Around this time last year, we saw two Canadian refinery plans pulled. Friday's announcement by BP (NYSE:BP) and Irving Oil takes the number to three.

For NLRC, the decision was a matter of a fuel crisis meeting a credit crisis. Gas prices were going through the roof, but the debt markets were in such disarray that the company couldn't find financing for its Newfoundland and Labrador refinery. In the case of Royal Dutch Shell, which dropped its Sarnia, Ontario, project on the heels of oil's peak at around $147 a barrel, the company cited various inflationary pressures as a reason to pull the plug.

Obviously the world looks quite a bit different today. With economic activity slumping and unemployment pressing steadily higher, there is huge slack in the global economy. This state of affairs has driven down demand for refined products like gasoline and diesel fuel, which in turn has hit the margins of companies such as ConocoPhillips (NYSE:COP) and Valero Energy (NYSE:VLO). You can forget about a near-term recovery, too. The Energy Department doesn't see U.S. oil demand returning to 2007 levels even by 2020.

The response of many downstream operators is to close down uncompetitive plants. Chevron (NYSE:CVX) is looking at shutting in a Hawaii plant, and Shell is reviewing several subpar assets.

You would think all of these closures would give a boost to Holly (NYSE:HOC) and other companies that can afford to keep their refineries up and running -- and that is a quite possible outcome.

The only sticking point is that a concerted effort is under way to ramp up new refining capacity in China, India, and other rising demand centers. Take BP, for example. While dumping the Canadian plan, BP was nearly simultaneously reported to be negotiating refinery deals with Sinopec (NYSE:SNP) in coastal Chinese cities. This news is in addition to the company's talks with PetroChina (NYSE:PTR) regarding a potential refinery in Shanghai.

On balance, I'm pretty uncomfortable with the prospects of North American refiners over the next few years, and I won't be putting my money to work here. If you have a different spin on the situation, share it in the comments section below.

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Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his CAPS profile or follow his articles using Twitter or RSS. The Motley Fool has a disclosure policy.