View Full Version : why are there no refineries near cushing

08-24-2012, 05:57 AM
We have a glut of oil in Cushing that companies are spending billions on pipelines to alleviate. Wouldn't it be in the best interest for oil companies and consumers in Oklahoma if oil was refined near cushing. We would probably clect lots more in fuel taxes to to reduced cost of refined product(deisel) and with our proximity to 35 and 40 would make our state a prime candadate for shipping companies to relocate to as the cost of fuel is their largest expense.

Just food for thought we run our nation's refining capacity at around 90% or better anyways

Maybe Devon or continental should get into the refining game to help boost profits from their oil plays. We would probably score more international flights as well.

08-24-2012, 07:05 AM
If you put in more refineries (which are EXTREMELY expensive to build), you would lower the price of gas by putting more into the market. Find me an energy company that wants to do that.

Also, I believe the refineries are generally closer to higher population areas. That's probably for a mix of resources and employee base. Not to mention the benefit if you have water nearby. Tulsa isn't that far, and you've got water-ish at least for some barge transport over to the Mississippi...which is cheaper than trucking. Same goes for rail lines. If they already exist somewhere, you've got it in the bag. If you have to build the lines, you add to the cost.

So yes you would be closer to the pipe of the stuff, but not necessarily in a way that makes it more cost effective to produce gasoline from the raw crude.

08-24-2012, 07:23 AM
Operating refineries is not where the best profits are made in the oil business and due to the time it takes to build one, historic boom/bust cycles in oil and political pain in building one they are avoided as much as is practical

Bill Robertson
08-24-2012, 07:26 AM
As bombermwc said refineries are EXTREMELY expensive to build. The EPA makes it nearly impossible to build a new, significant, refinery. There have been a few small, simple refineries built in the last 35 years. The last good sized refinery was built in 1976.

Also, Kerr-McGee had a refinery in Cushing until the late 70s. It was closed supposedly due to economic factors. The fact that K-M also processed Thorium and Uranium there and the EPA forced a major clean-up of the property didn't help any. We all know how complicated things get when the EPA gets involved. If there was ever a refinery proposed in Cushing I'm sure the K-M fiasco would be an obstacle.

08-25-2012, 10:15 PM
Refining here is better than selling the oil off cheap sure it would depress prices a bit but you would not have the expensive overseas crude being blended into it thus increasing profit margin outside building a pipeline the best way to get the most for our oil would be to refine it here and sell it at retail prices I am sure central.Oklahoma could support a refineries output

08-25-2012, 10:31 PM
So, given those facts, should the state build one?

No, it would cost 6 times what a private company could build it for and the government has no business doing that. Is that really what you want your tax money going to?

08-26-2012, 04:56 AM
Where in state do we currently have functional refineries?

08-26-2012, 06:17 AM
Where in state do we currently have functional refineries?


08-26-2012, 09:41 AM
Thank you sir. Dinna cross my mind to look at wiki. Wasn't aware of the Ventura one at Thomas, and had thought Ponca City was no longer in operation. Nuther day dawned, nuther lesson learned.

Larry OKC
08-27-2012, 11:23 AM
IIRC, we had at least a couple of refineries here in OKC. Two of them were responsible for EPS Superfund sites in the DT/Bricktown area.