Does the U.S. Need More Refineries?

By Tyler Crowe and Aimee Duffy – Mar 14, 2013 at 5:47PM

NYSE: XOM

ExxonMobil

Market Cap

$471B

Today's Change

(-0.05%) -$0.06

Current Price

$118.63

Price as of April 17, 2024, 4:00 p.m. ET

Without a new major facility built since 1977, U.S. refining could be the next bottleneck for American energy. We have seen the lack of pipelines begin to be addressed, but what about the dearth of refineries?

"I'm givin' her all that she's got captain!"

That may be a quote from a Star Trek character, but it also could be used to describe America's refinery business. With almost all Gulf Coast refiners at maximum capacity, some companies like Valero (VLO -1.01%) are looking to ship crude from there to other facilities. Major companies like ExxonMobil (XOM -0.05%) and Phillips 66 (PSX -0.40%) have seen downstream margins expanding. Will they leave that cash in the segment and use it for expansion?

Today, Fool.com contributor Tyler Crowe checks in with the refining business in the U.S. and explains how a lack of investment in the industry could spell trouble down the road.

Fool contributor Aimee Duffy owns shares of HollyFrontier. Fool contributor Tyler Crowe has no position in any stocks mentioned. You can follow them both on Fool.com under the handles TMFAimeeD and TMFDirtyBird.

The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.