Since Marathon Oil Co. built the nation's last oil refinery a quarter of a century ago, the number of U.S. refineries has shrunk by nearly half, as razor-thin profit margins and growing environmental regulations have forced more than 70 smaller refiners out of business. Big oil companies have filled the gap by spending billions of dollars to upgrade existing refineries, adding millions of barrels a day of capacity. The expansion has been especially noticeable over the past five years. If they hadn't been able to do that, if they had kept capacity constant, hadn't really tweaked the refineries, we'd have imported a heck of a lot more products. To be sure, refiners continue to upgrade and add fresh capacity to existing plants.
Upgrades are in the works across the industry.
There is a still a bit of time before ground is broken and units are upgraded. Now, it has become more cumbersome and expensive. There is not much room left. Industry groups and the EIA don't make projections about the rate of growth in U.S. refining capacity. The cutbacks come as the cost of complying with new environmental regulations is on the rise.