Sorry...not that kind of virgin, but Virgin Airlines owner Richard Branson. It's high time new refineries were built in the US, although reading the article it doesn't appear all that likely to occur here. Virgin plans oil refinery From: Reuters By Deepa Babington in New York September 14, 2005 THINK you are upset about high gas prices? Maverick British entrepreneur Richard Branson is so furious he wants to build his own oil refinery. Like the rest of the airline industry, Mr Branson's Virgin Atlantic Airways has been stung by higher jet fuel prices and was forced to raise fuel surcharges for the second time in four months. Hurricane Katrina sent oil prices soaring to $US70 a barrel because it shut several US Gulf Coast refineries, which turn crude oil into products like diesel, gasoline and jet fuel. "If we don't start now to get more refineries built then fuel prices could literally rocket to $US100-$US200 (per barrel of oil) and the world economy would come to a grinding halt," Branson said in an interview on financial news network CNBC overnight. Mr Branson did not say where he wants to put his refinery, but some analysts said he should not look to the US, where no one has built a refinery in 29 years. "My immediate reaction to that is: Not in the US," said Paul Flemming, oil analyst at Energy Security Analysis Inc. "That's definitely more pie in the sky than anything." In the US, getting a permit could involve years of navigating local, state, and federal regulations and protests from environmental and community groups, analysts say.
It would be great if he did invest in a refinery, I would also like to see him invest in alternate fuel as well, with a long term investment frame of mind.
Since this is Branson, I am surprised, shocked actually, that he isn't going into the natural gas business... more profit in natural gas than oil...and more off-shore gas platforms are being installed... the oil business has a lot of upstart speculators while natural gas seems a better bet!
Lets not forget price of oil ($70.00). The actual gasoline, once refined; probably is about ($400.00) per barrel. http://www.eia.doe.gov/pub/oil_gas/petroleum/presentations/2005/jetfuel/jetfuel_files/frame.html from number fifteen might be close! U.S. Crude Oil
A couple of days ago they had the head of Air Canada talking that each $1 increase in oil cost them huge amounts of money. Although I forget the actual number, it was at least $20 Million.
This is the part of the story that makes me queasy. One of the major issues in this country is our desperate need for more refineries, specifically refineries that can handle "sour" crude that is more readily available.
No offense ITN, but Branson knows how to make money. If he's going into a certain area, I'm willing to be he knows he can make a tidy profit.
He can make a greater profit in natural gas today... 39% higher in Chicago for example! http://www.suntimes.com/output/business/cst-fin-gas14.html http://tonto.eia.doe.gov/oog/special/eia1_katrina.html http://www.npr.org/templates/story/story.php?storyId=4834174
I can understand how refineries aren't being built in places like California or New Jersey, but why aren't they being built in Texas or Alabama or Louisiana? Mexico is always an option.
Google Arizona Clean Fuels, there's a car dealer in Phoenix who has been trying for 15 years to get a refinery built in Arizona, using all sorts of different crude/product combinations here's one reason why investors aren't jumping on it, no matter what you do there's the impossible to placate nimbys. The investors must reckon that their $2 billion is better used elsewhere. http://www.refineryreform.org/spotlight_yuma_az.html
Arizona seems an ulikely location to build a refinery. Don't you want to build the refinery as close as possible to where the oil is located?
Last time I looked, in the late 90's, the scheme was to use an empty crude pipeline going from the central valley of California to El Paso. Cheap but dirty crude, low transportation cost, and convert it into gasoline, diesel and jet fuel for the local users. Now it looks like they're proposing some sort of pipeline from Mexico, that seems more expensive and dubious. The fact is that they're competing with refineries that have very low capital charges, they're all paid off and held together with duct tape. The returns from a brand new $2.5 billion clean and spiffy refinery don't get investors very excited.