Op-Ed: We can’t afford to shutter California’s aging oil refineries yet
In oil and gas investing, there are always a few people who are convinced that the sun will eventually set on the world’s refining capacity in this country. I don’t subscribe to that philosophy and have never been swayed by an argument that the price of oil will continue to climb for years to come.
I’m an investor, not a speculator. I invest in a few oil companies, none of which are in the pipeline. I’m not even in the speculative camp, since I don’t trade shares in the companies I invest in, and don’t understand the mechanics of why the price of a barrel of oil moves in one direction or another. I’m also not an expert on the refining business. I have some knowledge of it, but not enough to make an intelligent risk assessment. And I’m not concerned about being wrong. I’m comfortable being wrong. But if I’m wrong, I think I’ll be wrong for a long time.
That’s pretty scary.
I’m also not even convinced that the United States isn’t on the verge of having to shut down its aging refineries. I believe refiners in the US will reach the point where it’s just not feasible anymore.
The country has been burning barrels of oil for years. For years the industry has been producing an ever bigger pile of crude. This is a problem that gets worse over time, not worse than it already is, and there is no magic solution. But the problem is getting worse and worse.
It’s getting harder for refiners to move out the products they’re refining. The cost of shipping the crude from Alberta to refineries in this country is far greater than the cost of shipping it from Nigeria or Venezuela.
I can’t prove it, but I bet you know someone close to one of those refineries that is thinking about having it turned off. Or perhaps you know someone who works in that field and isn’t thinking about it, but is considering