This news may make conservationists gag, but the reality is that the United States is expected to increase its consumption of gasoline and jet fuel anywhere from 200,000 to 400,000 barrels of oil a day annually for the next several years.
At least that's the estimate of PFC Energy, a Washington, D.C., consulting firm. At the same time, the refining industry in the United States is expected to increase its capacity to produce that fuel by only about 100,000 to 300,000 barrels.
In other words, as domestic refinery production is unable to keep up with usage, the United States will grow ever more dependent on foreign sources of refined oil.
It's time for the United States to wake up to the reality that the high cost of fuel is affected, sometimes dramatically, by limited refinery capacity, just as it is by the world price of oil. Indeed, domestic refineries are under so much stress that gasoline prices skyrocketed to more than $3 per gallon after Hurricanes Katrina and Rita knocked several of them off line and produced a shortage that cost consumers dearly.
Energy consumption has climbed dramatically over the past 30 years, despite huge advances in energy conservation efforts. That's simply reflective of a strong and vibrant economy.
But despite the growth in demand, there has not been a single oil refinery built in the U.S. since 1976 – an unofficial moratorium attributed to heavy regulatory burdens, historically low profit margins and a not-in-my-backyard attitude in communities identified as potential sites for construction.
Foreign refiners operate under no such burdens, and they are working furiously to keep up with demand in the U.S. Meanwhile, domestic refiners are limited to upgrade the production at existing refineries. Needless to say, no upgrade in production will meet the output of new foreign oil refineries.
This sad situation reflects a grim reality. All the talk among politicians about promoting energy independence is just hot air unless the U.S. gets serious in pursuit of goals that not only conserve energy but also produce and refine more oil.