Chevron Targets Refining Capacity

An interesting piece of news overshadowed by Chevron's announcement yesterday that it was pulling out of the LNG game in Baja, was the company's commitment to expanding refinery capacity in California.

Specifically, Cheveron wants to increase output at refineries in Redding and El Segundo. With gas prices north of $3 a gallon, this is a great idea.

California's high gas prices are largely the result of insufficient refining capacity, not crude oil prices or ethanol supply, or what have you. The fact is, California can't make enough gas fast enough, and it is legally required to switch gasoline recipes during summer and winter months. This necessitates annual fundamental changes to the refining process that require refineries to be taken off line temporarily.

Any attempt to expand exisitng refineries will no doubt cause an uproar in the environmental community that, hopefully, will elevate this issue to highest levels of public policy debate.

We spend a lot of time talking about the (mandated) need to produce more renewable energy and the need to rely on cleaner burning energy sources (the recent ban on coal fired power, seeking approval for LNG imports) but right here, right now, we need increased refining capacity.

Ditching the California's unique gasoline recipes is both a political impossibility and probably a bad idea anyway, so we need to come up with a solution to the supply problem they present. That either means a realistic, practical plan to get everyone to ditch their SUV's, take the bus, or drive hybrids (I haven't seen such a plan nor do I belive one exists), or it means increasing supply.


Chevron reviews possible expansions at refineries [LA Times]