Petroleum Association foresees 50% decline in European refinery capacity

September 23, 2011

The European Petroleum Industry Association (EUROPIA)  has issued a new report examining Europe’s energy outlook through the year 2050.  Specifically, the report analyses the various impacts of the EU policy of “decarbonization.”   Although EUROPIA projects a steadily decreasing demand for fossil fuels, they fear that regulatory burdens on the refining and petrochemical industries will cause domestic capacity to decline even faster than demand.  Thus, even though over all demand for imported fuels decreases, the cut in capacity could mean an increased reliance on imports of refined products.

The European Energy Review has published an overview of the study here.   EER summarizes the key concern of EUROPIA:

This means that policies that make it harder for the refinery sector to compete internationally and to survive – in other words, that hasten the natural decline of the sector – will have highly adverse consequences. According to Europai, such policies will make Europe more dependent on highly volatile international oil markets. They will harm the existing oil and distribution marketing system, putting at risk the EU internal market for transport fuels. And they will hurt the petrochemical value chain and other directly linked industries, leading to economic damage and job losses.

This, of course, opens a competitive door for the US.  As the vast supplies of unconventional fossil fuels make North America a leading producer of raw carbons, we should build up our refining capacity in order to supply foreign markets with more value added finished products.   Yet another opportunity for economic growth that the Shale Age opens up for policy makers.


One comment

  1. […] position to be – at once – the worlds greatest producer and consumer of fossil fuels – as well as the top and exporter of value-added, finished petroleum based products.   Simply being energy independent would wipe out much of our trade deficit; the exports of fuel […]

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