Texa$$ Tea Reality Check

…Very few new refineries are being built in the Western oil-consuming countries. In the United States, in fact, while oil refiners have added capacity at existing plants, no new refineries have been built for more than 20 years. We have used imports of refined petroleum products from the Caribbean and Latin America to meet growth in domestic demand for gasoline, heating oil and other refined products.
…But the oil-producing countries of the Middle East are about to go on a refinery-building boom that, according to energy consultants Wood Mackenzie, will boost refining capacity in the region by 60% over the next 10 years. OPEC (Organization of Petroleum Exporting Countries) members alone would increase their refining capacity by 50%.
That’s great news for the companies that engineer, supply and build refineries throughout the world: The International Energy Agency puts refinery spending in the Middle East at $89 billion between 2004 and 2030.
But it’s not good news for oil-consuming countries striving for energy independence. If Part Two of the oil-producing countries’ energy strategy works, the countries of the Middle East — which really means Saudi Arabia, since that country has the cash flow to build the most refineries — will dominate the supply of refined-petroleum products at the margin, just as they do with oil. And that will give the oil producers control over the global price of gasoline, heating oil, jet fuel, feed stock for plastics, etc.

Today’s “Jubak’s Journal”. Read the whole thing.

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