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American Refineries and Light Crude

Although a new refinery has not been constructed in the United States for 30 years, it is important to emphasize that the existing refineries across the country are continually being reworked and upgraded to advance in efficiency. Their capacity to process oil has continued growing to meet the 17.1 million barrels a day mark. Thanks to this, the US refineries are working very well and are bringing the light crude oil to market for less cost benefiting the consumer. However, as our refining capacity is an issue directly associated to technology, it is important for the country to expand the refining capacity by creating a better investment climate and regulatory structure. It must encourage those investments to find and make use of the best technologies.

Some numbers about the expenditures and returns reveal that for the period of the 1980s and 90s, the oil industry received comparatively poor rates of profit on its investments. The refining sector was affected because of some regulations and requirements. Lately, the profit on investments for the marketing and refining sector was of about 6.2 percent. Moreover, it is expected that by 2010 the US refining industry will have invested more than $20 billion to comply with modern clean regulations.

Nevertheless, the new technologies have helped to reduce the impact of historical low rates and are saving billions of dollars for American consumers. As the oil industry operates in a global market full of unforeseen expenses, investors should always be careful in order to make the best economic investments decisions. Remember that the mission of the Government policies should always encourage the market and not the other way around.

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