In response to the Senate giving their blessing to open up 2000 acres of the Arctic National Wildlife Reserve, Lisa makes a fair but provocative point on CAGW’s Blog (link dead):

Unfortunately the cost of crude is not the reason that the price will continue to skyrocket. It is due to the under capacity of refining in this country. Oil companies continue to allow the old plants to deteriorate to the point where anyone who lives anywhere near one can see the accidents and deaths occurring on a regular basis. No matter how much oil they pump from or more likely into the environment, we will continue to see the price of gasoline increase while the president and his oil friends rake in even greater profits.

My response:

Undercapacity of oil refineries is also affected by federal emissions standards. When a company makes an upgrade to a plant, it no longer can just meet standards that were in place when the plant was built, but it has to meet today’s clean air and clean water standards. The upgrades to meet the new federal regulations are an additional cost to the added cost of increased plant capacity. In some cases the emissions upgrades can make the whole update cost prohibitive. Maybe with new revenues from these higher prices, companies will be able to afford their plant upgrades. The federal clean air standards are high enough that it increases the incentive to maintain dirty and underperforming equipment.