The on again off again expansion of the Marathon Petroleum
refinery is on again as reported in a cover story in the Detroit Free Press. According
to the Free Press article, the expansion of the Marathon refinery in southwest
Detroit is the largest construction project in recent years and will employ
1,300 workers at its peak. This is good news for economically depressed Detroit,
both in terms of new jobs and increased tax revenue.
The Marathon refinery expansion increases the capacity for
production from the current 106,000 barrels per day to 120,000 barrels per day.
This production expansion in Michigan’s only petroleum refinery is especially
beneficial in helping insulate motorists in the state from the inevitable supply
disruptions that result in price spikes at the pump. Geographically, Michigan is
literally at the end of the pipeline for petroleum products coming from the
Gulf of Mexico and other areas. When U.S. refineries switch over to seasonal
fuel blends or are out of operation for maintenance or other reasons, motorists
in the state experience some of the highest gasoline prices in the nation.
Michigan motorists were recently stung with gasoline prices well north of $4
per gallon when the national average remained below the $4 threshold.
The most important long-term benefit from the Marathon
expansion project may well be the ability of updated refinery in Detroit to
produce gasoline from Canadian oil sands. It is strategically important to the
state and the nation’s energy future to utilize the vast oil sands petroleum
reserves from our neighbors to the north. Canadian oil sands are a much more
realistic source of North American energy necessary to reduce oil imports from
the Mideast than are alternative energy sources such as ethanol that still rely
on government subsidies and mandates.
The Marathon Petroleum refinery expansion is good news for
a state that has not had much good news this past decade.
Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.