplorable to see a similar tactic being used today by congressional Republicans, who seem desperate to find a scapegoat for high gasoline prices.  In this case, the Big Lie involves politicians and others scapegoating environmental requirements for blocking the construction of new oil refineries.

With the House planning to vote this week on yet another bogus bill  which ostensibly is designed to promote more refining, it might be worth examining both the rhetoric and the reality.

Here’s the Big Lie, as uttered May 3 on the House floor by Rep. Joe Barton, R-Texas, chairman of the House Energy and Commerce Committee and a principal sponsor of new refinery legislation:

The last American refinery to be built from scratch in this country was over 30 years ago….  It takes as long as 10 years just to get the permit to build or expand [an] existing refinery.

And here’s what President George W. Bush said, in a speech on April 25: “There has not been a new refinery built in America in 30 years.”

Again on May 16, Bush said: “There has not been a single new refinery built in America since 1976.”

This mindless mantra is generally accompanied by calls to “streamline” or “simplify” environmental permit requirements—the implication being that if only we could shut up those mouthy environmentalists, we’d have lots more refineries and be enjoying 99-cents-per-gallon gasoline.

That rhetoric is the wind in the sails of the House Republican bill. This bill would have the president designate at least three closed military bases as sites for new refineries, and call for creation of a federal refinery czar—technically called a “federal coordinator”—to speed along permit applications.

It’s tempting to not to let the facts get in the way of a good story, but even the oil industry itself admits this issue is a red herring. For example, the National Petrochemical and Refiners Association conceded at a May 23 Senate hearing on price gouging that gasoline supplies were temporarily tight.  But the oil industry lobby went on to note that:

This situation will ultimately be addressed through announced additions to U.S. refinery capacity, estimated at 1.4 to 2.0 million barrels per day. This is an 8-11percent increase in U.S. capacity, which should be in place by 2010 at the latest…. over the past 10 years, domestic refining has increased by an average of 177,000 barrels per day of production each year or the equivalent of building one new, larger than average refinery each year. This fact should assuage some concerns about the fact that no new grassroots refinery has been built in the U.S. in over 30 years.

Indeed, at a Senate hearing last year, BP’s chief executive officer explained that “[refinery] margins over the last 10 to 15 years have not been high enough on average to justify building a new refinery.” And in a recent closed-door briefing with congressional aides, an Exxon Mobil official said that company foresees no need to build new refineries at least through the year 2030.

If that weren’t fast enough, last year’s Energy Policy Act included provisions to coordinate state and federal permitting for new refineries. Energy Secretary Samuel Bodman hailed the refinery provisions as “easing the constraints on new refinery construction.”

So much for the baloney about “no new refineries.” But what about the related argument about alleged barriers and permit delays for expansions of existing refineries? First, note that all the expansions mentioned above have taken place and are expected to continue without any change in current rules. Backing up that experience, CEOs for BP, Shell and Conoco all testified to Congress last year that environmental requirements have not blocked a single planned refinery expansion. And, contrary to Joe Barton’s wild assertion, then-EPA administrator Carol Browner testified to Congress in 2000 that about half the permit modifications for refineries were issued within five months and that most of the others were issued within a year. That conclusion was bolstered by a new survey by state air pollution regulators, which concluded that environmental requirements have not delayed refinery expansion plans.

Despite all evidence to the contrary, Republicans such as Barton and chief bill sponsor Rep. Charles Bass, R-N.H., continue to assert that environmental permits are limiting refineries—and causing higher gas prices.
It’s one thing for a noted industry shill like Barton—christened “Smokey Joe” by the Dallas Morning News for his consistent pro-polluter positions—to mindlessly bash environmental requirements. It is more disturbing to see that this legislation is supported by more moderate Republicans like Bass or retiring Rep. Sherwood Boehlert, R-N.Y.

Unfortunately, as long as these lawmakers continue to repeat the Big Lie about refineries, we are not likely to see real reforms that could better address the root problem—our reliance on foreign oil.