Oil Companies’ Record Profits Going to Execs

[Bruce Nunnally]

I'm not a market expert, nor do I play one on the internet, but it seems to me that if OPEC chose to they could simply charge $80/barrel of oil and freeze the price at that point? Wouldn't that eliminate speculation? Outside of actually taking pricing action, all the hand-wringing and false sympathy from the oil producers is just cloying to me.

On the bright side, the high price of oil is making exploration for new sources again more cost effective, is driving down demand in the US, and is causing an explosion in the search for alternate technologies to replace our dependence on oil. Back in the day, the first 4 wells drilled in the Arabian peninsula were all dry holes; thank goodness exploration continued and the fifth one turned up the huge reserves there (I guess).

There is still a tremendous amount of oil in the world. We are not running out of oil in the short term, the markets are being highly controlled. It is reasonable to follow the money to see who is controlling the market.

In response, I can't wait to drive a plug-in hybrid or hydrogen powered car, and not be dependent on imports. I use an electric mower, and electric trimmers, etc now which avoids needing to carry small gas containers in my nice Cadillac. Give me a plug-in Cadillac that charges overnight and for many of my daily commutes I won't need any gas at all.

[BodybyFisher]

Marika, lets agree to disagee.

I recently broke up with someone because of her politcal leanings, she was attractive, sexy, intelligent, inquisitive and then she exposed her political leanings and sounded like a bimbo; blaming bush for katrina, 9/11, gas prices and the difficulty she was having selling her home. After I picked up my jaw off the table, the relationship lasted about 5 minutes after that when I said, THAT is a deal killer.

She loved the New York Times, CNN, MSNBC, thought Keith Oberman was cute, believed in GW and ALGORE, wanted national health care, Michael Moore movies, and conspiracy theories... sound familiar?, " alrighty then... I am old enough to know that is a serious problem long term, we have not talked since..

[Marika]

I'm not sure if we're running out of oil. My cousin doesn't think so BUT he does say it's getting harder and more expensive to extract what's there. My cousin spends an enormous amount of time in the Middle East and in African nations training engineers and helping governments solve problems. Ethanol from corn is a losing proposition actually. It costs more money to grow, harvest and convert the corn then what the fuel ends up selling for, however, ethanol from SUGAR is a win-win situation which produces a better grade of ethanol than what comes from corn. Sugar more easily converts to ethanol and it's much cheaper to grow, harvest and convert. The northeast farmers who raise sugar beets will hopefully be getting into a cooperative with some old sugar factories in Louisiana that were recently purchased by someone who plans to convert the factories so they will be producing ethanol from sugar. Meanwhile, the politicians in Florida just bought up the Everglades from the US Sugar Corp. so there won't be any more sugar made in Florida, a loss of 2,000 jobs but at least the Everglades will be OK for now.

Hydrogen powered cars interest me but I think it might be impractical to try to get hydrogen power really going in this country. The other thing that bothers me, and you can chalk it up to my crazy mind, but in the winter time, I just picture thousands of cars dripping their watery exhausts onto already cold, icy roads. I'm not sure how much water is actually produced by hydrogen cars but I would think there might come a point where our roads would never be dry....LOL!!

Electric cars excite me a lot!! I could picture myself living in a home probably in Queens, New York whose roof is entirely covered in solar cells, producing 100% or more of my power needs simply from the sun. I can also picture myself plugging in my Tesla Motors sports car overnight to charge the battery from all my 100% produced solar power. Once you get the electricity generation down pat, you can pretty much live a stable life with little or no effect on your environment.

[BodybyFisher]

Meanwhile, the politicians in Florida just bought up the Everglades from the US Sugar Corp. so there won't be any more sugar made in Florida, a loss of 2,000 jobs but at least the Everglades will be OK for now.

Can you provide some more information on this? Why was this done by politiians? To save Everglades?, where did they get the funds to buy this land, was this a personal purchase or conservation purchase?, did they encroach on someones land to do this?

[Marika]

Meanwhile, the politicians in Florida just bought up the Everglades from the US Sugar Corp. so there won't be any more sugar made in Florida, a loss of 2,000 jobs but at least the Everglades will be OK for now.

Can you provide some more information on this? Why was this done by politiians? To save Everglades?, where did they get the funds to buy this land, was this a personal purchase or conservation purchase?, did they encroach on someones land to do this?

U.S. Sugar Corp. To Sell 300 Square Miles Of Everglades To Florida In Major Conservation Deal

July 1, 2008 9:51 a.m. EST

Amy Beeman - AHN

Miami, FL (AHN) -- A landmark deal has been made between the state of Florida and U.S. Sugar Corp., which will sell 300 square miles of the Everglades back to the state in one of the biggest conservation deals in U.S. history.

Plus........

http://www.bizjournals.com/southflorida/st...23/daily11.html

http://ap.google.com/article/ALeqM5hwwsvNZ...5xfiYQD91KI7BG0

http://www.heraldtribune.com/article/20080...S/20731867/1661

http://www.allheadlinenews.com/articles/7011461187

[BodybyFisher]

I am curious how you feel about this. Is this a good thing? You said at least the everglades are safe, for now. You said, polititians in Florida, you consider the State of Florida, polititians? You seem torn. Why did the state do this?, what/who influenced them. Why did US Sugar sell a viable business, did they move it, were they forced out, how did sugar production negatively impact the Everglades? Where did Florida's money come from for this? I will read the links you provided thanks.

[Marika]

I am curious how you feel about this. Is this a good thing? You said at least the everglades are safe, for now. You said, polititians in Florida, you consider the State of Florida, polititians? You seem torn. Why did the state do this?, what/who influenced them. Why did US Sugar sell a viable business, did they move it, were they forced out, how did sugar production negatively impact the Everglades? Where did Florida's money come from for this? I will read the links you provided thanks.

No comment.

[BodybyFisher]

So US SUGAR sold UNDEVELOPABLE / UNZONED LAND for $1.7 billion? Why so urgent a purchase, Florida had no better place to put $1.7 billion, let the company go out of business, if it stays vacant, claim it and conserve it..

As it is there is an adjoining company there... Who makes these mega spending decisions?

I like this statement:

U.S. Sugar hopes the land deal with allow remaining Everglades Agricultural Area farmers, which are mostly tied to competitor Florida Crystals, to continue operations.

How magnanimous, what are they trying to say there, it sounds like the businesses are under an onslaught of some sort, doesn't it?

[Marika]

So US SUGAR sold UNDEVELOPABLE / UNZONED LAND for $1.7 billion? Why so urgent a purchase, Florida had no better place to put $1.7 billion, let the company go out of business, if it stays vacant, claim it and conserve it..

As it is there is an adjoining company there... Who makes these mega spending decisions?

I like this statement:

U.S. Sugar hopes the land deal with allow remaining Everglades Agricultural Area farmers, which are mostly tied to competitor Florida Crystals, to continue operations.

How magnanimous, what are they trying to say there, it sounds like the businesses are under an onslaught of some sort, doesn't it?

Louisiana would be helped by this for sure... http://www.theadvertiser.com/apps/pbcs.dll.../806290335/1046

Also, when I find the article about the purchasers of old Louisiana sugar plants who are intent on turning those plants into ethanol plants I'll post that article as well.

[Marika]

I FOUND IT...

Sweet Sugar Ethanol Coming Stateside http://earth2tech.com/2008/06/10/sweet-sug...ming-stateside/

The American ethanol industry, the world’s largest, is about to get a little sweeter. Louisiana Green Fuels (LGF), an international investment group, says it is on schedule to open up the first commercial sucrose-to-ethanol plant in America. LGF, which is 80 percent owned by Inverandino, a Colombian business group, tells Earth2Tech it plans to have four ethanol plants and three sugar mills in operation in Louisiana in the next 10 years pumping out 100 million gallons of sugar-based ethanol a year. (Hat tip Miami Herald, via Green Car Congress)

In the wake of hurricanes Katrina and Rita, LGF has been buying up shuttered sugar mills and dormant equipment in the devastated Gulf region, and now owns three mills in Louisiana. Prices were probably pretty good for those hurricane-ravaged mills and LGF says that a sucrose-based ethanol industry could help revitalize the area.

Louisiana seems to agree, and has done lots to help LGF. The state sold the company one of its mills in September 2007 and just last month issued $133 million in industrial development revenue bonds via the Louisiana Public Facilities Authority, $100 million of which is tax-exempt.

The initial funding for the projects came from the Santacoloma family of Colombia, which controls Inverandino. The company has not disclosed how much it plans to invest in the projects, but it was reported it paid $60 million for the state-owned mill in Lacassine, La.

LGF, which is 20 percent owned by the sugarcane farmers of the Lake Charles Cane Cooperative, says it plans to buy as much sugarcane and sweet sorghum locally but will import high-test molasses, refined sugar and common molasses, likely from the Caribbean, as needed.

This is a good experiment for the American ethanol industry, which has come under heavy fire for using so much corn for fuel. Sugar can give an eightfold return on the fossil energy used to make it while corn only yields 1.3 times the fossil energy used. Count sugar in as a potential major player in U.S. biofuels market. Who thinks America will see a commercial-scale cellulosic or sugar ethanol plant here first?

[BodybyFisher]

US Sugar has this on their web site:

Today, U.S. Sugar Corporation is one of the country's largest privately held agricultural firms. The Company farms nearly 200,000 acres of the most productive farmland in the United States. Its mills at Clewiston and Bryant can process nearly 45,000 tons of sugarcane per day, producing over 700,000 tons of sugar per year. In addition to sugar and citrus, the Company also owns a short-line railroad – the South Central Florida Express.

As stewards of this land, U.S. Sugar has pioneered and encouraged the implementation of special land and water management systems, called Best Management Practices, which help the environment while increasing crop production. For years, the research department has been geared toward integrated pest management as an alternative to pesticides, and intensive soil testing to control the application of fertilizers. We are proud partners in ongoing Everglades restoration efforts.

At U.S. Sugar, the traditional farming values are successfully combined with modern technology so that the result is farming that is compatible with the environment and with the economic realities of the next century.

*********************************************************************

Extracted from article

Even as the governor has announced the district's planned acquisition of the assets of U.S. Sugar, we remain proud of our farming history in South Florida," U.S. Sugar said in a news release. "The majority of our stockholders have held this investment for many decades, and many of our employees' families have worked on our farms and in our sugar factories for generations."

The company said the deal will enable it to fulfill its long-term existing business obligations (this is more than a land sale)

**************************************************************

Yes environmental groups were behind this.

Buker said the company was keenly aware of the struggles four Florida governors made to balance agriculture and Everglades restoration.

"The results of these struggles have been a series of partial fixes, sometimes effective, but invariably expensive. But this governor [Crist] had the vision to look more deeply into the problem and to see a more fundamental, systemic solution," he said.

U.S. Sugar, a 1,700-employee, privately held company, says it produces 10 percent of the nation's sugar.

The $8 billion comprehensive plan, approved in 2000, provides a framework and guide to restore, protect and preserve the water resources in central and southern Florida, including the Everglades. The goal of the plan is to capture fresh water that now flows unused to the ocean and the gulf, and redirect it to areas that need it most.

Environmental groups said the land deal was historic and would result in great progress for restoring clean, natural water levels to the Everglades, which should have a positive impact on wildlife, water supplies and wildfires.

*****************************************************

This is inconsistent with the statement on US Sugar's site that they were CAREFUL with run off, pesticides, etc and that they were dedicated to the environment

Environmentalists have expressed concern that fertilizer runoff from sugar cane fields also affect water quality. Government support for the sugar industry is also controversial because detractors say it results in consumers paying higher prices.

Heck, Government is dropping the ball on OIL DRILLING right now causing high prices because of environmental pressure

[Marika]

http://www.e85fuel.com/news/062708fyi.htm#ttlHead7 you'll find an article about how the oil companies (BP is mentioned) are buying cheap subgrade gas and altering it with ethanol plus other goodies...

Majors Attempting to Shut Out Independents From Growing Ethanol Blending Market in the Southeast

-Source: Tom Waterman, reprinted with permission

New York, NY — The accusations are flying as independent marketers and dealers in the Southeast are concerned that Big Oil is squeezing them out of a potentially lucrative market—the growing E10 blending market. Sources tell us that marketers at least 15 states are rapidly trying to get legislation passed that would provide access to unblended gasoline that they say the majors are seeking to monopolize and keep blending credits for themselves.

Already one law was passed by a state legislature when South Carolina passed S. 1143, with the following amendment related to splash-blending:

Article 3, Chapter 28, Title 12 of the 1976 Code is amended by adding:

“Section 12-28-340. (A) A terminal, as defined in Section 12-28-110(56), located within the State must offer for sale a petroleum product that is not already pre-blended with ethanol and that is suitable for subsequent blending of the product with ethanol.

( B ) A person or entity must not take any action to deny a distributor, as defined in Section 12-28-110(17), or retailer, as defined in Section 12-28-110(52), who is doing business in this State and who has registered with the Internal Revenue Service on Form 637(M) from being the blender of record afforded them by the acceptance by the Internal Revenue Service of Form 637(M).”

S. 1143 contained a tax break holiday for buying energy-efficient products. The House amended the bill to add certain firearms to the annual tax free holiday. But when the bill returned to the Senate, certain members of the upper house decided to by-pass the legislative process and tacked on an amendment relating to “splash blending” of ethanol in gasoline. The governor vetoed the bill stating that sales tax holidays aren’t an effective way to promote energy efficiency. With respect to the splash-blend amendment, the Governor said: “Splash blending entangles federal energy policies with state laws.

Giving local retailers and distributors preferential treatment over out-of-state sources for blended gasolines could be unconstitutional by discriminating against interstate commerce. The addition of the splash blending amendment violates the single-subject rule for laws in our state constitution.”

It’s not clear what the state legislature will do, or if it has the votes to override a veto on this issue. More likely, according to sources we spoke with was a stand-alone amendment, with no other issues onboard, but it remains clear based on the governor’s explanation that he will need to be convinced that the major oil companies are trying to monopolize the ethanol market, and exclude South Carolina marketers and distributors from participating.

What is happening in other parts of the Southeast is that the majors are bringing in waterborne cargoes of “sub-grade” gasoline (CBOB) into Tampa and then around the horn and up the East Coast. This movement, reportedly started by BP in Tampa, Taft, Port Everglades, Jacksonville and Charleston and sets up a move even further north into Virginia. Sub-grade gasoline means it lacks a point or two of octane which the majors then insist requires them to add the ethanol to bring it up to spec.

The contention among many independents in the Southeast is that the majors refuse to sell the CBOB unblended to (a) control the ethanol market, and ( B ) capture all of the blenders credits without any pass-through to the marketer.

One source told us that “refiners market less than 10% of the gasoline sold directly, and while they are certainly entitled to the blending credits on those gallons, the balance of the market is served by marketers who are being deprived of a product which can be competitive with their own suppliers. This is the most high-handed example of restraint of trade and stifling of competition in my memory.”

The independents claim that refiners did not join the parade to produce ethanol because they could sit back, control the industry, keep the subsidies and eliminate it at their own pace and their time of choosing.

Many independents pinned hopes on the South Carolina legislation as a symbol of what should be done throughout the region, but it’s back to the drawing board.

In a memo sent to independent marketers, Executive Director of the National Ethanol Vehicle Coalition Phil Lampert said: “The concern we have is twofold. First, it was the independent sector which provided the initial leadership and entrepreneurial skills to consider entering into the ethanol market. Now that they are not allowed to splash blend, a major oil company is essentially removing their ability to continue selling ethanol altogether. These actions appear to be predatory and ultimately harmful to our early adopters.

“Secondly, as major oil companies were the last to embrace E10, their actions regarding E85 are no more progressive. We have some concern that, unless BP and others also begin to offer E85 at their terminals, there will not be a supply of regular unleaded available with which to blend the ethanol to offer E85.

We will continue to monitor these developments and report to our valued members as additional information becomes available.”

In a letter to jobber back on April 1, Liza Clechenko, BP’s East and Gulf Coast sales VP said “BP is now the largest purchaser of ethanol in the U.S.” She went on to revoke jobbers’ temporary splash-blending waivers that permitted them to blend and sell ethanol fuels at BP sites.

We first reported about the southeast blending markets opening more than a year ago, and noted this was the next frontier for increased discretionary blending outside the Midwest. It has proven to be just that, but we would be remiss if we did not note that most if not all of the expansion of ethanol blending in the region was spearheaded and financed by independent marketers.

BP did not respond to phone calls. Informally, many in the oil business told me that what BP and others are doing is simply wrong.

[Marika]

US Sugar has this on their web site:

Today, U.S. Sugar Corporation is one of the country's largest privately held agricultural firms. The Company farms nearly 200,000 acres of the most productive farmland in the United States. Its mills at Clewiston and Bryant can process nearly 45,000 tons of sugarcane per day, producing over 700,000 tons of sugar per year. In addition to sugar and citrus, the Company also owns a short-line railroad – the South Central Florida Express.

As stewards of this land, U.S. Sugar has pioneered and encouraged the implementation of special land and water management systems, called Best Management Practices, which help the environment while increasing crop production. For years, the research department has been geared toward integrated pest management as an alternative to pesticides, and intensive soil testing to control the application of fertilizers. We are proud partners in ongoing Everglades restoration efforts.

At U.S. Sugar, the traditional farming values are successfully combined with modern technology so that the result is farming that is compatible with the environment and with the economic realities of the next century.

*********************************************************************

Extracted from article

Even as the governor has announced the district's planned acquisition of the assets of U.S. Sugar, we remain proud of our farming history in South Florida," U.S. Sugar said in a news release. "The majority of our stockholders have held this investment for many decades, and many of our employees' families have worked on our farms and in our sugar factories for generations."

The company said the deal will enable it to fulfill its long-term existing business obligations (this is more than a land sale)

**************************************************************

Yes environmental groups were behind this.

Buker said the company was keenly aware of the struggles four Florida governors made to balance agriculture and Everglades restoration.

"The results of these struggles have been a series of partial fixes, sometimes effective, but invariably expensive. But this governor [Crist] had the vision to look more deeply into the problem and to see a more fundamental, systemic solution," he said.

U.S. Sugar, a 1,700-employee, privately held company, says it produces 10 percent of the nation's sugar.

The $8 billion comprehensive plan, approved in 2000, provides a framework and guide to restore, protect and preserve the water resources in central and southern Florida, including the Everglades. The goal of the plan is to capture fresh water that now flows unused to the ocean and the gulf, and redirect it to areas that need it most.

Environmental groups said the land deal was historic and would result in great progress for restoring clean, natural water levels to the Everglades, which should have a positive impact on wildlife, water supplies and wildfires.

*****************************************************

This is inconsistent with the statement on US Sugar's site that they were CAREFUL with run off, pesticides, etc and that they were dedicated to the environment

Environmentalists have expressed concern that fertilizer runoff from sugar cane fields also affect water quality. Government support for the sugar industry is also controversial because detractors say it results in consumers paying higher prices.

Heck, Government is dropping the ball on OIL DRILLING right now causing high prices because of environmental pressure

Environmentalists might have a hand in it but I think big oil might want to just control the ethanol industry as much as they control the oil industry.

[BodybyFisher]

So are you saying that this LAND/BUSINESS GRAB was to STOP oil companies from stepping in here to make sugar based ethanol?

[Marika]

So are you saying that this LAND/BUSINESS GRAB was to STOP oil companies from stepping in here to make sugar based ethanol?

No, it's used to tighten control over the making of ethanol by limiting who makes it. Same situation exists for not building more oil and gasoline refineries, it's not an environmental issue, it's an issue of limiting the number of refineries to INCREASE control over who does the refining and how much refining is done.

Corrected limit to Increase in last sentence. Thanks Mike.

[BodybyFisher]

Don't you mean, its an issue of limiting the number of refineries to INCREASE control over who does the refining and how much refining is done?

Well regardless "THEY" are doing a good job of LIMITING the number of refineries. If they would just let the MARKET do its job and NOT try to control the market, supply and demand would establish an equilibrium.

[Marika]

Don't you mean, its an issue of limiting the number of refineries to INCREASE control over who does the refining and how much refining is done?

Well regardless "THEY" are doing a good job of LIMITING the number of refineries. If they would just let the MARKET do its job and NOT try to control the market, supply and demand would establish an equilibrium.

Well, it's the oil companies doing the limiting but they do have a very good group of complainers that are unwittingly helping them achieve their goal of market control, the silly environmentalists.

[BodybyFisher]

Don't you mean, its an issue of limiting the number of refineries to INCREASE control over who does the refining and how much refining is done?

Well regardless "THEY" are doing a good job of LIMITING the number of refineries. If they would just let the MARKET do its job and NOT try to control the market, supply and demand would establish an equilibrium.

Well, it's the oil companies doing the limiting but they do have a very good group of complainers that are unwittingly helping them achieve their goal of market control, the silly environmentalists.

What support do you have that details that oil companies are limiting the number of refineries?, or not building them. It is my impression that environmentalists have put so many restrictions on building and expanding refineries that its not cost effective. I think I can find support for that.

[BodybyFisher]

Sugar cane is harvested by U.S. Sugar employees at Clewiston near Lake Okeechobee in 2005. (Sun-Sentinel/ U.S. Sugar, file / March 29, 2005)

Gov. Charlie Crist on Tuesday is expected to announce a blockbuster land deal that could be a boon for Everglades restoration and the end of a sugar cane giant.

U.S. Sugar Corp. has agreed to sell the state all of its about 185,000 acres in the Everglades Agricultural Area for $1.7 billion, according to two sources close to the deal. The land could be used as part of the multi-billion-dollar effort to construct pollution-filtering treatment marshes and reservoirs to restore flows of water to the Everglades.

Crist's office and U.S. Sugar declined comment on Monday.

The governor is scheduled to give a "major Everglades announcement" in western Palm Beach County Tuesday morning.

The land deal revives a push by environmentalists to turn sugar cane fields into a "flow way" that could carry water from Lake Okeechobee to the Everglades, a move U.S. Sugar had long opposed and state water management officials called unfeasible.

"This is a major part of what was once the River of Grass," said John Marshall, president of the environmental advocacy group Arthur R. Marshall Foundation. "It is such a turnaround that everybody is just amazed."

Two sources close to the negotiations confirmed that U.S. Sugar plans to go out of business, phasing out over 5 years.

On Tuesday, Crist and Sugar execs will announce a $1.7 billion deal for the state to purchase the corporation's assets - including the sugar mill, rock mining operation, railroad and about 185,000 acres of land.

"In 5 years, they'll run out the business," said one source, adding it will probably be the most significant step in helping to restore the natural flow to the Everglades. "It will allow for a free flow-way from Lake Okeechobee into the Everglades."

Talks began about 7 months ago, after the state Department of Environmental Protection started cracking down on back pumping being done by the sugar giant. One source said it was Crist who suggested the idea of selling out.

"The company approached the state and asked for the best way to handle the situation. The governor ultimately said, 'Why not get out of the business?'"

[Marika]

Governor Crist is a republican by the way. Since you dislike environmentalists so much, I would suggest you take a trip to India or China where they don't have any environmentalists and enjoy their filthy water and air. I understand your desire to let the market forces work but if you do that, you end up with water and air like what they have in India and China. Is that what you want?

Also, environmentalists don't put restrictions on anything. Governmental agencies put restrictions into law and companies have to either comply or not comply.

[Marika]

http://www.signonsandiego.com/news/busines...neries-law.html

It's all about the profits

U.S. law to spur new oil refineries a bust so far

By Tom Doggett

REUTERS

10:58 a.m. June 15, 2007

WASHINGTON – A sweeping energy law that took effect almost two years ago to make it easier for oil companies to get permits for building refineries has so far failed to bear fruit despite soaring demand for gasoline.

The law was supposed get the United States its first new refinery built from the ground up since 1976. The timing appears to be good for starting a project, with gasoline supplies tight and pump prices at record highs.

When the Congress wrote the energy law in 2005, oil companies said there were many obstacles they faced to building new refineries, including high costs, difficult environmental regulations and community opposition to the huge structures.

Lawmakers tried to help by including in the final legislation a provision that would allow the Environmental Protection Agency to work with states to have a consolidated permit request for a new refinery, avoiding a lengthy and duplicative review process.

“I've had general discussions with industry leadership about wanting to help in that regard, but at this point in time no one has stepped forward,” said EPA Administrator Stephen Johnson.

“We want to do everything we can to help expedite permitting so we can have more refineries and at the same time making sure that they're meeting the environmental standards,” he said.

The bill also contained tax relief for current refineries, allowing a company to immediately deduct on its tax returns half the cost of expanding an existing facility's production capacity by at least 5 percent.

The legislation also expanded the current tax breaks for small refiners by raising the oil processing capacity of eligible facilities to 75,000 from 50,000 barrels a day.

While there have been refinery expansions every year for more than a decade, the industry has not taken up Congress' offer to build a new refinery, even though the need for more refining capacity is clear.

The United States consumes about 21 million barrels of oil a day, but can only process about 17.5 million of those barrels, requiring imports of gasoline and other petroleum products to meet domestic demand.

The Senate this week rejected putting more relief in a new pending energy bill for oil companies to build refineries, with critics arguing the industry never used the incentives provided by Congress two years ago.

“They already got their streamlined provisions” for permits in the 2005 law, said Sen. Barbara Boxer of California. “They never took advantage of it,” she said during debate this week.

Johnson said EPA's regulations were not burdensome enough to prevent a new refinery and that's not a valid excuse from the industry.

“It doesn't hold water from the standpoint of whether you are a refiner, or whether you are a citizen, or whether you're a part of EPA, no one wants dirty air,” he said.

Guy Caruso, who heads the federal Energy Information Administration, said the incentives in the 2005 law to encourage new refineries never amounted to much anyway.

He said while profits from making gasoline are high at the moment, it is the fear of what may happen in the years ahead that affects refinery construction decisions today.

“These are 20 and 30-year investments,” Caruso said. “The economics have been quite good for the past several years. I guess the real issue is the long-term, whether they can assume they'll have the kind of (profits) that we've seen recently continuing.”

Both the Bush administration and Congress are pushing for more production of ethanol and other alternative fuels over the next decade that would reduce gasoline consumption.

That's causing companies to rethink the need for expanding refineries, much less considering building new ones, according to the industry's main trade group, the National Petrochemical and Refiners Association.

“Look at the conflicting messages we're getting from policy makers,” said NPRA spokesman Bill Holbrook. “You're going to stop and consider what investments you're going to make ... to continue making a product (like gasoline) that some are trying to limit distribution of,” he said.

But the EPA's Johnson said even with more alternative fuels, gasoline demand will increase from today's levels in the United States and other countries like China and India, so there will be a need for more refining capacity.

“The energy needs for the globe are ever increasing,” he said. “We believe there are many tools in the toolbox” to meet that fuel demand.

[Marika]

You see, the government is pushing for alternative fuels but at the same time they are pushing for the oil companies to build more refineries. If I'm the oil company, I don't want to build more refineries if ethanol is going to come along and take some of my profits from me. On the other hand, if I can control the ethanol industry from start to finish I can then build more oil refineries too so I make money on both sides of the table. It's pure capitalism and it will result in even higher prices for oil, gasoline, E10, ethanol and E85 because essentially I'll have a monopoly over the whole energy process. The happy consumer is the one who gets it in the corn hole. I think the oil companies will not be building new refineries or drilling for more oil UNTIL they have all threats to their profits out of the way or under their control. This has really nothing to do with the environment, it's about profits and monopoly.