Resurgence in Oil Refineries

Texas, Oklahoma and the Dakotas’ thriving oil industry is prompting companies to both expand existing refineries and to build smaller processing facilities.

According to data compiled by The Wall Street Journal, U.S. refiners are preparing to add at least 400,000 barrels of oil-refining capacity daily at existing plants between 2014 and 2018. The Journal also notes 18 projects scattered across the Gulf Coast, Midwest and Rocky Mountain regions that will help increase refining capacity by as much as 600,000 barrels a day.

Some oil companies are bumping up their refinery capacity by building smaller, inexpensive facilities that are less sophisticated than refineries, but still allow for some oil processing. Even, non-refining parts of the oil sector are getting involved. Pipeline companies are reportedly constructing an oil plant along the Houston Ship Channel that, when completed, will produce around 100,000 barrels of oil daily for export.

U.S. refiners haven’t built a major new fuel-processing plant since 1976, in part because of environmental regulations.

In addition, plans are in the works for several plants capable of processing the ultralight oil extracted from the Eagle Ford shale formation in South Texas. Those facilities, which are relatively inexpensive to build, aren’t technically considered refineries because they can’t handle a complex array of crude types or produce a wide mix of fuels.