Posted: 06/18/2004
Refineries Proposal Step Forward Towards Lower Gas Prices
ANWR Defeat a Simultaneous Step Backwards, Says NCPA Expert
JUNE 18, 2004 – House Republicans pushed through legislation Wednesday to speed construction of new refineries to ease tight gasoline supplies. According to National Center for Policy Analysis (NCPA) Senior Fellow H. Sterling Burnett, “this provision is a good first step to reducing fuel prices at the pump.”
Burnett pointed out that environmental regulations have hampered the construction of new oil refineries to the extent that no new refineries have been built in the U.S. since 1976. During that time, industry consolidation and environmental restrictions have resulted in the closure of many refineries. This has resulted in a bottle neck at domestic refineries such that the U.S. now refines seven percent of its oil products overseas – contributing to the trade imbalance, lost revenue and lost jobs.
“Another benefit of the proposal,” added Burnett, “is that it focuses new construction of refineries in economically depressed areas or in locations where refinery jobs have been lost in recent years – improving the employment prospects for the least well off.”
Burnett suggests this proposal should foster a resurgence in the moribund U.S. refinery industry, by streamlining the permitting process and setting strict limits on the time allowed by relevant agencies to issue or deny permits or challenge permits issued by other agencies, while at the same time maintaining critical environmental standards.
Burnett also cautioned however, that despite the favorable prospects this bill provides for increased employment, decreased reliance on foreign refining capacity, and reduced prices paid by consumers at the pump, it is still only one small piece for the larger energy puzzle. Other necessary pieces include opening the Arctic National Wildlife Refuge and coastal areas with the greatest prospects for new oil large oil finds to exploration and production. Unfortunately, a bill that would open ANWR went down to defeat the very day the refinery bill was approved.
“As is too often true on Capitol Hill, it’s a case of one step forward, two steps back,” said Burnett.