Expansion of existing refineries is less expensive, since in most 

 cases a significant portion of the infrastructure at an existing refinery 

 can be utilized and land will already be owned. 



The infrastructure-- the crude end product pipelines, tanker and 

 barge terminals, storage tanks, and even technical know how--are extremely 

 important in favoring construction in refining regions. If a refinery 

 is to be constructed in an area without refineries, the refinery and the 

 required infrastructure would have to be built, thus pushing costs 

 higher. 



New refineries will probably not be built in response to OCS finds 

 because (1) offshore production rates will more than likely not sustain 

 a refinery; (2) refineries are usually built in market locations and 

 depend on demand growth there; and (3) any OCS production can simply 

 displace foreign oil which is presently being refined in coastal regions. 



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