Despite President Barack Obama’s promise that the U.S. government would not fund coal plants overseas, the U.S. Export-Import Bank authorized a nearly $641 million loan to build an oil refinery in Turkey that will use American-made equipment.
“This important transaction will support the export of cutting-edge American equipment,” Ex-Im Bank Chairman and President Fred P. Hochberg said in a statement. “Moreover, the transaction will help a vital industry in Turkey and support 3,000 U.S. jobs across America. The growth we see in the energy sector around the globe bolsters jobs here at home.”
According to the bank, american-made equipment will be used to build the refinery which will be completed in 2017. The facility will refine crude oil as well as other petrochemicals. However, while the federal government is offering millions for an oil refinery overseas, only one new refinery has been built in the U.S. since 1977.
“This is the exact kind of refinery that we cannot get permitted here in the U.S.,” Daniel Kish, vice president of the Institute for Energy Research, told The Daily Caller News Foundation. “The federal government will support the construction of facilities and infrastructure in other countries that they won’t allow to be built in the U.S.”
In the past three decades, rising government regulations and a growing “not in my backyard’ mentality has made it more economical for refineries to expand capacity at existing facilities rather than build new ones.
“It would take you 12 to 15 years to go through the permitting process,” Charles Drevna, president of the American Fuel & Petrochemical Manufacturers, told TheDCNF. He added that companies could “spend hundreds of millions of dollars with no certainty of the project being approved” making it far easier to just expand existing refineries.
There are 143 oil refineries currently operating in the U.S., according to the Energy Information Administration (EIA). The last one went into operation in 2008 in Douglas, Wyo. Before that, the last refinery with “atmospheric distillation capacity greater than 100,000 barrels per day began operating in 1977 in Garyville, Louisiana,” according to EIA.
In March 2013, construction began on a new refinery in North Dakota, the heart of the U.S. oil boom. It’s scheduled to be completed in the next year or so. It’s a smaller refinery, though, and will be used more for local consumption.
“The EPA doesn’t give any slack to companies here in the United States, but the government will fund oil refineries overseas,” Kish said.
The country’s refining capacity, however, has increased: There have been many refineries that have expanded their capacity over the years.
“What has happened over the years is that refineries have expanded, and so what we’re seeing is that there’s more than an adequate supply for consumers,” Drevna said.
On top of the red tape for U.S. companies trying to build refineries, existing facilities have been put under tremendous strain by the federal Renewable Fuel Standard (RFS), which requires 36 billion gallons of renewable fuels be blended into the fuel supply by 2022.
“That will be more detrimental to the U.S. consumer than funding refineries in Turkey,” Drevna said.
The RFS has attracted the scorn of not only the refining industry, but also environmentalists, anti-hunger groups, the poultry industry, motorist groups and others. More than 144 representatives from a wide range of industries testified in an all-day field hearing held by the Environmental Protection Agency on Thursday regarding the RFS.
“It’s just too bad that the government would do this but not approve the Keystone XL pipeline,” Kish said. “If the president is going to say we’re not going to support coal plants in foreign countries and he can’t even make up his mind on building a pipeline to Canada, how do they justify giving a loan to a refinery that’s going to be throwing up a lot of carbon dioxide in Turkey.”
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