Petroleum Refining: Economic Performance and Challenges for the Future (CRS Report for Congress)
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| Release Date |
Revised June 3, 2008 |
| Report Number |
RL32248 |
| Report Type |
Report |
| Authors |
Robert L. Pirog, Resources, Science, and Industry Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
The petroleum refining industry provides products that are critical to the functioning of the economy. Virtually all transportation, land, sea, and air, is fueled by products that are refined from crude oil. Industrial, residential, and commercial activities, as well as electricity generation, use petroleum-based products. Along with volatile changes in crude oil prices, the industry has faced evolving health, safety, and environmental requirements which have changed and multiplied product specifications and required capital investment in refineries. Since the late 1990s, the industry has undergone significant structural change which might alter its profitability requirements, its ability to provide stable product volumes to the consuming market, and its ability to adapt to current and future environmental requirements. [â¦] To the extent that continued capacity expansion and technological investments are reduced, or not undertaken, because of low historical rates of return, even though recent returns are higher, U.S. dependence on imported refined products might increase, or product markets could be disrupted by shortages and price spikes. As the 110th Congress considers energy legislation, it is likely to be concerned with domestic energy security and market stability, issues linked to the performance of the petroleum refining industry. Increased imports of refined products, particularly motor gasoline, combined with growing imports of crude oil, could make the United States increasingly vulnerable to shocks originating in the world oil market. Importing motor gasoline into the United States in appropriate volumes may become increasingly difficult because of the unavailability of world supplies consistent with U.S. fuel specification requirements.
