For this post, Dr. Blanchard will likely accuse me of opposing energy. I plead economics.
Regular readers of the Madville Times know that the proposed Hyperion oil refinery in Union County is unlikely to materialize for lack of business case. Now a real economic analyst backs me up and says Hyperion may not be viable:
In Hart Energy's opinion, the Hyperion refinery project may not represent a viable refinery expansion project based on projected market economics and supply/demand requirements. The U.S. refining industry cannot support the additional capacity and is not likely to provide the required return for the investment. The incremental product supplied by the Hyperion refinery is not required to meet demands of the U.S. or of the Midcontinent markets. Some rationalization of smaller U.S. refinery capacity is anticipated, but surplus U.S. Gulf refineries will retain a strong competitive position in local markets and incrementally in the Midcontinent market [Terry Higgins, Hart Energy Consulting memo, 2011.04.26].
Cody Winchester does us the favor of getting Hyperion's wishful response. The Houston oil dreamers' first response is to shout "Greenpeace!"... as in Kenny Bruno, former Greenpeace activist and current campaign coordinator for Corporate Ethics International, which commissioned the Higgins memo. Current oil industry mouthpiece Eric Williams argues that Hyperion could produce cheaper oil for the Midwest than we get from shipping the oil to the Gulf for refining, then shipping it back to our local Cenex for our pick-up trucks.
Williams fails to mention that oil producers have little interest in keeping that oil here in the Midwest, where we already have a supply glut that depresses prices for North American oil. Oil producers want to send all that oil to the Gulf so they can clear the Midwestern glut and make big money with their oil on the international export market. It's not Greenpeace blocking Hyperion; it's greenbacks.