INHOFE APPLAUDS REFINERY PROVISION IN ENERGY BILL TO SPUR INVESTMENT
WASHINGTON, DC ñ Sen. James Inhofe (R-Okla.), Chairman of the Environment & Public Works Committee, today applauded the inclusion of a key provision in the energy bill he negotiated that will help spur investment in refinery construction and capacity expansion.
ìThis provision is critical to expanding refinery capacity,î Senator Inhofe said. ìWith gas prices what they are today, itís clearly important to American consumers that we offer incentives that will result in reduced costs and increased output to help meet demand. Currently, domestic refiners are operating at near peak capacity. Even if the Nation was able to increase its crude oil stocks, the current lack of sufficient refining capacity would not translate into much of an increase in usable fuel supply.î
Early on in energy bill discussions, Senator Inhofe considered the impact of environmental regulations on both the siting of refineries and the effect more stringent fuel requirements have on gasoline supplies and price. In May 2004, Senator Inhofe chaired a hearing before the Senate Environment & Public Works to review the environmental regulatory framework affecting oil refining and gasoline policy. The hearing found that resources which otherwise would have likely been invested to meet increased U.S. demand were diverted to comply with cleaner fuels regulations.
In an April 2005 letter to Senate Finance Committee Chairman Charles Grassley and Ranking Member Max Baucus, Senator Inhofe addressed the need for provisions that would promote additional capacity at U.S. refineries, including a recommendation that new capacity-expanding refining assets be given similar tax treatment as other manufacturers.
The provision included by the Senate Finance Committee permits a refinery to expense the costs of the infrastructure if it expands by five percent capacity or to expense 100 percent if a new refinery is built. Construction must occur by January 2008 and the facilities must be placed into service before January 2012.
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