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Houston Chronicle: Bodman calls refinery expansion `good investment’ for U.S.

Dec. 10, 2007, 3:29PM
Copyright 2007 Houston Chronicle

U.S. Energy Secretary Samuel Bodman today said a $7 billion expansion of a Motiva oil refinery in Port Arthur is a “good investment” despite efforts by President Bush and Congress to curb gasoline usage in coming years.

“It’s clear we’re going to use a lot of oil and gas in this country over the next several decades. That’s why this investment makes sense,” Bodman told reporters after a groundbreaking ceremony for the Motiva project.

“But in addition to that we need to do everything we can do to develop alternatives to oil and gas,” he said.

Motiva, a joint venture between Royal Dutch Shell and Saudi Aramco, is doubling the size of its Port Arthur refinery to 600,000 barrels per day of capacity. The project, expected to be completed by 2010, will make the facility the largest oil refinery in the U.S.

In recent years, oil companies have poured money into expanding U.S. refineries to capitalize on a period of higher refiner profits that followed many lean years in the business.

But recently, some expansion projects have been put on hold amid an uncertain outlook for the refining business. Congress is weighing higher fuel economy rules for automakers and a proposal to expand production of biofuels like ethanol, both of which could reduce U.S. gasoline consumption in the years ahead.

Bodman, however, said federal efforts to curb gasoline consumption should not be seen as a signal that oil refining will be less important.

” If there’s anything I’ve learning in three years on the job as your energy secretary, it is that we need a diversity of types of fuel and that within each type we need a diversity of suppliers,” he said.

“We need more oil and gas. We need more biofuels. We need more solar energy. We need more wind energy. We need more coal and we need more nuclear power. We are working hard on all of those,” he said.

Separately, Bodman said he was disappointed last week by the Organization of the Petroleum Exporting Countries’ decision not to increase crude production in response to soaring oil prices.

“I had hoped they would increase the quantity of exports that are coming from OPEC,” he said.

While there are likely to be increases from Angola and Iraq this year, Bodman said he is still “hopeful” OPEC nations will boost output.

“I hope there would also be a recognition of the fact that we’re a little short of where we should be when you look at inventory figures,” he said.

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