The flood of new domestic crude oil production over the past five years has created a series of challenges for an industry that for decades had been cutting back.
U.S. oil production surged to nearly 2.4 billion barrels in 2012, up 30 percent from 1.8 billion barrels in 2008. Last year's production was the highest since 1996.
The new crude has flooded the country's pipeline system and refineries.
In response, crews broke ground this week on the country's first new refinery in 35 years. Another received an air quality permit last year, but construction has not yet started.
Both of the new refineries are set for North Dakota, near the Bakken field that has been the fastest-growing oil field in the world for the past four years.
Both refineries also are relatively small and mostly will make products for the oil patch.
The Dakota Prairie facility is located near the southern edge of the Bakken play and is expected online by the end of 2014. The Trenton Diesel Refinery is planned in northern North Dakota near the Montana state line.
Both plants are expected to be 20,000 barrel-per-day refineries that will focus on producing diesel and kerosene to be used by trucks, pumps and rigs throughout the area.
The Bakken is only one example of unconventional oil resources the industry has unlocked in recent years.
New drilling efforts throughout Oklahoma and Texas — along with new and expanded pipeline capacity from Canada — have created a backlog around Cushing, the storage hub where West Texas Intermediate crude is priced.
Cushing has been home to refineries before, but the last closed decades ago.
In 2006, a development group including the Sac & Fox Nation and SemGroup Inc. announced plans for a $4 billion, 150,000-barrel-per-day refinery near Cushing. The project stalled as refined product demand collapsed during the recession.
The country's economics and the oil industry both have changed since 2006. Oklahoma Energy Secretary Mike Ming said he has heard of no recent discussions about a new refinery in Cushing, but that the site might make sense.
“We would certainly look seriously at a new refinery possibility,” Ming said.
“The new supplies have come on so fast and at such a magnitude that I think it is a discussion worth having. Anytime you can take advantage of pricing or geographies, the consumer can benefit from that.”
But don't expect anything soon.
“Refineries are big capital-investment projects that require long-term commitments and a lot of permitting,” Ming said. “Building a new refinery is a much bigger challenge than upgrading an existing refinery.”