Friday, January 05, 2007

Upgrading Our Refineries.

If you rely on the watered-down, pre-packaged-for-mass-consumption mainstream media for your news, you'd be led to believe that high gas prices in California are the result of the prevailing supply (and price) of oil. Actually, California's unique gasoline formulations and its woefully inadequate refining capacity head the list of reasons why gas is so expensive.

Practically speaking, we can't do anything about the special blends Califoria uses in its gasoline, and we certainly can't site and build new oil refineries (take the opposition to an offshore LNG facility in Malibu and multiply by a thousand if you try and build a new oil refinery), but we can improve the aging refinery infrastructure we've got.

According to the San Francisco Chronicle, some companies are doing just that. Among the list of refinery upgrades:

Chevron Corp. is planning improvements to its Richmond facility that could expand the plant's gasoline production by about 7 percent, Chief Executive Officer David O'Reilly said in testimony before Congress. The company is still seeking government permits for the work and hasn't disclosed the price tag.

San Ramon's Chevron is also upgrading its refinery in El Segundo, in Los Angeles County. That project and the planned improvements in Richmond will increase the company's gasoline production in California by 840,000 gallons per day, a spokeswoman said.

ConocoPhillips' Rodeo refinery wants to expand production of gasoline by 791,000 gallons per day, a 35 percent increase, and its production of diesel by 290,000 gallons per day, up 21.5 percent. The company, which like Chevron isn't revealing the project's price, has applied for permits and hopes to have them by March.

Tesoro Corp.'s Golden Eagle refinery, near Martinez, will spend an estimated $475 million to $525 million installing equipment that will reduce air pollution and improve the plant's ability to process relatively cheap, heavy grades of crude oil. This project, which has just started construction, won't increase the amount of gasoline produced.

Valero Energy Corp.'s Benicia refinery also is upgrading equipment to handle heavier forms of crude. The project, under way since 2004, will cost an estimated $200 million to $400 million.

According to the Chronicle: "Viewed together, the Bay Area refinery projects could produce an extra 1.1 million gallons of gas per day, or about 2.5 percent of the 43.5 million gallons Californians burn every day."

Baby steps, to be sure, but every little bit helps.

Oil facilities are getting refined ConocoPhillips, Chevron hoping to boost production [San Francisco Chronicle]