Policy over oil refining facilities?

Question

Are there any policy that require oil companies to improve the amount of oil that is being refined. Lets say they created a facility in the 1950's that hasnt been improved or upgraded since then. Now lets say the number of gas stations since then has tripled increasing the demand while decreasing the supply. Higher demand creates higher costs. If you were one of these companies the last thing you would do is improve facility standards to meet the qouta of demand.

Lets say these facilities were built in close range to neighborehoods in a time that society lacked zoning laws and these same old run down facilities still exhist today in heavily populated neighborhoods.

Obviosly you havent visited Pasedina in Houston a.k.a Stinkadenia my friend.

Answer 1

There is no law that requires companies to produce in the US and passing one would probably be unconstitutional. It is assumed that competitive forces will produce the efficient amount of gas.If one company controls most or all the market, antitrust laws can be used to break up the company into smaller units. You questions about neighborhoods don't really fit reality. Oil refineries produce such noxious odors that no residential neighborhoods are near them, which is why no area wants one near by.

edit: I stand corrected. I have never been to Texas and for all the refineries I have seen my statement was true. Houston is always on the list of cities with low housing prices. Perhaps this is the reason. This is a classic case of externalities , if either the oil company were force to pay the residence for their cost for enduring the oder, or the residence could pay the company to move would be a efficient outcome, and a net welfare gain.

Answer 2

That would sure suck, wouldnt it?