Murphy exec high on city, mum on plans

The Midwest needs more petroleum refining capacity, a Murphy Oil executive said Friday, but he declined to reveal whether Superior is a prospective site.

“It remains to be seen where it will go,” Murphy Vice President of Manufacturing Ernie Cagle said during his keynote address at the Development Association’s 46th annual meeting.

Murphy Oil recently purchased additional land at its Superior refinery, which employs 150 people. The city has been awash with speculation about new investment, but officials of the Arkansas-based corporation have declined to comment.

A positive development for Superior, however, is the discovery of extensive tar sand reserves in Alberta, Canada. Some petroleum from those fields already is being refined at Murphy’s Superior plant. As the Alberta petroleum moves south, “Obviously, economics will define where it’s sent, where it’s refined,” Cagle said.

Enbridge Energy Co. already is adding pipeline capacity between Alberta and Superior plus a new pipeline between Superior and Chicago to transport the tar sands product, Development Association Executive Director Andy Lisak said in his annual report.

“The expansion will create a significant number of project and permanent jobs in Superior,” he wrote. Last night, Douglas County Board Supervisors approved a land lease with Enbridge as part of that pipeline project.

Although Cagle wouldn’t address expansion rumors, he said the Superior refinery and work force are highly regarded within the company and industry.

Refining just 35,000 barrels of oil per day, Murphy’s Superior plant is small compared with most refineries and with the company’s Mereux, La., facility near New Orleans. That plant, which can refine 125,000 barrels per day, suffered severe flood damage from Hurricane Katrina. Closed since late August, it has received extensive repairs and is scheduled to open later this month.

Cagle said the lack of U.S. refining capacity and growing petroleum demand likely will prevent oil prices from dropping below $40 per barrel. That’s particularly true in the United States, he explained, because it must import 15 million of the 20 million barrels consumed each day.

“Consequently, we’re dependent on OPEC and non-OPEC countries” including Mexico and Venezuela, along with the fluctuating political relationship among supplier countries and the United States, he said.

At the same time, industrial growth in China and India are quickly raising their demand for energy resources.

“We have to realize these countries will compete against the United States for oil and also for jobs, technology” and other goods and services, Cagle said.

The Development Association presented two honors at the meeting. Udeen Trucking Inc. was recognized for its commitment to Douglas County’s growth and development, and Frank Giesen was honored for six years of service to the board, including temporary service during 2001 as executive director.

Tags: murphy, oil, refinery, expansion, pollution, environment, lake, superior