You’ve heard the complaints a hundred times from oil and gas drilling advocates...
“The United States hasn’t built a refinery since 1976.”
But it really is true.
Thanks to government red tape and environmentalist pressure, a new oil refinery hasn’t been built in the United States in over 25 years.
Even though we’re still in the grips of a nasty national recession — with spiking oil prices exacerbating the problem — the government continues to stand in the way of domestic development of energy resources such as oil and natural gas.
However, Reuters reported yesterday the first refinery in over three decades may be built in, ahem, North Dakota.
You see, the oil drilling boom in the Bakken is so big, production has tripled in just three years — to more than 464,000 barrels per day.
And that figure is set to go a lot higher in the years to come.
As a result, demand for diesel in the Bakken region has gone off the charts...
Hundreds of diesel-fueled trucks are needed to accommodate the growth in the largely remote state of North Dakota to haul crude to the nearest pipeline or rail head, to haul refined products to the drilling site, or to truck in sand and water, key ingredients to hydraulic fracturing.
As a result of its remote location, North Dakota has experienced periods of severe diesel shortages.
According to the Reuters report:
Local diesel terminals were sucked dry this month — some for hours, others for days — as a major Indiana refinery underwent planned maintenance while fuel demand rose due to seasonal demand from farmers and shippers at the tail end of the autumn harvest and the Bakken shale oil plays. Some truckers had to drive hundreds of miles to fill up.
"Trucks arrive at the loading station and some wait three to four hours and others in excess of eight hours," said Bud Kerr, operations manager at J5, a hauling company in North Dakota. "The problem appears to be worse than what it was last year."
What’s the solution?
Simple: Build a diesel refinery in the Bakken itself.
I love it. I love North Dakota.
The refinery received county zoning approval last week and now awaits final state approval.
Knowing North Dakota’s views and the history of its booming oil market, I’m inclined to believe this refinery will receive overwhelming support. They know it means more jobs and more tax revenue to the state’s coffers.
If only the White House was following this positive story...
SSN Price at posting:
9.2¢ Sentiment: LT Buy Disclosure: Held
