ABC Blames Government Regulations for High Gas Prices

On Tuesday night, ABC's World News Tonight ran a report placing some of the blame for high gas prices on government regulations that make it difficult to build new refineries in a timely manner. Charles Gibson introduced the piece by noting that since 1981, "the number of refineries [in the U.S.] has fallen by more than half."

Betsy Stark did start her piece on an anti-business note, saying that "refiners are a pretty content group right now" who are "making record profits" and are "under growing pressure to spend some of those profits on new refineries," but she later outlined the difficulty of building a new refinery in Arizona: "It's taken five years to get the air quality permits. The site had to be moved from Phoenix to Yuma for environmental reasons. And after a decade of planning, they still haven't broken ground." Stark ended the story by noting that many Americans also oppose building refineries in their neighborhoods, the "not in my backyard" syndrome. A complete transcript of the story follows:

Charles Gibson: "We are going to take 'A Closer Look' tonight at one of the forces pushing gasoline prices to record highs, the lack of oil refineries. In 1981, there were 324 refineries in the U.S., with a capacity to process nearly 19 million barrels of oil a day. Today, because of the boom-or-bust oil economy, the number of refineries has fallen by more than half. And total refinery capacity has declined, as well. So we wanted to know why aren't new refineries being built? And if they were, would it bring down the price of gas? Here's ABC's Betsy Stark."

Betsy Stark: "Well, Charlie, let me tell you that refiners are a pretty content group right now. Many are making record profits on the high prices Americans pay at the pump. But they are under growing pressure to spend some of those profits on new refineries because the ones they have are maxing out. The strain on the nation's 149 refineries is showing. Months of operating at nearly full throttle, of trying to satisfy record demand, has produced a summer of fires, accidents and shutdowns."

Jamal Qureshi, PFC Energy: "Refineries are strained, and they are having more accidents and creating worries about supply shortages that drive up the price."

Stark: "The system is so stretched, 10 percent of the nation's daily diet of gasoline must now be imported."

Glenn McGinnis, Arizona Clean Fuels: "Everybody has come to recognize that, in the last six or eight months, that there is a significant shortage of refining capacity in the country."

Stark: "Oil analysts say more refineries could bring gas prices down, especially if they were able to process what's called heavy crude. Heavy crude is harder and more expensive to refine than light crude, but it's also $14 a barrel cheaper, and there are millions of barrels for sale. The problem is many refiners can't use it."

Qureshi: "If we had more refineries that could process heavy crudes, then the specific worries over gasoline supply would ease, and the price of gasoline would come down."

Stark: "Analysts say building a few big refineries could produce enough gasoline to make a dent in prices, but building even a small refinery in the United States is a monumental task. Just ask Glenn McGinnis."

MgGinnis: "We hope to be operational in early 2010."

Stark: "He's been trying to build the first new refinery in the United States in 30 years on this patch of Arizona desert. It's taken five years to get the air quality permits. The site had to be moved from Phoenix to Yuma for environmental reasons. And after a decade of planning, they still haven't broken ground."

McGinnis: "By the time we're completed, it will have been 15 years since the project really got started until we actually produce a product for Arizona."

Stark: "There's another big obstacle to new refineries -- Americans themselves. As much as they dislike high gas prices, many dislike the idea of a refinery in their neighborhood even more, the 'not in my backyard' syndrome, Charlie."