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House Bill Authored to Attract Refineries

Posted on: Wednesday, 8 March 2006, 06:00 CST

By Jennifer Mock and Adam Wilmoth, The Daily Oklahoman

Mar. 8--Legislation passed out of a House committee Tuesday would make Oklahoma more attractive to oil refineries looking to relocate, the author of the bill says.

House Bill 2810, by Rep. Lee Denney, R-Cushing, would make the permit process easier for prospective oil refineries. Similar legislation also is being considered at the national level.

The bill, which passed the House Energy and Utility Committee on Tuesday, is one of more than 20 bills that are part of the Rural Economic Development Initiative. House Speaker Todd Hiett, R-Kellyville, began the initiative last year as a way to revitalize rural Oklahoma.

Denney said it takes about 10 years for an oil company to obtain all the permits required to build a refinery, and she hopes this legislation would cut that time in half.

After Hurricanes Katrina and Rita in the fall, Denney said many oil companies may be looking to move their refineries more inland, and this legislation would help speed that process.

"Oklahoma has a rich history of oil and gas," Denney said. "That's our heritage, and I think we're very open to all sides of the business coming to Oklahoma. New oil refineries would be very profitable here in Oklahoma, and they would be safer. Even though we do have tornadoes, they are much more hit-and-miss than hurricanes."

Representatives from the state's energy industry praised the progress Tuesday, but some said the bill does not go far enough.

"Anything we can do to promote either the expansion of our existing refineries or the construction of new refineries would be great for Oklahoma," said Bruce Bell, chairman of the Mid-Continent Oil and Gas Association of Oklahoma. "New capacity would be good for the state and for the oil business as a whole because the country now has less refining capacity than we need. With that deficit, we have to import finished products to make up the shortfall."

Bell said the country's refineries produce about 18 million barrels a day of refined product, while American consumers use 20 million to 21 million barrels a day.

"The profit that comes from refining the crude oil and turning it into refined product is going overseas instead of to the Oklahoma economy," Bell said.

While praising the effort to expand refining capacity, however, Bell said HB 2810 does not go far enough. The bill should be expanded to include refinery expansion, as well as for building new ones, he said.

"It is much more cost-effective to expand an existing refinery than to start from scratch and build a new one," Bell said. "Expansion of one or more existing refineries in the state is a much more likely scenario than building of a new one.

"The reality of the situation is we already have good corporate citizens running the five refineries in state. We should equally -- if not even more strongly -- do whatever we can to encourage those existing refineries to expand."

The bill will next be considered by the full House.

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Copyright (c) 2006, The Daily Oklahoman

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Source: The Daily Oklahoman

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