interesting article about legislation currently working its way through congress. it's called, get this, the "gasoline for america's security act of 2005".

here's what i want to know. if they're such big proponents of the free market why don't they let the oil companies decide if its worth their while to build new refineries? hell they're swimming in profits right now if i'm to believe what's being written lately.



amen to that! more info can be found here.

There was an article in last month's Fortune mag that focused on one refining company but said that yes, they're all making a killing right now. It used to be a dog of an industry with thin margins; but now it's insane and these guys are raking it in.

Actually, there's an incentive not to build. The established companies are the ones with the infrastructure to deliver the refined product (meaning ridiculously high entry barriers for new competition), and they earn windfall profits by constricting supply. A glut of refined product hurts their profits.

I'd be very surprised if, when you factor the drop in price due to the increase in supply (this a commodity, remember), a new refinery is a positive NPV project for an oil company.