[CPEO-IRF] Refineries

[Lenny Siegel <lsiegel@cpeo.org>]

I tend to doubt that land availability is the major obstacle to refinery 
construction or expansion in the U.S., but my first concern about the 
proposal below is that it could undermine local communities' reuse 
plans. Very few 2005 closures are located on or near deepwater ports, 
which are the best places to build refineries. One of those is the city 
of Concord, California. Concord sought base closure because it had a 
higher and better use of the Naval Weapons Station. Care must be taken 
to ensure that this legislation does not undermine those plans.

Others, the Naval Stations at Pascagoula and Ingleside, are located on 
the hurricane-plagued Gulf Coast. Would it increase U.S. energy security 
to place more fragile refinery eggs in that basket?

Lenny

**


Commentary
Office of Representative Joe Pitts
September 23, 2005

Government Has One Resource That Can Help With Gas Prices: Land

By Congressman Joe Pitts

Our ability to refine oil and supply gas to consumers has not kept pace 
with demand for gasoline.  That is because we have not built a new 
refinery in more than thirty years.

This is a driving factor in the level and volatility of gas prices.  No 
matter how much additional crude oil is made available, we simply do not 
have the capacity to refine it.  But experts say just one new refinery 
would make a significant dent in gas prices here at home.  The opposite 
holds true as well: shutting down a refinery can cause a significant 
increase in price at the pump.

We are seeing that at work right now.  Hurricane Katrina knocked 
refineries offline.  Hurricane Rita is doing the same, resulting in 
higher gas prices.

So why not just build a new refinery?  Volumes of regulations and 
skyrocketing litigation costs prevent the construction of new 
refineries.  Environmental regulations are very important; however, when 
taken to the extreme, they are harmful.  In this case these regulations 
harm the economy and drive up the price of gas.

While the day might come – and I hope this day comes soon – when we find 
a suitable alternative to oil and gas, that day is still a long way off. 
 Until then, we must find an environmentally-responsible way to 
increase refining capacity and lower gas prices for working families.

Ultimately, we need a comprehensive bill to streamline these 
regulations.  In the meantime the federal government can make land 
available that companies can purchase to build new refineries.  I do not 
mean national parks.

We should take a look at a group of former and soon-to-be former 
military bases that have been closed by the Base Realignment and Closure 
(BRAC) Commission.  For years, these bases were links in the chain of 
our national defense.  They supported entire local economies that relied 
on the families and business these bases brought to the area.  Closing 
them has devastated some communities.  While national security decisions 
should not be purely based on economics, we must consider how best to 
use the land leftover from this process.

In some areas, these bases are converted into industrial parks.  Others 
become housing developments.  Some lie unused.  All of them represent an 
asset held by the federal government needed by companies looking to 
build refineries.  If we set aside unused military bases for new 
refinery construction it could eliminate steps in the process and lead 
to several new refineries.

Legislation I have introduced would do just that.  H.R. 3887 directs the 
Administration to identify three military bases slated for closure or 
already closed by the Base Realignment and Closure (BRAC) Commission 
suitable for locating oil refineries.

In compiling this list, the Secretaries must consider a multitude of 
options not the least of which are proximity to the source of oil (oil 
well, port, pipeline, etc) and ability to transport oil to and from the 
site.

Once identified, that land would be set aside for two years, reserved 
exclusively for oil refineries.  After that time, the land may be sold 
or otherwise used as the military sees fit.  I anticipate this 
legislation, along with a number of incentives to encourage this 
construction on BRAC sites, will be folded into a major refinery bill 
that will be introduced soon in House.

H.R. 3887 does not give land away.  It also does not change the 
requirement of companies to meet environmental standards – before or 
after the construction of the refinery.  It simply sets the land aside 
for two years until a company is able to purchase it and build a refinery.

Upon purchase there are number of issues that must be addressed.  My 
legislation does not deal with these after-purchase issues, but I hope 
to advance a number of items that might help speed construction of 
refineries and funnel private sector investment into these sites.

This simple idea – converting closed military bases into oil refineries 
– would bring much-needed relief at the pump to working families and 
restore jobs to communities that need them desperately after the BRAC 
process.

--

The original statement may be found at http://www.house.gov/pitts.


--
Lenny Siegel
Director, Center for Public Environmental Oversight
c/o PSC, 278-A Hope St., Mountain View, CA 94041
Voice: 650/961-8918 or 650/969-1545
Fax: 650/961-8918
http://www.cpeo.org
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