10.17.2012 0

North Dakota to build first U.S. oil refinery in 30 years

Oil Refinery

Photo Credit: azza-bazoo/Flickr

By Rebekah Rast — America hasn’t seen a new oil refinery built in 30 years. That is until this upcoming year, when North Dakota will begin construction on a $400 million refinery.

Nine years ago, North Dakota’s Three Affiliated Tribes asked the Department of Interior to put land in a trust for the building of this refinery, which will be used to produce feed for the tribe’s buffalo herd.

Department of Interior Secretary Ken Salazar announced Oct. 10 that the tribe will have control of the land and may begin constructing the refinery next spring.

Given the timing of this announcement, weeks before the presidential election, it begs the question was this decision politically motivated on the part of Team Obama or just mere coincidence?

Tribal Chairman Tex Hall told the Associated Press that the refinery will process about 20,000 barrels of oil daily into diesel fuel, gasoline, jet fuel, propane and naptha, as reported by Bloomberg Businessweek.

The state of North Dakota is now the nation’s No. 2 oil producer; producing an average of more than 700,000 barrels of oil each day.  Salazar estimates that this new refinery will create 140 new jobs for the state.

While it’s exciting for the state of North Dakota and even the nation to have a brand new oil refinery it seems a bit out of character for this administration to approve of this project.

“This wouldn’t be the first time Obama has taken politically motivated actions,” says Bill Wilson, president of Americans for Limited Government (ALG).  “If history is any judge, it is unlikely that the EPA and other regulators in a second Obama term would ever let this refinery open its doors.”

After all, it seems the desire of many elected legislators, government bureaucrats and radical environmental groups is to rid Americans of their oil-dependent lifestyles.

California illustrates this perfectly.  The state has some of the most stringent fuel regulations in the nation, thanks to its accommodation of radical environmental policies. Due to these regulations, when a couple of its refineries went down due to maintenance and pipeline misfortunes, the price of gasoline hit an all-time high, as no other market could ease the burden.  In fact, The Wall Street Journal reports that “over the last two decades four refineries in the state have shut down rather than invest in expensive upgrades to comply with fuel regulations.”

However, this problem doesn’t just plague the Golden State.  The Environmental Protection Agency (EPA) hasn’t exactly rallied behind the oil industry either.  Restrictions on refinery upgrades and construction, constraints on moving crude oil to East Coast refineries, and other compliance costs all create further strain on refineries. In fact, three East Coast refineries have already closed, costing thousands of jobs and causing the Department of Energy to warn that pump prices are likely to soar even higher in Eastern states.

Meanwhile rather than tackling the high prices of fuel, this current administration busily works on energy alternatives like biofuels and electric vehicles by way of the taxpayer dime.

There is a huge demand for this refinery in the oil-producing state of North Dakota.  And because the refinery is on tribal land, transportation costs of the refined diesel fuel will be lower as the state’s normal 23-cents-a-gallon tax will not apply.

As the Department of Interior seems to be on board with this one refinery, imagine if this same door opened for other companies wanting to build refineries? With more American oil and gas going to market, prices will be lowered across the board and many more American jobs would come available.

Even if politically motivated, allowing this refinery to be built is a step in the right direction.

Rebekah Rast is a contributing editor to Americans for Limited Government (ALG) and NetRightDaily.com.  You can follow her on twitter at @RebekahRast.

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