Increase Domestic Refining Capacity

The United States currently imports, on average, about 3.4 million barrels of refined petroleum products each day.  We also export about 1.4 million barrels of refined products each day, indicating a shortfall of about 2 million barrels per day of refining capacity.  However, we do not want to reduce exports so our goal should be to add at least 3.4 million barrels per day of refining capacity.

Refineries are generally tailored to optimize production based on the particular characteristics of the oil to be processed.  The large quantities of shale oil that will be developed will likely require new refineries and pipelines as well as modifications to and expansion of existing refineries in order to process it in the most efficient and environmentally friendly manner.  The refining companies should determine the size, location, and type of refinery.  All that is required is to offer some appropriate incentives and, most importantly, not impede them beyond meeting all of the required environmental and regulatory standards.  Incentives might include loan guarantees, direct loans, or minimum purchase agreements.

Our objectives are to obtain at least an additional 3.4 million barrels per day of refining capacity in 7 - 10 years and to minimize the environmental impact of refining.  In order to achieve this, the following actions are required:

Encourage building new refineries
Modern refineries are significantly more environmentally friendly than their predecessors, due to the much stricter environmental standards they must meet and improvements in technology.  Ideally, refineries should be located either as near their source of oil as possible or near a major oil pipeline to minimize transportation costs.  We should strongly encourage building new refineries near the oil shale deposits and other new sources that will be coming on-line by offering incentives and attractive leases on closed military bases or other federal lands nearby.  Those incentives should be increased for flexible refineries that can be quickly reconfigured for  processing various types of oil, syngas, or biogas as input and producing varying quantities of different output products depending on near-term demand.

Encourage modernization and expansion of existing refineries
The expansion and modernization of any operating refineries, where appropriate, would add to the new capacity that is needed, address concerns about the environmental safety of older refineries, and reduce the existing environmental footprint of refining.  Owners of refineries that were previously closed due to excess capacity, mergers, or some other reason should be offered incentives to modernize and reopen their facilities, where appropriate, so that they meet current environmental standards and add to our national refining capacity.

Expedite permitting
Set strict deadlines for approval/denial from each agency or level of approval required.  Failure to meet the deadline should be treated as automatic approval.  Work closely with applicants throughout the permitting process to minimize the chances for a denial.  Issue combined construction and operating licenses.

Restrict challenges
Once permits have been issued, court system challenges by opponents must be limited in scope to legitimate issues, have timely filing requirements, and receive expedited access to the court system.

Build or expand pipelines as required
New pipeline capacity will be required to get all of the new domestic oil, from whatever source, to a refinery and to deliver the finished products efficiently.  Expedite permitting, restrict challenges, offer incentives, and provide easements on federal land, where appropriate, to ensure the new pipeline capacity is available when and where it is needed.