Plentiful domestic crude oil brings a refining revival to Kansas and Texas

Mar 6, 2014

A small “teapot” refinery, mothballed for years, has reopened in Nixon, Tex., and the town is coming back to life.
A small “teapot” refinery, mothballed for years, has reopened in Nixon, Tex., and the town is coming back to life.
Credit Michael Stravato / nytimes.com

Small, abandoned refineries dot the High Plains, but the domestic oil boom of domestic light-crude is breathing new life into some of them said a recent article in the New York Times.  

Refiners have been plagued by boom and bust cycles.  Cheap and plentiful domestic oil and natural gas has created a rare golden age.  Major refiners like Tesoro, Valero, HollyFrontier, and Marathon Petroleum are expanding existing refineries in Utah, Texas, Kansas, and Illinois to process the light grade oil coming out of fields like Eagle Ford.  Smaller companies are investing in “teapot” refineries to take advantage of the new market conditions.

“The flash of expansion over the next two years of refining capacity is the biggest that I’ve seen in 30 years,” said Greg A. Haas, director of research at Hart Energy, a research and consulting company.

A major refinery has not been built in the United States in over three decades.  There are a few being built, or planned, in North Dakota, Texas, and Utah.  

The planned refineries, expansions, and new distillation towers represent $5 billion in investments.

The story of how the reopening of a refinery brought new life to a tiny, Texas town, as well as the rest of the article written by Clifford Kraus for the New York Times can be found here