214. REFINERY CAPACITY GREW STEADILY IN 2005

Another common peak oil argument: refining capacity is not increasing because the large producers know that peak oil is imminent, and it does not make sense to expand capacity to refine oil which will not be forthcoming.

This argument breaks down because refining capacity is still increasing. Growth in global refining capacity in 2005 was an extremely healthy 2.8%, as reported by Jim Fraser at the outstanding Energy Blog:

EIA just published its annual World Crude Oil Distillation Capacity tabulation which gives a country by country breakdown of distillation capacity as of January 1, 2006. Distillation capacity jumped up 2.8% in the last year, to 85,127 thousand barrels a day, the highest increase since 1978 and the first time it exceeded 1.0% since 2000. Demand for oil for the first three quarters of 2005 (latest figures available) was up 1.16% over last year, so refinery capacity is up well ahead of demand.

China showed the largest growth, with capacity expanding by about 1.6mbd.

-- by JD