Refinery Study
In April 2007, the Delta Regional Authority released a detailed study that identifies sites in the region where oil refining facilities can be placed. Such a facility has not been built in the United States since 1976.
"When Hurricane Katrina and Hurricane Rita struck the Gulf Coast in 2005 within weeks of each other, we learned just how vulnerable our nation's oil refining capacity is," says Pete Johnson, the DRA's federal co-chairman. "According to the American Petroleum Institute, 32 refineries along with more than 4,000 oil platforms and related facilities in the region were damaged or destroyed by those two hurricanes. More than 20 percent of the nation's oil refining capabilities were shut down, and gasoline prices rose. Those of us at the Delta Regional Authority understood immediately that a significant planning process was needed. We contracted with the nationally known firm Wilbur Smith Associates to prepare this study. Developing the site-selection criteria for a new refinery was a challenge since a major refinery hasn't been built in more than three decades."
The DRA refinery study determined that a new refinery should be outside of the New Madrid seismic structural damage zones, outside of environmentally sensitive areas and outside of peak wind band areas. The authority looked for sites with diversified river port facilities, a proximity to crude oil pipelines, strong electrical power generation capacities and the availability of land tracts ready for development. As a result of this stringent evaluation process, seven counties and parishes in three states are identified in the study as possible sites for a modern oil refining facility.
The two most favorable sites are East Carroll Parish in Louisiana and Washington County in Mississippi. The remaining five sites in order of priority are Bolivar County in Mississippi, Leflore County in Mississippi, Richland Parish in Louisiana, Chicot County in Arkansas and Panola County in Mississippi.
"The region covered by the DRA already is home to a large percentage of the nation's oil reserves and refining facilities," Johnson says. "Our region will continue to play a crucial role when it comes to supplying the energy America needs. Construction of additional refineries in this region could help meet the country's demands and create economic opportunities for those who call the Delta home."
The DRA study found that:
- 23.4 percent of the nation's refining capacity was shut down after Hurricane Katrina and Hurricane Rita.
- 55 percent of the nation's crude oil production is supplied by the Petroleum Administration for Defense District that includes Alabama, Mississippi, Louisiana, Arkansas, Texas and New Mexico.
- 86 percent of the country's energy supply is projected to be generated from oil, coal and natural gas by 2030.
- 68 percent of all domestic petroleum shipments are by water carriers within the continental United States.
- 3 percent of the domestic oil shipments are hauled by trucks.
- 2 percent of the domestic oil shipments are carried by rail.
- 20.6 million barrels of petroleum products were consumed each day in the United States last year.
According to the U.S. Department of Energy: "Despite the rapid growth projected for biofuels and other non-hydroelectric renewable energy sources, and the expectation that orders will be placed for new nuclear power plants for the first time in more than 25 years, oil, coal and natural gas still are projected to provide roughly the same 86 percent share of the total U.S. primary energy supply in 2030 as they did in 2005."
In a 2005 update to Congress, the American Petroleum Institute reiterated concerns about the vulnerability of refining capabilities due to storms and the growing demand for energy that will continue to impact a tight supply-demand balance for American consumers. According to the National Petroleum Council, the number of domestic refineries has decreased steadily since World War II. Increasing domestic oil demand has led to ever-expanding imports.
"There will be a huge demand for new refineries to meet future global requirements for petroleum products," Johnson says. "Many recent events have focused attention on the role oil plays in our national security, economic vitality and ability to maintain the quality of life we've come to enjoy. As a regional advocate, planner and coordinator, the DRA was in a perfect position to evaluate the opportunities for locating a refinery in our region. The first step was to identify the sites within the region than can support such an operation."
The last major U.S. refinery to be completed was Marathon's Garyville, La., facility in 1976.
"Because there have been no refining facilities constructed in so many years, there are no clear site-selection criteria from which to create a selection plan," Johnson says. "We evaluated a number of research studies about refining operations, reviewed a range of federal regulations relating to those kinds of facilities and assessed numerous data sources to develop criteria for site selection. This is similar in some respects to the site-evaluation models other industries develop when they begin the process of locating an industrial plant. The DRA region must help ensure our country has enough energy to meet its needs. The construction of a modern refining facility will help meet the nation's energy needs while creating quality jobs, attracting additional investments and broadening the tax base."
Site Selection and Identification Factors for an Oil Refinery Facility
- List of Figures, Abbreviations, Definitions, & Executive Summary (508 Kb)
- The Challenge, The Approach and Methodology, & Evaluation Process (1,317 Kb)
- Environmentally Sensitive Areas, Infrastructure Factors, Community Factors (2,636 Kb)
- Community Factors Continued (2,337 Kb)
- Conclusions & Appendices (5645 Kb)