In the last few decades — indeed, in just the last few years — a combination of demand and technology has greatly expanded the amount of oil and gas reserves that can be economically extracted. Unfortunately, cars and industry can’t run off crude oil anymore than freshly-fracked methane, so those raw hydrocarbons are essentially useless until they’ve undergone a myriad of available processes to refine them into useable fuels. The whole reason for the Keystone XL pipeline, after all, is to bring heavy Canadian crude down to the Gulf Coast for refining.

A little over a year ago, The Wall Street Journal reported that American refineries — already the largest in the world — were pushing to increase their capacity at their existing plants, while others energy firms were trying to get into the business, often at a small scale. The results sounded impressive:

American refiners are set to add at least 400,000 barrels of oil-refining capacity a day [current world-wide refining capacity is about 17 million barrel per day] to existing plants between now and 2018, according to information compiled by The Wall Street Journal and the consulting firm IHS. That is the fuel-making equivalent of constructing a new, large-scale refinery.

[…]

Eighteen projects scattered across the U.S. Gulf Coast, the Midwest and the Rocky Mountain region will help increase refining capacity by as much as 600,000 barrels a day, according to Aaron Brady, senior director of IHS in Cambridge, Mass.

Unfortunately, it seems those efforts have reached — if not their limit — then a major bottleneck. As The Wall Street Journal reported on Sunday, a number of refineries around the country suffered exactly the sorts of problems you’d expect from trying to run retrofitted-but-aging plants at increased capacity: leaks, small-scale fires, and maintenance shutdowns. As a result, it seems, more and more unrefined oil is sitting around, unused.

Much of this is probably inevitable in a market as subject to booms-and-busts as energy; no one wants to invest in a massively expensive new plant only to find out that it can’t be run profitably. Markets are more efficient than the alternatives, but even they’re imperfect. Still, it seems strange that America’s refining capacity — again, the largest in the world — has remained essentially flat over the last 30 years, given the growth in demand for energy worldwide.

It should come as no surprise, however, to find the iron-gauntleted finger of the state tipping the scales and pointing accusingly. For starters:

The [Obama Administration’s] methane proposal has also drawn criticism from environmental groups, who offered only tepid praise for the plan when the EPA first announced it earlier this year. The proposal will initially target only new and modified oil and gas facilities, while existing facilities — which account for 90 percent of the industry’s methane emissions — will remain virtually off the hook from federal regulations. Experts have said it will be extremely difficult to reach the EPA’s 45 percent emissions reduction target without requiring cuts from existing facilities.

More on the same matter:

President Barack Obama’s administration is pursuing a broad regulatory effort to curb greenhouse-gas emissions from sources including power plants, refineries and automobiles. The agency announced in January that it would propose rules to cut emissions of methane, the primary component of natural gas, by as much as 45 percent by 2025.
Methane accounted for about 9 percent of U.S. greenhouse-gas emissions in 2012, according to the EPA. Environmental groups have called for federal action to reduce methane seepage from oil and gas pipes, pumps and storage tanks. The industry has sought voluntary measures, saying methane emissions are already in decline.

Then consider:

Independent oil refiners and a former White House official have urged U.S. regulators to tweak the U.S. biofuels program to shift responsibility for complying from refiners to fuel blenders, according to public comments on a government proposal for renewable fuel use.

And it’s not just the Feds, either:

But California gasoline prices have remained stubbornly high because of strict pollution controls aimed at reducing smog. It is difficult to find any refinery in the U.S.—or the rest of the world—that can make gasoline clean enough to burn there. The few that do, located in Asia or Europe, are a 20-day ocean journey away, making fuel imports expensive.

With a bit of luck and a lot of hard work, we may again have a government disposed to look at energy as a resource to be developed and improved, rather than as a vice to be managed. But until then, let’s hope the refineries keep things moving as best they can.