"It appears a North Dakota American Indian tribe is a step closer to building a crude oil refinery on tribal land. That’s good news for the people of the Fort Berthold Reservation, but let’s not get seduced by the fiction that an in-state refinery will mean lower gasoline or diesel prices at North Dakota service station pumps, as some refinery promoters have been saying.

First, the proposed refinery will likely have the capacity to refine, at most, 20,000 barrels of crude a day. That’s a drop in the crude oil market bucket.

Second, the prices of refined products like gasoline and diesel (the Fort Berthold plant would produce propane and diesel, with the diesel going into the North Dakota market) are set primarily by national and global commodity markets. It is unlikely the owners and operators of any new refinery would threaten their profitability by discounting their products, especially when they would be buying crude oil at prices set by the market."

Get the Story:
Editorial: Refinery won’t cut fuel prices (The Fargo Forum 10/14)

Related Stories:
North Dakota tribe to move forward with plans for oil refinery (10/11)