Gautam Mukunda wrote: > >> The margin of the refinery drop too low, and >> Capitalists >> won't invest in things that don't have an >> _immediate_ high return. > > You're kidding, right? > By default, yes, but not this time.
> Just to pick an example from > my old industry, a pharmaceutical company will spend > on average ~$800MM to develop a drug, and that > development process (from molecule to market) averages > ~10 years. This is not anyone's definition of an > immediate high return. This is one of those myths > that people want to believe, I think. > Ok, we dissent about the definition of "immediate", that for oil companies is something like 20 years :-) The problem is that refineries had a huge margin before the 1974 oil crisis, and then it dropped to minimum levels. Capitalist Evil Logic dictates that with such low margin it´s not worth building a new refinery. >> But it's not exactly true [*] that no new refinery >> was build, >> because those that exist are upgraded regularly to >> 2x, 4x, etc their initial capacity. > > This is absolutely true, and something I said a few > minutes ago in a talk with my Mom on this same topic. > It is also true, though, that despite these > improvements in capacity, US refining capacity was > running flat-out even before Katrina, and this is not > a good thing and something that really needed to be > alleviated with some new construction. > Yes, but who will invest, given the uncertainties of the oil prices? PDVSA? :-) Alberto Monteiro _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
