Why can't big oil companys build more refineries with all thier profits?
Answers:
I work for a Oil company, and let me tell you - it's NOT that easy.
One of the biggest challenges of any oil company is not the production, but finding that next oil reserve. They spend BILLIONS (not millions) in exploration costs. If any oil company could find an unlimited oil reserve - I guarantee that there isn't a company in the world that would dump every asset they owened to get their hands on that well.
But why pump your financial resources into a potential "dry well". (If it costs 1.5 Billion to drill the well, but you only make $750 million, that isnt a very good return on your investment)
Thats Why.
Why should they?
Seriously, as a business person, I don't see that I would do anything different than they are. The environmental restrictions on refineries are insane. No one wants a refinery, until gas prices go up, then everyone screams that we haven't been keeping pace on refinery construction!
I used to work in the electric utility industry. The permitting and environmental assessment required to put in a simple transmission line was completely insane. Is it any wonder that our nation's power grid is so fragile?
All these environmental laws have an impact. Its all good sport for politicians to beat up on mean old capitalists, but at the end of the day, who else is going to put gas in your tank or electricity into your refrigerator?
Enviromental groups don't take kindly to more drilling,much less more refineries.
Short Answer, what community wants to allow a new refinnery. I believe private investors are building one near Yuma AZ but it will take a few years.
Because it costs billions, takes years to build them and more importantly it would take decades to recover the costs and eventually make some profits.
You don't have to pay more for fuel.
Nobody is pointing a gun to your head and forcing you to buy gasoline.
You can buy a used Honda Insight or Toyota Prius.
You can also buy a used Volkswagen Jetta with a diesel engine and stop at your local McDonald's everyday and they will give you away all their used oil and you can fill your tank with it.
Because it would cut into their hundreds of billions of dollars, and of course we can't have that.
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