Introduction
Oil and natural gas industry analysts and energy economists repeatedly highlight the basic observation that no two oil refineries are the same; stressing that they are unique in essential ways. Upfront, two dimensions to this difference are key. One is variation in size/capacity. Data provided last week regarding the world’s ten largest refineries and the variance within this group, as well as the prevalence of small refineries in the world’s largest oil refining market (United States), illustrate this truth. The second difference is variation in oil refinery capability. As matters stand, variation in capability is considered more significant. Today’s column addresses this. It will be shown that these two variables are central to the