|SRefinery closures have occurred every year
over the past two decades. Since
1988, we have lost over 1.6 million barrels per day of capacity, which is
about 10 percent of today’s capacity. Several
factors are driving this situation:
|–The refineries that have closed are smaller
and have less favorable economics than other refineries in their market
|–Even though refinery utilization has improved
since the 1980’s, refinery margin improvements have been modest.
|–In recent years, some smaller,
less-economic refineries that faced additional investments for environmental
reasons in order to stay in business found closing preferable because
they predicted that they could not stay competitive in the long term.
|SWhile the rate of closures as measured by
average capacity shut down per year has slowed, EIA expects to see closures
continue in the future.