Oil prices may remain high as expansion plans scaled back

WASHINGTON (Winston-Salem Journal) - A push from Congress and the White House for huge increases in biofuels, such as ethanol, is prompting the oil industry to scale back its plans for refinery expansions. That could keep gasoline prices high, possibly for years to come.

With President Bush calling for a 20 percent drop in gasoline use and the Senate now debating legislation for huge increases in ethanol production, oil companies see growing uncertainty about future gasoline demand and little need to expand refineries or build new ones.

Oil-industry executives no longer believe that there will be the demand for gasoline over the next 10 years to warrant the billions of dollars in refinery expansions - as much as a 10 percent increase in new refining capacity.