Where Could Virginia Build Another Oil Refinery?

if a new oil refinery is built in Virginia, three potential locations are the old refinery site at Yorktown (1), the planned Craney Island Marine Terminal (2), or the Town of Cape Charles (3)
if a new oil refinery is built in Virginia, three potential locations are the old refinery site at Yorktown (1), the planned Craney Island Marine Terminal (2), or the Town of Cape Charles (3)
Source: ESRI, ArcGIS Online

The last proposal for building a new oil refinery in Virginia centered on Hampton Roads.

In the mid-1970's, the 175,000-250,000 barrel/day Hampton Roads Energy Company Refinery was proposed at Portsmouth, on the west bank of the Elizabeth River where the Virginia International Gateway (VIG) terminal is now located. Opposition to the environmental impacts, especially potential oil spills damaging oyster beds in the Elizabeth, Nansemond, and lower James River and wintering blue crabs in the lower Chesapeake Bay, delayed approval until changing business conditions killed the project.1

When the Corps or Engineers looked at alternatives to the proposed Hampton Roads Energy Company Refinery in the 1970's, it examined 67 sites and determined the best two were Portsmouth, Virginia and Eastport, Maine. Hampton Roads offers easy access for tankers to import crude oil, and for barges to carry refined products to various markets.

One challenge at Portsmouth: a new refinery in the urbanized area would add various "criteria pollutants" regulated by the Clean Air Act, including sulfur and nitrogen oxides - and carbon dioxide, of course. To facilitate construction of the refinery, the Virginia Department of Transportation proposed to revise its asphalt paving process for as far as 140 miles away, to offset hydrocarbon emissions.12

the Virginia International Gateway (VIG) terminal was built on the site of the proposed Hampton Roads Energy Company Refinery, so that location is no longer available
the Virginia International Gateway (VIG) terminal was built on the site of the proposed Hampton Roads Energy Company Refinery, so that location is no longer available
Source: ESRI, ArcGIS Online

The next refinery proposal, if there is one in Virginia, will also concentrate on building in Hampton Roads. Virginia produces only a minimal amount of crude oil in Lee County, not enough to justify the billion-dollar investment in a new refinery there.

Feedstock (crude oil) would have to be imported by tanker from foreign sources, or by pipeline from offshore platforms if oil is discovered under the Outer Continental Shelf. The most cost-effective location for a new refinery in Virginia would be near the tanker dock, or the place where the underwater pipeline from offshore oil wells reaches land.

If hydrocarbons are discovered in economic quantities under the Outer Continental Shelf off the coast of Virginia, the Town of Cape Charles and York County might seek to build refineries. The man-made Craney Island Dredged Material Management Area, with no current structures and a deep shipping channel on the east side, could also be used if the planned Craney Island Marine Terminal for shipping containers is not constructed there.

Expanding existing refineries on the Delaware River could be more competitive than building a new refinery in Virginia to process any oil produced from the Atlantic Coast Outer Continental Shelf. Those facilities are connected by an extensive pipeline network to customers in the New York area and western Pennsylvania/Ohio, and already have air and water quality permits.

When Sunoco planned to close its 330,000 barrel/day refinery in Philadelphia in 2012, the Environmental Protection Agency adjusted its interpretation of the Clean Air Act regulations. That allowed continued operation without forcing the facility to meet the tighter "new source review" standards.3

One possibility is that Virginia does not build a refinery to process crude oil, but instead focuses on new biodiesel refineries or ethanol plants. President George W. Bush visited the Virginia BioDiesel plant in West Point (Virginia) in 2005, and a major ethanol production facility finally opened in Hopewell in 2014.

Craney Island could become both a crude oil storage site (receiving Outer Continental Shelf oil from subsea pipelines and barging it to existing refineries on the Delaware River) and the site of a new ethanol plant/biodiesel refinery in Virginia. Various companies have proposed an ethanol plant/biodiesel refinery south of Jordan Bridge, on the border of Portsmouth and Chesapeake cities, but none have been built.4

oil from the Outer Continental Shelf could be barged to existing refineries on the Delaware River, or a new subsea pipeline could bring that oil to a new Virginia refinery
oil from the Outer Continental Shelf could be barged to existing refineries on the Delaware River, or a new subsea pipeline could bring that oil to a new Virginia refinery
Source: US Fish and Wildlife Service, Wetlands Mapper

References

1. "Oil vs. Oysters – Lessons for Environmental Regulation of Industrial Siting From the Hampton Roads Refinery Controversy," Richard A. Liroff, Boston College Environmental Affairs Law Review, Volume 11 (Issue 4), 1984, pp.710-711, http://lawdigitalcommons.bc.edu/ealr/vol11/iss4/3 (last checked December 25, 2012)
2. "Oil vs. Oysters – Lessons for Environmental Regulation of Industrial Siting From the Hampton Roads Refinery Controversy," pp.737-743
3. "Carlyle Group, Sunoco and politicians’ joint venture to rescue Philadelphia refinery," Washington Post, December 22, 2012, http://www.washingtonpost.com/business/economy/carlyle-group-sunoco-and-politicians-joint-venture-to-rescue-philadelphia-refinery/2012/12/21/b71aa998-4879-11e2-ad54-580638ede391_story.html (last checked December 27, 2012)
4. "Bush Visit Energizes Va. Town," Washington Post, May 17, 2005, http://www.washingtonpost.com/wp-dyn/content/article/2005/05/16/AR2005051601556.html; "Proposed ethanol refinery sparks intercity tension," The Virginian-Pilot, May 24, 2007, http://hamptonroads.com/node/271111; "Osage Bio: A good idea gone bad," Southeast Farm Press, April 10, 2012, http://southeastfarmpress.com/blog/osage-bio-good-idea-gone-bad (last checked December 25, 2012)


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