The Cost of Environmentalism and Regulation
Briefing had this blurb today:
WSJ reports on India's northwest coast near Pakistan, Mukesh Ambani, the chairman of India's largest private-sector co, Reliance Industries, is building the world's largest refinery complex. When it's finished, he plans to load 40% of the fuel it turns out onto huge tankers for a 9,000-mile trip to America. The potential for oil refineries abroad that can serve the U.S. is so strong that Chevron (CVX), though based in the car-happy state of California, is investing in Mr. Ambani's project rather than try to build a new refinery at home. While in the past, thinner profit margins required that refineries be close to consumers to save on shipping, today's margins are wide enough that it pays to haul gasoline and other refined products long distances. Locating refineries in a region such as Asia is an easy decision, given its less-onerous construction costs, environmental limits and red tape, plus its own rapidly growing fuel demand. Saudi Arabia's national oil co, Saudi Aramco, currently envisions two giant new 400,000-barrel-a-day refineries. ConocoPhillips (COP) is in talks to build one, and France's Total (TOT) the other. In addition, Saudi Aramco and Exxon Mobil (XOM) are talking about being partners in a refinery expansion and petrochemical complex in China's Fujian province, near Taiwan.Hard to believe that things have gotten so bad in America that it now pays to refine oil in India and then ship it 9,000 miles to the US! I hope the environmentalists and statists are happy with what they have wrought.