Arizona Might be Home to First New U.S. Refinery Since 1976

October 6, 2004

A new refinery planned for Arizona took a crucial step toward its final approval in September, when the Arizona Department of Environmental Quality (ADEQ) proposed a draft permit for the facility. Arizona Clean Fuels, LLC proposes to build the facility on a 1,450-acre site located 40 miles east of Yuma. It will produce 85,000 barrels per day of gasoline, 35,000 barrels per day of diesel fuel, and 30,000 barrels per day of jet fuel. If built, it will be the first new petroleum refinery constructed in the United States in nearly 30 years, and the first facility in the West to be built specifically for the production of newer clean fuels. It will also be the only petroleum refinery in Arizona, and the only large refinery between Texas and California. The ADEQ is holding public meetings on the proposed air quality permit in early October. See the ADEQ press releases and other materials related to the project on the ADEQ Web site.

The proposed refinery will produce gasoline with a sulfur content of less than 10 parts per million (ppm)—far less than a proposed national standard of 30 ppm—and will produce diesel fuel with 15 ppm of sulfur, meeting a standard that will take effect in 2006. See the Arizona Clean Fuels Web site and the U.S. Environmental Protection Agency's "Clean Diesel Trucks and Buses Rule."

Although no new refineries have been built in the United States in nearly 30 years, U.S. refiners have managed to increase their production by adding onto existing refineries. According to DOE's Energy Information Administration (EIA), the number of operating U.S. refineries dropped from 195 in 1987 to 146 in 2004, but during that period the U.S. production capacity increased from just under 15 million barrels per day to almost 17 million barrels per day. See the table, "U.S. Refineries and Refining Capacities, 1987-2004," from the EIA report, "U.S. Petroleum Refining and Gasoline Marketing Industry."