Going Green's No Good for Gas Prices

The analysts said there "is a widespread view among the oil industry leadership that it is foolhardy to add refining capacity in a market where the federal government is actively promoting and subsidizing alternative fuels as a substitute for petroleum products."

That reluctance, they said, is likely to keep gasoline prices high for years.

Cindy Schild, refining manager for API, a trade organization for the oil industry formerly known as the American Petroleum Institute, said there a many reasons contributing to refinery shortages including a lack of skilled labor and increase in construction costs, particularly for steel.

"There are numerous factors companies will keep in mind and consider as they're moving forward and evaluating expansion plans but being able to forecast where they think demand is going to be for petroleum products makes a big difference," she said.

"Right now there are a lot of different proposals circulating on biofuels, or alternative fuels or renewable fuels."

In the end, Schild said, this is a business.

"They are in the business to meet demand and have a reliable supply but they are also in the business to see a profit," she said. "If the demand's not going to be there, it doesn't make sense to have that investment."

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