But Verleger also believes that new EPA requirements imposed on refiners to reduce the amount of sulfur in diesel fuel has had the unintended consequence of causing more refinery outages. Removing the sulfur appears to require running the refining units harder and at higher temperatures and higher pressure, possibly leading to some refining problems.
In its April report, The International Energy Agency wrote, "Anecdotal evidence suggests refinery reliability is deteriorating due to existing sulphur removal requirements, lowering average utilization rates … the need to run these units harder to meet the tighter specifications is leading to a higher incidence of unit failures, posing additional problems for refiners."
Translation: Requirements to reduce sulfur level could be reducing overall refining capacity.
Consumer Groups Weigh In
Groups such as the Consumer Federation of American blame oil company mergers during the past several decades for reducing the number of refiners to the point that a there is now a "domestic oil oligopoly."
The CFA's Mark Cooper argues refiners have underinvested in refining capacity and reduced gasoline inventories to the point that they cannot perform any maintenance without gasoline prices increasing, along with profits.
"If you give them [the refiners] the benefit of doubt, then they have horribly mismanaged this industry. They can't switch from winter to summer fuels without driving up the price a buck and they get away with it," Cooper said. "In a competitive industry they wouldn't get away with it."
Cooper will testify before Congress on May 16, and in his prepared testimony wrote, "The profitability of refining operations in the U.S. has grown far faster than the profitability of their overseas refiners."
"There are no bottlenecks in refineries," said Charles Drevna, executive vice president of the National Petrochemicals Association, the refiners' trade group. "Earlier on this spring, there were more outages than we would normally see, but they are pretty much coming back on line now."
Drevna said delayed maintenance of refineries was an issue currently because refinery workers had shifted from scheduled repairs to service gulf refineries damaged by hurricanes Katrina and Rita. Now, those workers are catching up with delayed maintenance projects.
But even with the planned and unplanned outages, Drevna stressed, "We are doing our utmost best to crank out as much product — gasoline and diesel — as we can. We are continuing to provide that product and the marketplace dictates what has happened at the pump."
He said the industry had been supplying refined product in the face of higher consumer demand.
Finally, as prices for gasoline have risen to record highs, "It makes no sense for refiner not to be running."
Why Not Build a New Refinery?
Financing, permits, environmental concerns and the securing of oil supplies are all substantial hurdles for any company to construct a new refinery.
"Clean" refineries are expensive, and despite recent profits the refinery business has traditionally been low profit margin business. The last refinery was built in 1976 in Garyville, La.
Arizona Clean Fuels hopes to construct a new refinery near Yuma, Ariz., at a cost of $3.5 billion. According to press reports, the company hopes to be up and running in 2011. Nearly two years ago, the company's CEO told ABC News' Betsy Stark he hoped to be up and running in 2010.
But even a new refinery won't solve the current situation.
"We can't build more refineries to get out of this," said Verleger.