10 July 2000 00:00 [Source: ICB Americas]The National Petrochemical and Refiners Association (NPRA) recently told a House committee that many of the problems US petroleum refiners are facing are caused by "pushing the edge of the envelope on environmental improvements while taking continued energy supplies for granted."
NPRA general counsel Bob Slaughter noted that the refining industry is committed to providing cleaner, more environmentally acceptable products to consumers. But he added that petroleum refiners face a range of problems, including the high cost of crude oil, a new grade of reformulated gasoline, regional supply disruptions, and low inventories of crude and products.
The NPRA official testified before the House Judiciary Committee, which is exploring competition problems in the oil industry and high gasoline prices in the Midwest.
Mr. Slaughter said that over the past 10 years, refiners have invested about $20 billion in environmentally related expenditures, an amount that may exceed the book value of the entire refining industry.
He warned that over the next decade, refiners will face a blizzard of new regulatory requirements. "These environmental initiatives are largely uncoordinated and, if history is any guide, their impact on energy supplies will be ignored or downplayed," he said. "They are also very expensive."
Mr. Slaughter said the Environmental Protection Agency's proposed programs for reducing sulfur levels in gasoline and diesel fuel will cost the refining industry an estimated $18 billion, and the cost of responding to MTBE-related problems will push the combined total above $20 billion.
Mr. Slaughter told the panel that an analysis by the National Petroleum Council--an industry-government advisory body--predicts that supply disruptions will occur more frequently as the industry implements environmentally driven fuel changes.
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