GARYVILLE, La. (AP) — Marathon Oil Corp. said Thursday it has
brought its vastly expanded Louisiana refinery up to full
production, turning out nearly 20 million gallons of gasoline and
other fuels a day despite the industry chill from possible carbon
legislation coming from Congress and growing competition
overseas.

Following a $3.9 billion expansion, Houston-based Marathon is
now processing about 436,000 barrels of oil per day at its New
Orleans-area refinery and producing 19.5 million gallons of
gasoline and other fuels daily. Previously, the refinery could
handle 256,000 barrels of oil and turn out 12 million gallons of
fuels daily.

There hasn’t been a refinery built from the ground up in the
United States in 33 years — and that was the original Garyville
plant. The new units went into service in late 2009 and the
retooled older portion returned to production late last month,
making the refinery the fourth largest in the country, Marathon
officials said.

Following a media tour, several top Marathon officials warned
that carbon legislation — either a carbon tax or a cap-and-trade
system under which factories and power stations can make money by
selling unused quotas of how much greenhouse gas they can release —
could stop refinery expansions such as the one at Garyville.

“What we don’t like is uncertainty when you’re making these huge
investment decisions,” said Rich Bedell, Marathon’s refining
division manager. “It was another world when we decided on this
project” in 2004.

A cap-and-trade bill passed the House last year in a close vote,
but its Senate passage is widely viewed as unlikely. A Senate bill
aiming to cut emissions of greenhouse gases by 17 percent by 2020
would abandon the cap-and-trade approach, instead applying
different carbon controls to different sectors of the economy.
Motor fuel could be subject to a carbon tax.

Although Marathon believes the Garyville refinery will be
competitive if carbon legislation is passed, less efficient
refineries would be put at risk, said Angelia Graves, the company’s
public and state government affairs manager.

Several refineries have been shuttered recently in the United
States, the largest being Valero Energy Corp.’s closure of its
Delaware City, Del. plant. Part of the problem, especially in the
Northeast where refineries are less efficient and labor costs are
high, stems from imported gasoline from new and expanded refineries
in China, India and the Middle East.

During the week ending March 19, the United States imported
623,000 barrels of gasoline daily, according to the U.S. Energy
Information Administration.

The Marathon expansion, one of the largest private investor
projects in Louisiana history, expanded the company’s Garyville
payroll from 570 to 770 and the number of contract employees from
350 to 430.