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WASHINGTON, D.C. - Congressman Nathan Deal (R) from
Gainesville Georgia today joined the majority of his colleagues in
supporting the Refinery Permit Process Schedule Act. However, the
legislation did not receive the two-thirds necessary in order to be
passed out of the House. Gasoline prices are reaching near-record
levels, due to pressures exerted by supply, demand and geopolitics.
Meanwhile, no new refinery has been built in the United States in 30
years. During that time, demand has increased, resulting in our
importing about 12 percent of our gasoline needs. We need to
increase our domestic ability to refine crude oil.
Oil companies cite regulatory uncertainty as one of the reasons they
forgo adding refining capacity in the United States. The Refinery
Permit Process Schedule Act establishes regulatory certainty for
companies as they make long-term decisions to expand refining
capacity, removing one key stumbling block to expansion.
The bill would help reduce dependence on imports because it takes
the following actions:
- Establishes a federal coordinator who will convene all the
players in all U.S. government agencies responsible for issuing
permits to develop a facility and help them coordinate and expedite
their schedules so that decisions on permits can move efficiently.
- Brings all federal and state agencies together in a coordinated
capacity to make it easier to add fuel refining capacity.
- Eliminates needless bureaucratic delay in the permitting process
for new or expanded gasoline, biofuel or distillate-processing
facilities.
- Gives local federal courts ability to direct new schedule and
enforce it should an agency fail to meet its commitment set by the
federal coordinator.
- Gives EPA priority in the scheduling coordination, preserving
the strict environmental standards that must be met for these
facilities to be developed.
- Maximum deference is given to Clean Air Act, Clean Water Act and
Resource Conservation Recovery Act and others, acknowledging that
environmental permitting can be the most complex.
- Directs the president to identify at least three closed military
bases as suitable sites for new refineries, one of which must be
designated for biofuel refining.
The bill:
- Does not prevent private citizens from availing themselves
of any and all legal options to appeal the permitting process.
- Does not allow any agency or facility developer to
short-circuit environmental compliance.
“The action today by the U.S. House of Representatives was to
have been a crucial step towards moving our nation's refineries into
the 21st century. I am not aware of any other industry that has not
been able to expand in over 30 years and still remain competitive.
The passage of this legislation would have been another step forward
in assisting the American people with the high cost of fuel. I am
disappointed that a majority of the Democrats in the House voted
against this bill, thereby preventing it from being sent over to the
Senate. While it is not the final solution, it would have been a
critical step toward reducing the soaring cost of gasoline.” Deal
added
Why America Needs New Refining Capacity
Lack of U.S. refineries drives up costs at the pump.
While some refineries have expanded, no new refinery has been
constructed in the United States since 1976. There are 148 operating
refineries in the United States, down from 324 in 1981. Total
capacity at operating refineries is roughly 17 million barrels per
day, while total United States demand averages nearly 21 million
barrels per day. This growing gap is met by an increasing amount of
imports of refined products from foreign sources.
U.S. refineries are too concentrated in Gulf States vulnerable to
natural disasters.
About 47 percent of our refining capacity is in the Gulf States and
28 percent of our oil production is concentrated offshore in the
Gulf of Mexico. Any change can cause supply constraints and price
spikes. Streamlining the permitting process will ease refinery
siting in areas away from the Gulf States.
Hurricanes Katrina and Rita brought oil production and refining in
the Gulf to a stand still, driving up prices.
- Within a week of Hurricane Katrina's landfall, the national
average retail price for motor vehicle gasoline rose by 46 cents
to $3.069 per gallon. Prices of other refined fuels also rose
quickly in response to the hurricane.
- In the immediate aftermath of Katrina alone, U.S. refining
capacity was reduced by more than 2 million barrels per day.
- According to economic analysis, households are
conservatively estimated to spend around $1,900 this year on
gasoline, up 45 percent from three years ago and households with
incomes under $15,000 (20 percent of all households) this year
will spend, on average, more than 10 percent of their income
just on gasoline.
- Supply constraints have an even bigger impact on rural
Americans. It is estimated that rural Americans will spend more
than $2,000 on gasoline. Rural Americans are paying an around 22
percent more for gasoline than their urban counterparts because
they must drive longer distances.
Refineries aren't being built due, in part, to a permitting
process that is overly cumbersome and capital intensive.
- Refiners are subject to significant environmental and other
regulations and face several new Clean Air Act requirements over
the next decade. New Clean Air Act requirements will benefit the
environment but will also require substantial capital investment
and additional government permits.
- There is currently a lack of coordination in permitting
requirements and other regulations affecting refineries at
federal, state and local levels. There is no consistent national
permitting program for refineries, compared with the Federal
Energy Regulatory Commission's (FERC) lead agency role over
interstate natural gas pipelines, liquefied natural gas and
hydroelectric power and the Nuclear Regulatory Commission's role
over nuclear plants. More regulatory certainty and coordination
is needed for refinery owners to stimulate investment in
increased refinery capacity.
Our national security is threatened by a growing reliance on
foreign sources of refined petroleum products. It serves the
national interest to increase refinery capacity for gasoline,
heating oil, diesel fuel and jet fuel wherever located within the
United States, to bring more supply to the markets for use by the
American people.
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